2010 Ontario Budget: Chapter II: Ontario's Economic Outlook and Fiscal Plan
Section G: Accountability, Transparency and Financial Management

The government is committed to ensuring Ontarians receive the best value for their tax dollars. This objective is achieved by enhancing the public’s understanding of government finances, improving transparency in financial reporting and strengthening accountability to the public.

Enhancing Public Understanding of Government Finances

Ontario, along with the federal, territorial and other provincial governments, has been working with the Public Sector Accounting Board (PSAB) of the Canadian Institute of Chartered Accountants (CICA) to improve public-sector financial reporting. The aim is to ensure that Canadian public-sector accounting standards continue to support sound public policy decision-making, government fiscal accountability and the clear transparent reporting of information on government finances to the public.

Ontario and the other governments in Canada are concerned that changes PSAB recently proposed to accounting standards are inconsistent with these objectives. Ontario raised these concerns with PSAB through an interjurisdictional Joint Working Group of senior government and accounting standards officials. The Group identified concerns with PSAB’s conceptual framework that underlies the board’s development of all public-sector accounting standards in Canada.

The government believes Ontarians, and all Canadians, need a set of public-sector accounting standards that:

• reflects governments’ public policy objectives and the role of public-sector organizations in delivering public services;
• supports governments’ and public-sector organizations’ accountability for the spending of tax dollars;
• reflects the unique structure of governments and the public sector in Canada; and
• gives the public transparent and understandable information on government finances.

Currently, the CICA prescribes four different sets of accounting standards for use in the public sector in Canada. In 2011, the CICA will introduce another set, International Financial Reporting Standards. Each of these sets of standards measures, records and reports public-sector financial results differently. This results in public-sector organizations reporting different financial results in similar circumstances. This distorts transparency and fiscal accountability for the expenditure of public monies.

Accordingly, there is a need for PSAB to establish a consistent set of accounting standards for all public-sector organizations in Canada as soon as possible. In the interim, the Ontario government will provide direction to provincial government organizations and enterprises to ensure consistent, transparent financial reporting and fiscal accountability are sustained throughout Ontario’s public sector.

Improved Transparency in Financial Reporting

Starting with this Budget, for improved transparency in reporting, a number of important changes have been implemented in how revenues and expenses are presented. These presentation changes do not impact the Province’s annual surplus or deficit results or accumulated deficit. These changes affect the presentation of:

• education property taxes and school board expenses;
• refundable property and sales tax credits; and
• net debt.

Strengthening Accountability To The Public

As part of continuing efforts to strengthen the financial management, transparency and accountability of Ontario’s ministries and agencies, the government is enhancing existing policies and processes to improve accountability, oversight and reporting, including:

• strengthening the assurance that Ontario’s ministries and government agencies are spending taxpayer dollars wisely, including strict new guidelines on procurement and hospitality expenses;
• strong control measures to ensure stimulus grants are spent wisely by recipient organizations. These controls ensure that funds are spent for the intended purpose and that results are achieved on time and on budget;
• enhancing the quality and transparency of disclosures under the Public Sector Salary Disclosure Act, 1996 by disclosing salaries of individuals earning over $100,000 who are seconded to government ministries from public-sector organizations; and
• proposing a number of amendments to the Financial Administration Act and other related statutes to improve financial management and reporting transparency. These amendments include the government’s authority to direct organizations in the province’s reporting entity on which accounting policies to apply when preparing their financial statements.