2011 Ontario Economic Outlook and Fiscal Review

CHAPTER III: Fiscal Outlook

Highlights

  • The Province remains on track to meet its fiscal targets, while making smart investments to encourage economic growth and job creation.
  • 2011–12 deficit outlook— $16.0 billion, $0.3 billion ahead of the 2011 Budget forecast target.
  • The 2011 Budget outlined a plan to hold average annual growth in program expense to 1.4 per cent until the budget is balanced in 2017–18. Given the extended period of modest economic growth expected, the Commission on the Reform of Ontario’s Public Services is expected to recommend that the target for spending growth should be one per cent.
  • The proposed Healthy Homes Renovation Tax Credit would be funded using reductions in other programs.

Section A: Overview

Over the last eight months, the global economy has seen a widespread, downward shift in projections for economic growth. As a result of pressures from outside Ontario, the Province continues to face economic challenges. This means a modest pace of economic growth, which directly impacts how the government will manage fiscal planning. This is particularly relevant when it comes to balancing the implementation of new programs and protecting public services while meeting the targets for eliminating the deficit.

The 2011 Budget outlined a plan to hold average annual growth in program expense to 1.4 per cent until the budget is balanced in 2017–18. Given the extended period of modest economic growth expected, the Commission on the Reform of Ontario’s Public Services is expected to recommend that the target for spending growth should be one per cent. The government will consider this and other advice as it prepares for the 2012 Budget.

Consistent with this, any new spending initiatives will be paid for through offsetting savings from other areas or through the reform of public service delivery. The proposed Healthy Homes Renovation Tax Credit, if passed by the legislature, would help support jobs and economic activity while helping seniors live with independence and dignity in their own home. It also costs taxpayers less for care to be provided at home than in a long-term care facility. This new measure would be funded using reductions in other programs.

Eliminating the deficit by 2017–18 and maintaining balanced budgets beyond that time as demographic trends exert increasing pressure on government programs will require fundamental reform of the delivery of public services. The Commission on the Reform of Ontario’s Public Services will make recommendations for the government’s consideration in time for the 2012 Budget.

The Province remains on track to meet the fiscal targets projected in the 2011 Budget and the First Quarter Ontario Finances. This includes a $16.0 billion deficit in 2011–12 and steadily declining deficits of $15.2 billion in 2012–13 and $13.3 billion in 2013–14.

This chapter outlines Ontario’s fiscal outlook for 2011–12 and the medium-term forecast for 2012–13 and 2013–14.

Chart 1: Ontario's Medium-Term Fiscal Outlook

Section B: 2011–12 Fiscal Performance

The 2011–12 deficit is currently projected to be $16.0 billion, an improvement of $0.3 billion compared with the 2011 Budget and consistent with the outlook presented in the First Quarter Ontario Finances.

The Province’s total revenue for 2011–12 is projected to be $443 million lower than the 2011 Budget forecast. Excluding the impact of the one-time loan repayment from Chrysler Canada Inc. and other first-quarter changes, the revenue forecast is $778 million lower than in the 2011 Budget, mainly reflecting the impact of slower economic growth on Ontario’s revenue.

The 2011 Budget Plan included a $700 million reserve in 2011–12 to protect against the potential impact of events that could deteriorate the Province’s fiscal performance. The reserve for 2011–12 has been reduced by $500 million to counter the impact of slower economic growth on Ontario’s fiscal performance. This amount is less than the $778 million decrease in revenue since the first quarter.

Program expense has been maintained at 2011 Budget levels. Total expense is projected to decrease primarily due to lower interest on debt expense resulting from lower interest rates than projected at the time of the Budget and the lower deficit in 2010–11.

Table 1
2011–12 In-Year Fiscal Performance1
($ Millions)
  Budget Current Change Since
Budget
Plan Outlook
Revenue2 108,717 108,275 (443)
Expense      
Programs 114,043 113,971 (72)
Interest on Debt 10,290 10,097 (193)
Total Expense 124,333 124,068 (264)
Reserve 700 200 (500)
Surplus/(Deficit) (16,316) (15,994) 322
  • 1 Budget plan revenue and expense have been restated from what was shown in the 2011 Budget to reflect a fiscally neutral accounting change. See note at the bottom of Table 11 for more information.
  • 2 Excluding the impact of the one-time loan repayment from Chrysler and other first-quarter changes, total revenue declined by $778 million.
  • Note: Numbers may not add due to rounding.

2011–12 Revenue Changes Since the 2011 Budget

The 2011–12 revenue projection at $108,275 million is $443 million lower than the 2011 Budget outlook as a result of slower economic growth. The revenue decline in 2011–12 is mitigated by the Chrysler loan repayment previously announced in the First Quarter Ontario Finances.

Table 2
Summary of Revenue Changes Since the Budget1
($ Millions)
    2011–12
Taxation    
Personal Income Tax (721)  
Corporations Tax 30  
Ontario Health Premium (129)  
Land Transfer Tax 125  
Other Taxes 59  
Electricity Payments-in-Lieu of Taxes (14)  
Total Taxation   (650)
Government of Canada   (175)
Government Business Enterprises   (39)
Other Non-Tax Revenue    
Chrysler Loan Repayment 468  
Other Non-Tax Revenue (46)  
Total Other Non-Tax Revenue   422
Total Revenue Changes Since the Budget   (443)
  • 1 See note at the bottom of Table 11 for more information regarding the fiscally neutral accounting change.
  • Note: Numbers may not add due to rounding.

Details of 2011–12 In-Year Revenue Changes

Key revenue changes since the 2011 Budget forecast include:

  • Personal Income Tax (PIT) revenue is projected to be $721 million, or 2.8 per cent, lower due to slower 2011 and 2012 economic growth and weaker 2010 results based on tax returns processed since the 2011 Budget. The PIT change also reflects a positive $27 million impact in 2011–12 due to the 2011 federal budget measures as previously announced in the First Quarter Ontario Finances.
  • Corporations Tax (CT) revenue is up $30 million, reflecting the impact of the 2011 federal budget measures as previously announced in the First Quarter Ontario Finances.
  • Ontario Health Premium revenue is projected to be $129 million, or 4.2 per cent, lower due to slower economic growth in 2011 and 2012 and weaker 2010 results based on tax returns processed since the 2011 Budget.
  • Land Transfer Tax revenue is expected to be $125 million, or 10.0 per cent, higher consistent with recent strength in the Ontario housing market.
  • Other Taxes are forecast to be $59 million higher due to stronger 2011 instalment payments and prior-year reassessments of Mining Tax.
  • Electricity Payments-in-Lieu of Taxes are $14 million lower due to the Ontario Energy Board’s March 10, 2011 decision with respect to Ontario Power Generation Inc.’s rate application for 2011 and 2012, previously reported in the First Quarter Ontario Finances.
  • Government of Canada transfers are projected to decrease by $175 million, or 0.8 per cent, largely due to a $150 million downward revision to Ontario’s Equalization entitlement for 2011–12. This is a result of the federal government calculation error as previously reported in the First Quarter Ontario Finances. In addition, there is a $36 million reduction in infrastructure revenue related to the federal Residential Rehabilitation Assistance Program funding that will now flow directly from the federal government to municipalities rather than through the Province. These decreases are partially offset by an $11 million increase for approved projects under the Ontario Small Town and Rural Development Infrastructure Initiative as previously announced in the First Quarter Ontario Finances.
  • The $39 million decrease in net income from Government Business Enterprises reflects the Ontario Energy Board decision noted above.
  • Other Non-Tax Revenue is projected to increase by $422 million, largely reflecting:
    • a $468 million gain from Chrysler’s repayment of an Ontario loan as previously announced in the First Quarter Ontario Finances; and
    • a $46 million fiscally neutral net decrease in Non-Tax Revenue reflecting revenue changes that have been offset by lower 2011–12 expense.

2011–12 Expense Changes Since the 2011 Budget

Total expense has decreased by $264.4 million primarily due to lower interest on debt expense resulting from lower interest rates than forecast at the time of the 2011 Budget and the lower deficit in 2010–11.

Table 3
Summary of Expense Changes Since the Budget1
($ Millions)
  2011–12
Program Expense Changes  
Proposed Healthy Homes Renovation Tax Credit 60.0 
Savings in business support programs and tax-related expenditures (60.0)
Emergency forest firefighting 175.0
Pan/Parapan American Games athletes' village 52.0
Other program expenses 9.6
Contingency funds (308.1)
Total Program Expense Changes (71.6)
Interest on Debt (192.9)
Total Expense Changes Since the Budget (264.4)
  • 1 See note at the bottom of Table 11 for more information regarding the fiscally neutral accounting change.
  • Note: Numbers may not add due to rounding.

Details of 2011–12 In-Year Expense Changes

Key 2011–12 expense changes from the 2011 Budget forecast include:

  • An increase of $60.0 million for the proposed Healthy Homes Renovation Tax Credit.
  • $60.0 million in savings in business support programs and tax-related expenditures, identified from lower spending on existing business support programs in the Ministry of Economic Development and Trade, as well as lower-than-forecast costs for tax-related expenditures in the Ministry of Revenue. These savings fully offset the cost of the proposed Healthy Homes Renovation Tax Credit in 2011–12.
  • An increase of $175.0 million for emergency forest firefighting, to provide additional resources during the 2011 fire season, the second-largest fire season for hectares burned since recordkeeping began in 1917.
  • An increase of $52.0 million for the Pan/Parapan American Games athletes’ village to support initial construction work at the site of the village. The work will move forward construction costs that were planned for future years, and will help ensure Ontario is ready for the Games in 2015 without increasing the total cost of the village.
  • A net increase of $9.6 million in other program expenses, including Disaster Relief Assistance for the Town of Goderich, the surrounding area and victims impacted by the August 2011 tornado; and for Ontario Bridge Training programs.
  • A net decrease of $308.1 million in the contingency funds, reflecting the balance of changes in program expense.

Interest on Debt expense is $192.9 million lower than forecast in the 2011 Budget. This reduction primarily reflects the impact of lower interest rates than those projected at the time of the Budget, and the lower deficit in 2010–11.

Section C: Ontario’s Medium-Term Fiscal Outlook

Medium-Term Revenue Outlook

The medium-term revenue forecast reflects the Ministry of Finance’s economic outlook and the estimated impact of government policy measures.

Table 4
Summary of Medium-Term Revenue Outlook1
($ Billions)
  Actual Projected Outlook
Revenus 2010-11 2011-12 2012-13 2013-14
Taxation Revenue 71.1 74.6 77.8 81.1
Government of Canada 23.0 21.6 21.6 22.8
Income from Government Business Enterprises 4.6 4.5 4,8 5.2
Other Non-Tax Revenue 7,9 7.6 7.2 7.2
Total Revenue 106.7 108.3 111.3 116.3
  • 1 See note at the bottom of Table 11 for more information regarding the fiscally neutral accounting change.
  • Note: Numbers may not add due to rounding.

The medium-term Taxation Revenue outlook reflects current revenue information and projections for the Province’s economic growth as outlined in Chapter II: Ontario’s Economic Outlook.

The forecast for Government of Canada transfers is based on existing federal–provincial funding arrangements. The decline from 2010–11 to 2011–12 is largely due to the decline in federal transitional assistance related to the introduction of the Harmonized Sales Tax and lower stimulus funding for infrastructure and labour market programs.

The outlook for Income from Government Business Enterprises (GBEs) is based on projections from the GBEs. Revenue is projected to decline slightly in 2011–12, largely due to the Ontario Lottery and Gaming Corporation’s strong performance in 2010–11, and Ontario First Nations’ receipt, beginning in 2011, of 1.7 per cent of gross gaming revenues under the Gaming Revenue Sharing and Financial Agreement, projected at $117 million in 2011–12. Over the forecast period, revenue is projected to grow at an average annual rate of 4.4 per cent. The forecast for GBEs includes $200 million in efficiencies by 2013–14 that the government has instructed its agencies to deliver.

The forecast for Other Non-Tax Revenue is based on projections provided by government ministries and provincial agencies. The decrease in 2011–12 reflects the government’s previously announced decision to upload the municipal share of Ontario Disability Support Program costs and the full-year impact of the replacement of certain alcohol charges, including Beer and Wine Fees, with taxes beginning on July 1, 2010. The further decline in 2012–13 reflects one-time factors that boosted Non-Tax Revenues in each of 2010–11 and 2011–12. These included, in 2010–11, the sale of a portion of the Province’s General Motors shares and the Province’s share of civil agreements with certain tobacco manufacturers and, in 2011–12, receipts from the repayment of an Ontario loan by Chrysler, as discussed in the First Quarter Ontario Finances.

Medium-Term Revenue Changes Since the 2011 Budget

Table 5
Summary of Medium-Term Revenue Changes Since the Budget1

($ Billions)
Source of Change 2011–12 2012–13 2013–14
Taxation Revenue (0.7) (0.5) (0.6)
Equalization Payments (0.2) (0.2) (0.3)
Other Revenue 0.4 0 0
Total Revenue Changes (0.4) (0.8) (0.9)
  • 1 See note at the bottom of Table 11 for more information regarding the fiscally neutral accounting change.
  • Note: Numbers may not add due to rounding.

The lower medium-term revenue outlook is largely due to lower taxation revenue and a downward revision to Ontario’s Equalization entitlement for 2011–12 as a result of a federal government calculation error.

The outlook for Taxation Revenue is lower due to slower economic growth and a lower estimated 2010 tax base indicated by tax returns processed since the 2011 Budget. There is an additional one-time impact in 2011–12 reflecting variances from the 2010–11 Public Accounts.

Equalization Payments are lower over the medium term due to a downward revision to Ontario’s entitlement for 2011–12 as a result of a federal government calculation error. This revision impacted the forecast going forward.

The $0.4 billion increase in Other Revenue in 2011–12 largely reflects Chrysler’s repayment of its Ontario loan discussed above. The forecast for Other Revenue also reflects fiscally neutral revenue changes referenced in Section B of this chapter.

Medium-Term Expense Outlook

Total expense is projected to grow to $128.7 billion by 2013–14 — below the forecast included in the 2011 Budget — primarily due to lower interest on debt expense.

Program expense over the medium term is consistent with the 2011 Budget Plan. This includes the impact of the proposed Healthy Homes Renovation Tax Credit announced in this Ontario Economic Outlook and Fiscal Review to help support jobs and economic activity, which has been accommodated without increasing overall program spending.

The government is committed to balancing the implementation of new programs and protecting public services while meeting the targets for eliminating the deficit.

Medium-Term Fiscal Outlook

Despite forecasts of slower economic growth, the Province is on track to meet the fiscal targets laid out in the 2011 Budget. Ontario’s fiscal outlook continues to project steadily declining deficits of $16.0 billion in 2011–12, $15.2 billion in 2012–13 and $13.3 billion in 2013–14.

Provincial revenue is now projected to grow at a slower rate than forecast, primarily due to lower economic growth projections for Ontario.

Total expense is now forecast to be lower than projected at the time of the 2011 Budget, primarily due to lower interest on debt expense.

A $1.0 billion reserve has been maintained for 2012–13 and 2013–14, recognizing ongoing global economic uncertainty and the significant volatility that could cause variances to both the Province’s revenue and expense outlooks.

To continue the progress Ontarians have made in building strong public health care and education, the Province must now sharpen its focus on managing growth in spending. Ontario has had success in meeting this challenge in the very recent past by lowering growth in program spending from about seven per cent to approximately four per cent last year.

The government remains committed to the fiscal targets laid out in the 2011 Budget. At that time the government presented a plan to hold average annual growth in program expense to 1.4 per cent until the budget is balanced in 2017–18. The Province will have to find better, more efficient ways to invest in key priority areas. Given the current economic uncertainty, the Commission on the Reform of Ontario’s Public Services is expected to recommend that the target for spending growth should be one per cent. The government will consider this and other advice as it prepares for the 2012 Budget.

Section D: Federal–Provincial Fiscal Arrangements

Over the last few years, the Province has worked with the federal government to promote economic growth and job creation to meet the challenge of a global recession, including providing financial support to the auto industry. The Province has also urged the federal government to address unfair treatment of Ontarians in the Canadian federation. Progress has been made on both these fronts, including recent federal legislation to increase the number of Ontario’s representatives in the federal House of Commons by 15 to 121. But more work remains to be done.

Historically, Ontario has been Canada’s economic engine, supporting investments in other provinces and the delivery of vital public services across the country. While Ontario’s economy has in many respects recovered from the global recession, continuing global economic uncertainty requires ongoing and enhanced investment in the foundation for sustained economic growth and job creation.

A key component of sustained economic growth and job creation is a strong workforce. Although the Province continues to invest in the tools that Ontarians need to prosper in the new economy, the federal Employment Insurance program is still failing to meet the needs of Ontario’s unemployed workers and the modern labour market.

The federal government supports industries like the oil industry. Ontario looks to the federal government to invest in the province’s future as a leader in green energy.

Ontario welcomes the federal government’s commitment to a six per cent annual increase in the Canada Health Transfer for the duration of the next health accord. The Province has called on the federal government to begin discussions with provincial and territorial governments on a new Ten-Year Health Accord, which would also include additional funding for seniors’ care and home care. These discussions must start as soon as possible in order to complete a new accord by the end of 2012.

In 2011–12, the Ontario government expects to receive $2.2 billion in Equalization payments, while Ontarians will contribute about $5.8 billion to the program. The $3.6 billion difference between what Ontarians pay into the Equalization program and the Province receives back from the program enables other provinces to reduce taxes, build roads and deliver public services to the people who live there.

Ontario is the only province that receives Equalization payments and that also sees its taxpayers pay more into the program than their government receives. Although the Province will receive 15 per cent of Equalization payments this year, Ontario taxpayers will contribute almost 40 per cent of the program’s cost. That is unfair. Equalization to other provinces costs each Ontarian about $270 this year.

Chart 2: Net Cost of Equalization to Ontarians (2011-12)

Canada’s transfer system should help — not hinder — the Ontario government’s ability to invest in the provincial economy. Reform of the federal transfer system must include more than the Canada Health Transfer. Increases in the Canada Health Transfer must not come at the expense of other important transfers such as the Canada Social Transfer and those that support services and programs like labour-market training, reducing health care wait times and infrastructure.

Federal initiatives should not undermine the ability of provincial governments to fund and deliver services that their taxpayers require, like health care and education, by forcing scarce resources to be diverted elsewhere. Accordingly, Ontario recently joined the Quebec government in asking the federal government to provide additional funding to address any provincial costs that may result from proposed changes to the criminal justice system. Ontario is also calling on the federal government to ensure that proposed measures such as income splitting and Tax-Free Savings Accounts do not adversely affect the Province’s capacity to fund core public services.

Ontarians demand that their federal and provincial governments work together. They also rightly demand that, as taxpayers, they be treated fairly.

The Ontario government looks forward to working with the federal government and other provincial and territorial governments to realize a comprehensive, equitable and efficient system of federal transfers that supports the sustainable delivery of quality services like health care across the country.

Section E: Details of Ontario’s Finances

This section provides information on the Province’s current fiscal outlook, historical financial performance and key fiscal indicators.

Table 6
Medium-Term Fiscal Plan and Outlook
($ Billions)
  Actual Projected Outlook
2010-111 2011-12 2012-13 2013-14
Revenue 106.7 108.3 111.3 116.3
Expense        
Programs 111.2 114.0 114.9 117.0
Interest on Debt2 9.5 10.1 10.6 11.7
Total Expense 120.7 124.1 125.5 128.7
Reserve 0.2 1.0 1.0
Surplus(Deficit) (14.0) (16.0) (15.2) (13.3)
Net Debt 214.5 238.4 261.8 281.8
Accumulated Deficit 144.6 160.6 175.7 189.1
  • 1 In the 2011 Budget, the interim projection for the 2010–11 deficit was $16.7 billion.
  • 2Interest on Debt expense is net of interest capitalized during construction of tangible capital assets of $0.2 billion in 2010–11, $0.3 billion in 2011–12, $0.3 billion in 2012–13 and $0.4 billion in 2013–14.
  • Note:Numbers may not add due to rounding.
Chart 3: Net Cost of Equalization to Ontarians (2011-12)

Table 7
Revenue

($ Millions)
  2008–09 2009–10 Actual
2010–11
Current
Outlook
2011–12
Taxation Revenue        
Personal Income Tax 25,738 23,393 23,624 24,779
Sales Tax1 17,021 17,059 18,813 20,134
Corporations Tax 6,748 5,615 8,383 8,904
Education Property Tax2 5,696 5,626 5,913 5,727
Employer Health Tax 4,617 4,545 4,733 4,991
Ontario Health Premium 2,776 2,763 2,934 2,945
Gasoline Tax 2,323 2,336 2,358 2,392
Land Transfer Tax 1,013 1,015 1,247 1,374
Tobacco Tax 1,044 1,083 1,160 1,142
Fuel Tax 698 658 702 721
Beer and Wine Tax (replacing Fees)3 397 538
Electricity Payments-In-Lieu of Taxes 830 516 321 518
Other Taxes 352 322 562 455
  68,856 64,931 71,147 74,620
Government of Canada        
Canada Health Transfer 8,942 9,791 10,184 10,713
Canada Social Transfer 4,079 4,204 4,330 4,460
Equalization 347 972 2,200
Infrastructure Programs 151 990 1,712 513
Labour Market Programs 797 1,253 1,201 891
Social Housing 520 498 493 482
Wait Times Reduction Fund 235 97 97 97
Other Federal Payments 1,867 1,440 4,052 2,200
  16,591 18,620 23,041 21,556
Government Business Enterprises        
Ontario Lottery and Gaming Corporation 1,921 1,924 1,956 1,738
Liquor Control Board of Ontario 1,410 1,440 1,562 1,641
Ontario Power Generation Inc./Hydro One Inc. 713 854 1,048 1,092
Other Government Enterprises (2) (23)
  4,042 4,195 4,566 4,471
Other Non-Tax Revenue        
Reimbursements 1,379 1,429 1,036 791
Vehicle and Driver Registration Fees 1,034 1,057 1,080 1,084
Electricity Debt Retirement Charge 970 907 944 931
Power Supply Contract Recoveries 953 1,409 1,288 1,351
Sales and Rentals 733 647 1,015 1,021
Other Fees and Licences 683 717 715 788
Beer and Wine Fees (replaced by Tax)3 459 451 181
Net Reduction of Power Purchase Contract Liability 373 348 339 317
Royalties 205 228 145 218
Miscellaneous Other Non-Tax Revenue 655 854 1,161 1,127
  7,444 8,047 7,904 7,628
Total Revenue 96,933 95,793 106,658 108,275
  • 1Sales Tax in 2010–11 includes Retail Sales Tax (RST) and Harmonized Sales Tax (HST). The RST was replaced with a value-added tax and combined with the federal Goods and Services Tax to create a federally administered HST. Sales Tax revenue includes the Ontario Sales Tax Credit and the energy component of the Ontario Energy and Property Tax Credit.
  • 2Education Property Tax revenue includes the property tax credit component of the Ontario Energy and Property Tax Credit.
  • 3Beer and Wine Tax replaces reduced Beer and Wine Fees and the reduced sales tax on alcohol. There is no net new revenue for the Province.
  • Note: Numbers may not add due to rounding.
Table 8
Total Expense

($ Millions)
Ministry Expense 2008–09 2009–10 Actual
2010–11
Current Outlook
2011–12
Aboriginal Affairs 55 67 71 77.1
Agriculture, Food and Rural Affairs1 877 1,265 888 1,244.3
Attorney General 1,749 1,663 1,737 1,907.9
Board of Internal Economy 188 187 194 293.9
Children and Youth Services 3,223 3,588 3,835 3,947.5
Citizenship and Immigration 89 101 106 114.5
Community and Social Services 7,992 8,621 9,148 9,770.0
Community Safety and Correctional Services 2,121 2,201 2,610 2,755.5
Consumer Services 18 17 18 20.4
Economic Development and Trade 245 223 267 343.1
Education1 20,471 21,177 21,850 23,212.0
Energy1 326 469 700 335.5
Environment1 379 375 521 526.1
Executive Offices 35 34 32 32.4
Finance1 602 492 496 552.0
Francophone Affairs, Office of 5 5 5 5.5
Government Services1 945 1,113 973 1,081.5
Health and Long-Term Care 40,352 42,725 44,085 47,128.5
Health Promotion and Sport1 382 385 385 398.4
Infrastructure2 (75) (178) (246) (72.7)
Labour 177 179 187 190.8
Municipal Affairs and Housing1 725 664 672 608.8
Natural Resources 605 624 676 822.9
Northern Development, Mines and Forestry 645 653 823 846.2
Research and Innovation1 295 333 349 369.5
Revenue1 635 1,129 900 904.2
Tourism and Culture1 566 668 793 900.5
Training, Colleges and Universities1 6,081 6,479 6,501 6,998.3
Transportation1 2,033 2,092 2,263 2,348.4
Interest on Debt3 8,566 8,719 9,480 10,096.9
Other Expense1 3,035 8,985 10,350 7,383.2
Year-End Savings4 (1,075.0)
Total Expense 103,342 115,055 120,669 124,068.1
  • 1Details on other ministry expense can be found in Table 9, Other Expense.
  • 2Credit expense amounts are a result of adjustments between the Ministry of Infrastructure and other ministries to reflect consolidated net spending on realty assets for the year.
  • 3 Interest on debt is net of interest capitalized during construction of tangible capital assets of $203 million in 2010–11 and $268 million in 2011–12.
  • 4As in past years, the Year-End Savings provision reflects anticipated underspending that has historically arisen at year-end due to factors such as program efficiencies and changes in project start-ups and implementation plans.
  • Note: Numbers may not add due to rounding.
Table 9
Other Expense
($ Millions)
Ministry Expense 2008-2009 2009-2010 Actual
2010-2011
Current
Outlook
2011-12
Agriculture, Food and Rural Affairs        
Time-Limited Investments in Infrastructure 618 1,496 293.4
Time-Limited Assistance 13 27 9
Education        
Teachers’ Pension Plan1 50 255 522 526.0
Energy        
Ontario Clean Energy Benefit 300 1,135.0
Environment        
One-Time Investments 68 37
Finance        
One-Time Automotive Sector Support2 75 3,022
Ontario Municipal Partnership Fund 905 781 684 623.7
Operating Contingency Fund 359.5
Pension Benefit Guarantee Fund 500
Power Supply Contract Costs 953 1,409 1,288 1,351.0
Government Services        
Pension and Other Employee Future Benefits 971 949 1,182 1,341.0
Health Promotion and Sport        
Time-Limited Investments in Infrastructure 48 288 44.2
Time-Limited Investments to Support Pan/Parapan Am Games 15 28.3
Infrastructure        
Capital Contingency Fund 32.3
Municipal Affairs and Housing        
Time-Limited Investments in Municipal Social and Affordable Housing Stock 585 668 58.7
One-Time Assistance 21
Research and Innovation        
One-Time Investments 5
Revenue        
Harmonized Sales Tax Transitional Support 3,039 1,440.6
Tourism and Culture        
One-Time Investments 22 3.1
Training, Colleges and Universities        
Time-Limited Investments 559 816 146.3
Transportation        
One-Time Transit and Infrastructure Investments 190
Total Other Expense 3,035 8,985 10,350 7,383.2
  • 1Numbers reflect PSAB pension expense. Ontario's matching contributions to the plan grow from $1,070 million in 2008–09 to $1,381 million in 2011–12.
  • 2Reflects the fiscal impact of Ontario's $4.6 billion in support to the automotive industry.
  • Notes: Future updates will reflect the impact of recently announced ministry restructuring details.
  • Numbers may not add due to rounding.


Table 10
2011–12 Infrastructure Expenditures

($ Millions)
Sector 2011–12 Current Outlook
Total
Infrastructure
Expenditures

2010–11 Actual
Investment in Capital Assets1 Transfers and Other Infrastructure Expenditures2 Total Infrastructure Expenditures
Transportation        
Transit 1,735 2,093 391 2,483
Provincial Highways 1,925 2,114 2,114
Other Transportation3 769 712 92 804
Health        
Hospitals 2,625 2,620 10 2,630
Other Health 439 120 171 291
Education 1,714 2,092 30 2,121
Postsecondary        
Colleges 344 168 168
Universities 105 107 107
Water/Environment 245 41 249 290
Municipal and Local Infrastructure 514 134 183 316
Justice 613 851 52 903
Other 583 707 18 725
Short-Term Stimulus Investments 3,598 42 451 493
Subtotal 15,209 11,692 1,754 13,447
Less: Other Partner Funding4 597 674 674
Total Excluding Partner Funding 14,612 11,019 1,754 12,773
Less: Flow-Throughs5 340 96 578 673
Total Provincial Expenditure6 14,272 10,923 1,177 12,100
  • 1Investment in Capital Assets includes interest capitalized during construction of tangible capital assets of $268 million.
  • 2Mainly consists of transfers for capital purposes to municipalities and universities, and expenditures for capital repairs.
  • 3Other Transportation includes planning activities, property acquisition, highway service centres and other infrastructure programs (e.g., municipal/ local roads, remote airports).
  • 4Third-party contributions to capital investment in the consolidated sectors (schools, colleges and hospitals).
  • 5Mostly federal government transfers for capital investments.
  • 6Total Provincial Infrastructure Expenditure includes Investment in Capital Assets of $9.8 billion for 2010–11. This includes a one-time adjustment of $0.3 billion for consolidation of a number of agencies. This also includes adjustments for the net book value of assets disposed of during the year, as well as changes in valuation.
  • Note: Numbers may not add due to rounding.
Table 11
Ten-Year Review of Selected Financial and Economic Statistics1
($ Millions)
  2002–032 2003–04 2004–05 2005–063 2006–07 2007–08 2008–09 2009–102 Actual 2010–11 Current Outlook 2011–12
Financial Transactions                    
Revenue 74,675 74,269 83,861 90,305 96,640 103,579 96,933 95,793 106,658 108,275
Expense                    
Programs 64,864 70,148 76,048 80,988 85,540 94,065 94,776 106,336 111,189 113,971
Interest on Debt4 9,694 9,604 9,368 9,019 8,831 8,914 8,566 8,719 9,480 10,097
Total Expense 74,558 79,752 85,416 90,007 94,371 102,979 103,342 115,055 120,669 124,068
Reserve 200
Surplus/(Deficit) 117 (5,483) (1,555) 298 2,269 600 (6,409) (19,262) (14,011) (15,994)
Net Debt5 132,647 138,816 140,921 152,702 153,742 156,616 169,585 193,589 214,511 238,368
Accumulated Deficit 118,705 124,188 125,743 109,155 106,776 105,617 113,238 130,957 144,573 160,567
Gross Domestic Product (GDP) at Market Prices 477,763 493,081 516,106 537,383 560,576 583,946 587,055 581,635 612,494 636,996
Personal Income 369,420 381,127 400,994 419,457 442,736 466,051 479,217 480,061 500,048 516,550
Population — July (000s) 12,091 12,242 12,391 12,528 12,665 12,793 12,934 13,073 13,228 13,373
Net Debt per Capita (dollars) 10,971 11,339 11,373 12,189 12,139 12,242 13,112 14,808 16,216 17,825
Personal Income per Capita (dollars) 30,553 31,133 32,362 33,482 34,957 36,430 37,051 36,722 37,802 38,626
Interest on Debt as a per cent of Revenue 13.0 12.9 11.2 10.0 9.1 8.6 8.8 9.1 8.9 9.3
Net Debt as a per cent of GDP 27.8 28.2 27.3 28.4 27.4 26.8 28.9 33.3 35 37.4
Accumulated Deficit as a per cent of GDP 24.8 25.2 24.4 20.3 19.0 18.1 19.3 22.5 23.6 25.2
  • 1Revenue and expense have been restated to reflect a fiscally neutral accounting change for the revised presentation of education property taxes, as described in the 2010 Ontario Budget.
  • 2Starting in 2002–03, investments in major tangible capital assets owned by the Province (land, buildings and transportation infrastructure) have been capitalized and amortized to expense over their useful lives. Starting in 2009–10, investments in minor tangible capital assets owned by the Province were capitalized and amortized to expense. All capital assets owned by consolidated organizations are being accounted for in a similar manner.
  • 3 Starting in 2005–06, the Province’s financial reporting was expanded to include hospitals, school boards and colleges. Total expense prior to 2005–06 has not been restated to reflect expanded reporting.
  • 4Interest on Debt is net of interest capitalized during construction of tangible capital assets of $148 million in 2009–10, $203 million in 2010–11 and $268 million in 2011–12.
  • 5Starting in 2009–10, Net Debt includes the net debt of hospitals, school boards and colleges consistent with Public Sector Accounting Board standards. For comparative purposes, Net Debt has been restated from 2005–06 to 2008–09 to conform with this revised presentation. Net Debt has also been restated from 2003–04 to 2005–06 to reflect the value of hydro corridor lands transferred to the Province from Hydro One Inc.
  • Sources: Ontario Ministry of Finance and Statistics Canada.
  • Note: Revenue and expense from the 2011 Budget and First Quarter Ontario Finances have both increased by identical amounts ($0.3 billion) from the original presentation to reflect a fiscally neutral reclassification of three government agencies (Algonquin Forestry Authority, Niagara Parks Commission and Ontario Clean Water Agency) from government business enterprises to other government organizations since they no longer meet the criteria for classification as government business enterprises. As well, three other government organizations (Forestry Renewal Trust, Ontario Arts Council and Ottawa Convention Centre) have recently crossed the threshold for consolidation. Although the consolidation of these organizations resulted in a one-time increase to revenue in the 2010–11 Public Accounts ($0.2 billion), these changes are not expected to impact the Province's annual forecasted surplus/deficit.
Chart 4: Composition of Revenue, 2011-12
Chart 5: Composition of Total Expense, 2011-12
Chart 6: Composition of Program Expense, 2011-12