2012 Ontario Economic Outlook and Fiscal Review

CHAPTER III: Fiscal Outlook

Highlights

  • The results from the 2011–2012 Public Accounts of Ontario confirmed a $13.0 billion deficit for 2011–12 — $3.3 billion ahead of the 2011 Budget Plan and 47 per cent lower than the 2009–10 deficit of $24.7 billion forecast in the fall of 2009.
  • 2012–13 deficit outlook — $14.4 billion, $0.4 billion ahead of the 2012 Budget Plan.
  • The Province remains on track to meet the 2012 Budget deficit targets in 2013–14 and 2014–15.
  • Total expense is unchanged from the 2012 Budget Plan.

Section A: Overview

The 2012 Budget outlined the next stage in the government’s plan to eliminate the deficit through a renewed focus on expenditure management. In the 2011–2012 Public Accounts of Ontario, the government announced the deficit for 2011–12 was $13.0 billion, marking the third consecutive year in which the Province has improved on its fiscal projections. This result is also 47 per cent lower than the 2009–10 deficit of $24.7 billion forecast in the fall of 2009, at the depth of the global recession.

The deficit for 2012–13 is currently projected to be $14.4 billion, an improvement of $0.4 billion from the 2012 Budget forecast. The plan to eliminate the deficit is working, on track and achieving results.

While Ontario’s economy is growing modestly, it is facing challenges in the context of global economic uncertainty. Economic conditions in Europe have worsened, the growth of emerging market economies has slowed and the U.S. economy remains tentative.

Moving forward, even in the face of continued global economic uncertainty, the government is more focused than ever on reaching the goals it set out on the path to eliminating the deficit. Towards that end, the deficit outlook for 2012–13 has improved from the 2012 Budget forecast and the deficit projections for 2013–14 and 2014–15 remain on track with the targets outlined in the 2012 Budget.

This chapter outlines Ontario’s fiscal outlook for 2012–13 and the medium-term forecast for 2013–14 and 2014–15.

Ontario’s Medium-Term Fiscal Outlook

Section B: 2012–13 Fiscal Performance

In the fall of 2009, at the depth of the global economic recession, Ontario was facing a $24.7 billion deficit. The government laid out a plan that included steadily declining deficits and eliminating the deficit by 2017–18. Three years later, this plan remains on track.

The 2012 Budget proposed strong action to balance the budget. As outlined in the update to the fiscal plan released on April 25, 2012, the government remains committed to managing the growth in spending and eliminating the deficit by 2017–18.

The deficit for 2012–13 is currently projected to be $14.4 billion, an improvement of $0.4 billion from the 2012 Budget forecast.

The 2012–13 revenue projection of $113,019 million is $445 million above the 2012 Budget outlook, largely reflecting a higher estimated 2011–12 tax base.

Both program expense and total expense are on track with the 2012 Budget projections, reflecting the government’s commitment to manage growth in expense.

The 2012 Budget Plan included prudence in the form of a $1.0 billion reserve in 2012–13 to protect the fiscal plan from the potential impact of external events that could deteriorate the Province’s fiscal performance. With the revenue outlook currently tracking above the 2012 Budget forecast, and Provincial spending unchanged, the fiscal plan continues to maintain that reserve. If the reserve is not needed by year-end, the deficit will be further reduced by $1.0 billion.

TABLE 3.1 2012–13 In-Year Fiscal Performance
($ Millions)
  Budget
Plan1
Current
Outlook
Change Since
Budget
Revenue 112,573 113,019 445
Expense      
Programs 115,774 115,788 14
Interest on Debt 10,619 10,601 (18)
Total Expense 126,393 126,389 (4)
Reserve 1,000 1,000
Surplus/(Deficit) (14,820) (14,371) 449
1 Reflects the 2012 Budget Plan as outlined in the April 25, 2012 fiscal update.
Note: Numbers may not add due to rounding.

2012–13 Revenue Changes Since the 2012 Budget

The 2012–13 revenue projection of $113,019 million is $445 million above the 2012 Budget outlook, largely reflecting a higher estimated 2011–12 tax base.

TABLE 3.2 Summary of Revenue Changes Since the Budget1
($ Millions)
    2012–13
Taxation    
Corporations Tax 300  
Personal Income Tax 280  
Land Transfer Tax 25  
Ontario Health Premium 25  
Sales Tax (200)  
Total Taxation   430
Government of Canada   15
Total Revenue Changes Since the Budget   445
1 Reflects the 2012 Budget Plan as outlined in the April 25, 2012 fiscal update.
Note: Numbers may not add due to rounding.

Details of 2012–13 In-Year Revenue Changes

Key revenue changes since the 2012 Budget forecast include the following:

  • Corporations Tax (CT) revenue is up $300 million due to stronger 2011 results based on tax returns processed since the 2012 Budget.
  • Personal Income Tax (PIT) revenue is projected to be $280 million, or 1.1 per cent, higher due to stronger 2011 results based on tax returns processed since the 2012 Budget
  • Land Transfer Tax is projected to be $25 million higher, reflecting stronger receipts to date.  
  • Ontario Health Premium revenue is projected to be $25 million, or 0.8 per cent, higher due to stronger 2011 results based on tax returns processed since the 2012 Budget.
  • Sales Taxes are $200 million lower due to the higher cost of transitional housing measures provided under Ontario’s Harmonized Sales Tax (HST) and lower federal estimates of Ontario’s HST entitlement for 2012.
  • Government of Canada transfers are up $15 million due largely to federal funding to support the extension of the Targeted Initiative for Older Workers agreement.

2012–13 Expense Changes Since the 2012 Budget

A key component of the government’s plan to eliminate the deficit is the continued effort towards managing the growth in expense. Consistent with this commitment, total expense has decreased by $3.7 million compared to the 2012 Budget Plan.

TABLE 3.3 Summary of Expense Changes Since the Budget1
($ Millions)
  2012–13
Program Expense Changes  
Emergency forest firefighting 72.0
Disaster relief assistance 16.0
Contingency funds (88.0)
Extension of Targeted Initiative for Older Workers, offset by federal funding 15.3
Other program expenses (1.0)
Total Program Expense Changes 14.3
Interest on Debt (18.0)
Total Expense Changes Since the Budget (3.7)
1 Reflects the 2012 Budget Plan as outlined in the April 25, 2012 fiscal update.
Note: Numbers may not add due to rounding.

Details of 2012–13 In-Year Expense Changes

Key 2012–13 expense changes from the 2012 Budget forecast include:

  • An increase of $72.0 million for emergency forest firefighting to provide additional resources during the 2012 fire season.
  • An increase of $16.0 million to support disaster relief assistance for the City of Thunder Bay, the Township of Conmee and the Municipality of Oliver Paipoonge, for flooding that occurred in late May.
  • A decrease of $88.0 million in the contingency funds to offset expense increases for disaster relief to the City of Thunder Bay, the Township of Conmee and the Municipality of Oliver Paipoonge; and emergency forest firefighting.
  • An increase of $15.3 million as a result of federal funding to extend the Targeted Initiative for Older Workers program in the Ministry of Training, Colleges and Universities.
  • A decrease of $1.0 million in all other program expenses primarily arising from the establishment of the Nawiinginokiima Forest Management Corporation, a new government agency that will manage the forest and oversee the sale of timber in an area located along the northeast shore of Lake Superior.

Interest on debt expense is $18.0 million lower than forecast in the 2012 Budget, primarily as a result of the improvement in the deficit projection for 2012–13 and lower-than-forecast interest rates.

Section C: Ontario’s Medium-Term Fiscal Outlook

Medium-Term Revenue Outlook

The medium-term revenue outlook reflects current revenue information and projections for the Province’s economic growth as outlined in Chapter II: Economic Outlook. The current revenue outlook is prudent given economic uncertainties. 

TABLE 3.4 Summary of Medium-Term Revenue Outlook
($ Billions)
  Actual Projected Outlook
  2011–12 2012–13 2013–14 2014–15
Revenue        
Taxation Revenue 75.6 79.6 81.6 85.3
Government of Canada 21.3 21.8 23.0 23.5
Income from Government Business Enterprises 4.4 4.1 4.4 5.3
Other Non-Tax Revenue 8.5 7.6 7.6 7.5
Total Revenue 109.8 113.0 116.6 121.6
Note: Numbers may not add due to rounding.

Taxation Revenue is projected to grow at an average annual rate of 4.1 per cent compared to average nominal gross domestic product (GDP) growth of 3.7 per cent. The taxation revenue outlook is prudent given economic uncertainties discussed in Chapter II and could be significantly affected by key revenue information still to be received. The latter includes final 2011 corporate and personal income tax return processing results, as well as federal government entitlement estimates for Harmonized Sales Tax (HST) to be received in December 2012 and ongoing information on HST assessments.

Government of Canada transfers are projected to grow at an average annual rate of 3.3 per cent over the medium term. The increase over the forecast period largely reflects projected increases in the major Government of Canada transfers.

The forecast for Government Business Enterprises is based on information provided by the individual enterprises. The decrease in 2012–13 reflects a decline in net income of the Ontario Lottery and Gaming Corporation (OLG) and the combined net income of Ontario Power Generation Inc. and Hydro One Inc. The projected increase over the medium term is primarily due to increases in net income of the Liquor Control Board of Ontario and OLG as a result of planned efficiency gains and additional measures proposed in the 2012 Budget

The forecast for Other Non-Tax Revenue is based on information provided by government ministries and provincial agencies. The decline in 2012–13 largely reflects a one-time gain in 2011–12, including Chrysler’s repayment of an Ontario loan and higher-than-usual recoveries of prior-year expenditures from government ministries.

Medium-Term Revenue Changes Since the 2012 Budget

TABLE 3.5 Summary of Medium-Term Revenue Changes Since the Budget
($ Billions)
Source of Change 2012–13 2013–14 2014–15
Higher 2011 Tax Base 0.4 0.3 0.4
Slower Economic Growth 0.0 (0.3) (0.4)
Total Revenue Changes 0.4 0.0 0.0
Note: Numbers may not add due to rounding.

Processing of 2011 corporate and personal income tax returns during 2012, as well as finalizing other taxation revenue amounts for 2011–12, boost the tax base and the taxation revenue forecast in 2012–13 and over the medium term.

In 2013–14 and 2014–15, slower economic growth lowers taxation revenues, offsetting the revenue boost due to the higher 2011 tax base.

Medium-Term Expense Outlook

Total expense is projected to grow to $130.3 billion by 2014–15 — unchanged from the forecast included in the 2012 Budget.

Program expense over the medium term is also consistent with the 2012 Budget Plan. These projections reflect the government’s commitment to control growth in program expense while protecting gains made in health and education.

The interest on debt forecast over the medium term is on track with the projections outlined in the 2012 Budget Plan.

Medium-Term Fiscal Outlook

Even in the face of continued global economic uncertainty, Ontario’s fiscal outlook remains on track, including steadily declining deficits of $14.4 billion in 2012–13, $12.8 billion in 2013–14 and $10.1 billion in 2014–15.

TABLE 3.6 Medium-Term Fiscal Plan and Outlook
($ Billions)
  Actual Projected Outlook
2011–12 2012–13 2013–14 2014–15
Revenue 109.8 113.0 116.6 121.6
Expense        
Programs 112.7 115.8 117.0 117.9
Interest on Debt1 10.1 10.6 11.2 12.3
Total Expense 122.7 126.4 128.2 130.3
Reserve 1.0 1.2 1.5
Surplus/(Deficit) (13.0) (14.4) (12.8) (10.1)
1 Interest on Debt expense is net of interest capitalized during construction of tangible capital assets of $0.2 billion in 2011–12, $0.2 billion in 2012–13, $0.4 billion in 2013–14, and $0.4 billion in 2014–15.
Note: Numbers may not add due to rounding.

The fiscal outlook continues to include a reserve of $1.0 billion in 2012–13, $1.2 billion in 2013–14 and $1.5 billion in 2014–15 to recognize both the continuing global economic uncertainty and the uncertain nature of longer-term revenue and expense projections. If the reserve is not needed by the end of the current fiscal year, the government will use this amount to further reduce the deficit in 2012–13.

Consistent with the 2012 Budget Plan, the government remains committed to managing growth in program spending. In fact, the fiscal action outlined in the 2012 Budget means that for every additional dollar in new revenue measures, the plan includes four dollars of expense measures to close the fiscal gap that would emerge if no new action is taken to control growth in Provincial expense.

The projections for both medium-term program and total expense are unchanged from the 2012 Budget Plan — confirming that the government’s plan remains on track.

Section D: Federal–Provincial Relations

During the recent global recession, the governments of Ontario and Canada worked together to protect Ontario families and their jobs. Building on this success, Ontario wants to do more with the federal government to benefit the Ontario and Canadian economies.

Opportunities to Disentangle Public Services

Ontario wants to work with the federal government to disentangle programs where policy areas are shared to remove duplication, save taxpayers money and provide better services to citizens.

Labour-Market Training

The federal government’s support for training programs through a number of agreements, each with its own program and client eligibility requirements, limits Ontario’s ability to realize the benefits of an efficient and effective integrated delivery approach. Ontario calls on the federal government to:

  • renew the Labour Market Agreement that expires on March 31, 2014; and
  • give the Province greater flexibility to design and deliver its employment and training programs to meet the evolving needs of workers, communities and businesses.

Immigration

Skilled newcomers are fundamental to Ontario’s economic future. The federal government should work with the Province to strengthen Ontario’s role in meeting its needs for skilled workers; reduce duplication; and enhance the effectiveness of settlement and integration services for immigrants.

On October 3, 2012, the government received the final report from Ontario’s Expert Roundtable on Immigration, which will help inform Ontario’s first immigration strategy.

As outlined in the 2012 Budget, the Ontario government is committed to developing an immigration strategy that will focus on how immigration can best support the province’s economic development and ensure Ontario immigrants succeed.

Correctional Services

Both Ontario and the federal government provide correctional services, with inmates serving sentences of less than two years in provincial correctional facilities. If responsibility for inmates serving more than six months were transferred to the federal government, inefficient and costly duplication of services would be reduced because only one level of government would need to provide rehabilitative services to offenders serving longer sentences. These inmates would also benefit from access to federal rehabilitation services — services important for keeping Ontario’s communities safe.

Working Together to Build the Economy

Continued economic growth is important to every Canadian. In other provinces, the federal government supports the growth of the oil and gas industries and the energy sector with investments in technology developments such as carbon capture and storage and through loan guarantees. Ontario is proud of the work being done by Canadians in other provinces and territories to strengthen the national economy. Opportunities also exist in Ontario that merit federal investment.

Support for Clean Energy

Ontario has become a North American leader in clean energy with its commitment to replace coal-fired electricity generation with cleaner sources, the feed-in-tariff program and a variety of conservation programs. In its August 2012 report, Canada’s Emissions Trends, the federal government recognized Ontario’s important contributions to meeting Canada-wide greenhouse gas emission reduction targets under the Copenhagen Accord. However, the federal government must do more to support Ontario’s efforts to build a clean energy system.

Ontario is seeking federal support and the appropriate regulatory environment for an east-west transmission grid that would transmit electricity across provincial borders. Greater regional integration of electricity grids would encourage the development of new, larger-scale renewable projects that would benefit the economy, both in Ontario and elsewhere in the country.

Employment Insurance

For several years, the Ontario government has demonstrated that the federal Employment Insurance (EI) program is failing to meet the needs of the modern labour market and Ontario’s unemployed workers. Although temporary federal EI measures were helpful during the recent recession, they have not addressed the longer-term issues with the EI program.

  • The share of unemployed workers receiving EI regular benefits has fallen significantly in Ontario since 1990. In 2011, Ontario’s coverage rate was 30.6 per cent, compared with an average coverage rate of 49.2 per cent in the other nine provinces.
  • Ontario workers and employers contribute more to the EI program than they receive. In 2011, Ontario workers and employers paid an estimated 40 per cent of premiums, but received only 33 per cent of total income benefits. In 2011, Ontarians contributed about $7.3 billion in EI premiums while receiving about $6.0 billion in EI income benefits.
  • As EI eligibility is a requirement for many EI-funded training services, low EI coverage means many of Ontario’s unemployed lack access to training.

The federal government must improve the fairness and transparency of the EI system.

Agricultural Support

Agriculture is a shared federal–provincial responsibility in Canada. Through the recently renewed Growing Forward 2 Multilateral Agreement, the Ontario government receives federal support for 60 per cent of the cost of eligible programs. The Ontario Risk Management Program (RMP), however, is not part of this framework and the federal government does not contribute towards it. Despite continued requests for the federal government to provide its 60 per cent share of the RMP, the federal government has refused to contribute towards it.

The demand-driven farm income support programs are a source of financial risk to the Province as payments can be unpredictable. The Ministry of Agriculture, Food and Rural Affairs is working with farmers to reshape these programs, including the RMP, through a capped program structure to limit financial exposure and leverage federal dollars.

Infrastructure

The federal government has now concluded public consultations on the development of a long-term infrastructure plan for public infrastructure that will extend beyond the expiry of the Building Canada plan in 2014. The Ontario government participated in these consultations and released a submission outlining its principles and recommendations for the federal plan.

This year alone, the Province will invest almost $13 billion in Ontario infrastructure. That is roughly twice as much as the federal government will spend on infrastructure in the whole of Canada. The Province encourages greater federal investment in infrastructure in Ontario. Past experience has demonstrated the need for federal investment to be flexible enough to accommodate projects that support Ontario’s greatest priorities.

These projects will help reduce bottlenecks to economic growth (such as congestion and commute times), will strengthen competitiveness and productivity, and will do so in a way that maximizes the benefits of provincial and federal government investments.

Working Together on a Solid Fiscal Foundation

Fiscal Arrangements

Fiscal arrangements between the federal government and the provinces and territories provide important support for public services such as health care, postsecondary education and social services for people across Canada.

At its July 2012 meeting, the Council of the Federation directed a working group of provincial and territorial finance ministers to report on options to improve the federal transfers system. Ontario looks forward to considering the report of this group as a starting point for a national conversation on how to create a transparent, fair and reliable transfers system that will support the ability of all governments to deliver quality public services into the future.

Unfortunately, current federal–provincial fiscal arrangements put Ontario at a disadvantage. Ontario is fifth among provinces in ability to raise revenues in 2012–13 but falls to ninth after federal transfers are included.

Ontario’s Fiscal Capacity Is Fifth in 2012–13 but Federal Transfers Drop Ontario to Ninth

“Even though Ontario receives Equalization, Ontarians continue to contribute more to the program than they receive in return. This highlights a problem with the arrangements in the federation — federal transfers disproportionately benefit other provinces, at a cost to Ontarians. For instance, Ontario is fifth among provinces in ability to raise revenues, but falls to near last after federal transfers are included — above only Prince Edward Island.”

Commission on the Reform of Ontario’s Public Services, Public Services for Ontarians: A Path to Sustainability and Excellence, 2012.

Ontario is a net contributor to the Equalization program. In 2012–13, Ontarians will contribute approximately $6 billion to the Equalization program while Ontario will receive approximately $3.3 billion in return. Ontarians’ net contribution to the program — $2.7 billion that could support vital public services here in Ontario — is redistributed to other regions of Canada to subsidize programs and services there that Ontarians themselves may not enjoy.

Net Contribution to Equalization (2012–13)

Although Ontario is committed to the principles of the Equalization program, it will not support a system of transfers that puts Ontario’s public services at risk and provides inequitable levels of support to different parts of Canada. The fiscal arrangements between the federal government and the provinces need to be modernized to reflect current economic circumstances and support vital public services.

Sufficient, Sustainable Federal Support

As Ontario moves forward with transforming the way public services are delivered, it looks to the federal government to support its efforts. The federal government should not undermine Ontario’s plan to eliminate the deficit and protect health care and education.

Certain federal actions — such as those included in the Safe Streets and Communities Act — will increase costs for the Province and limit Ontario’s ability to provide the public services on which its residents rely. Ontario calls on the federal government to provide additional funding to fully address any provincial costs that may result from federal policy changes, including changes to the criminal justice system.

Furthermore, when the federal government provides time-limited support for provincial programs, it can leave provinces with significant ongoing financial pressures and negatively affect citizens who have come to rely on these key services. Two recent examples of this kind of funding are the Police Officers Recruitment Fund, which will expire on March 31, 2013, and support for the reduction of health care wait times, which will expire on March 31, 2014.

The Province cannot step in every time the federal government decides to cut funding. Therefore it calls on the federal government to ensure that it provides adequate and sustainable support for the delivery of essential provincial services on which Ontarians rely.

Federal Old Age Security

In its 2012 budget, the federal government increased the entitlement age by two years for all benefit programs in the federal Old Age Security (OAS) system. This change will have significant cost impacts on Ontario’s social programs, including social assistance, starting in 2023. The federal government has indicated that it will compensate provinces and territories for net additional costs incurred as a result of this change. Ontario expects the federal government to honour this commitment when the time comes.

Strengthening Canada’s Retirement Income System

Ontario is committed to improving the retirement income system. This cannot be accomplished without the federal government being a true partner in the process. Ontario would prefer a two-track strategy: a modest, fully funded enhancement to the Canada Pension Plan (CPP), supplemented by pension innovation to expand retirement plan coverage and encourage lower-cost savings options.

Canada Pension Plan

Ontario will continue to collaborate with the federal government and other provinces to develop a modest, phased-in and fully funded enhancement to the CPP to help ensure adequate and predictable earnings replacement for future retirees. This change is the core element of a strategy to strengthen the national retirement income system.

Pooled Registered Pension Plans

Pooled registered pension plans (PRPPs) are intended to make it easier to save for retirement by providing employees and the self-employed with a new type of simple, low-cost savings vehicle that is professionally managed and portable.

On June 28, 2012, the federal government passed the Pooled Registered Pension Plans Act as a first step in setting out the legislative framework for PRPPs that applies to federally regulated industries and employment in the territories. Ontario has a number of concerns with the federal model as currently proposed.

Provincial legislation is required to implement PRPPs in Ontario and other provinces. Ontario will continue to work collaboratively with other provinces and the federal government to develop this model. However, Ontario believes the implementation of pension innovation should be tied to CPP enhancement as part of a comprehensive approach.

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 3.7 Medium-Term Fiscal Plan and Outlook
($ Billions)
  Actual Projected Outlook
2011–12 2012–13 2013–14 2014–15
Revenue 109.8 113.0 116.6 121.6
Expense        
Programs 112.7 115.8 117.0 117.9
Interest on Debt1 10.1 10.6 11.2 12.3
Total Expense 122.7 126.4 128.2 130.3
Reserve 1.0 1.2 1.5
Surplus/(Deficit) (13.0) (14.4) (12.8) (10.1)
Net Debt 235.6 257.6 277.6 293.3
Accumulated Deficit 158.4 172.8 185.6 195.7
1 Interest on Debt expense is net of interest capitalized during construction of tangible capital assets of $0.2 billion in 2011–12, $0.2 billion in 2012–13, $0.4 billion in 2013–14, and $0.4 billion in 2014–15.
Note: Numbers may not add due to rounding.
TABLE 3.8 Revenue
($ Millions)
  2009–10 2010–11 Actual
2011–12
Current
Outlook
2012–13
Taxation Revenue        
Personal Income Tax 23,421 23,711 24,548 26,365
Sales Tax1 17,059 18,813 20,159 20,935
Corporations Tax 6,227 9,067 9,944 11,098
Education Property Tax2 5,506 5,659 5,765 5,631
Employer Health Tax 4,545 4,733 5,092 5,149
Ontario Health Premium 2,763 2,934 2,916 3,123
Gasoline Tax 2,336 2,358 2,380 2,371
Land Transfer Tax 1,015 1,247 1,432 1,399
Tobacco Tax 1,083 1,160 1,150 1,185
Fuel Tax 658 702 710 724
Beer and Wine Tax 397 561 557
Electricity Payments-In-Lieu of Taxes 516 321 367 555
Other Taxes 322 562 574 460
  65,451 71,664 75,598 79,553
Government of Canada        
Canada Health Transfer 9,791 10,184 10,705 11,378
Canada Social Transfer 4,204 4,330 4,469 4,596
Equalization 347 972 2,200 3,261
Infrastructure Programs 990 1,712 362 204
Labour Market Programs 1,253 1,201 904 912
Social Housing 498 493 489 476
Wait Times Reduction Fund 97 97 97 97
Other Federal Payments 1,440 4,052 2,079 867
  18,620 23,041 21,305 21,791
Government Business Enterprises        
Ontario Lottery and Gaming Corporation 1,924 1,956 1,882 1,737
Liquor Control Board of Ontario 1,440 1,562 1,659 1,673
Ontario Power Generation Inc./Hydro One Inc. 854 1,048 872 655
Other Government Enterprises (23)
  4,195 4,566 4,413 4,065
Other Non-Tax Revenue        
Reimbursements 1,429 1,036 831 990
Vehicle and Driver Registration Fees 1,057 1,080 1,075 1,163
Electricity Debt Retirement Charge 907 944 952 946
Power Supply Contract Recoveries 1,409 1,288 1,372 1,262
Sales and Rentals 647 1,015 1,193 1,068
Other Fees and Licences 717 715 776 820
Net Reduction of Power Purchase Contract Liability 348 339 317 263
Royalties 228 145 200 203
Miscellaneous Other Non-Tax Revenue3 1,305 1,342 1,741 894
  8,047 7,904 8,457 7,609
Total Revenue 96,313 107,175 109,773 113,019
1 Sales 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.
2 Education Property Tax revenue is net of the property tax credit component of the Ontario Energy and Property Tax Credit and the Ontario Senior Homeowners' Property Tax Grant.
3 Miscellaneous Other Non-Tax Revenue in 2011–12 is higher than other years due to one-time revenues including Chrysler's repayment of an Ontario loan and higher-than-usual recoveries of prior-year expenditures from government ministries.
Note: Numbers may not add due to rounding.
TABLE 3.9 Total Expense
($ Millions)
Ministry Expense 2009–10 2010–11 Actual
2011–12
Current
Outlook
2012–13
Aboriginal Affairs1 67 65 68 68.9
Agriculture, Food and Rural Affairs1 1,265 888 1,029 1,161.5
Attorney General2 1,606 1,589 1,699 1,730.6
Board of Internal Economy3 187 194 271 197.4
Children and Youth Services 3,590 3,883 3,949 4,087.4
Citizenship and Immigration1 101 106 111 119.9
Community and Social Services 8,411 8,933 9,361 9,791.1
Community Safety and Correctional Services2 2,137 2,218 2,174 2,313.4
Consumer Services 17 18 19 20.4
Economic Development and Innovation1 796 867 961 954.6
Education1 21,184 21,857 22,925 23,890.9
Energy1 469 724 498 362.1
Environment1 375 520 537 484.8
Executive Offices 34 32 31 31.4
Finance1 1,492 1,115 1,022 1,102.1
Francophone Affairs, Office of 5 5 5 5.1
Government Services1 929 973 1,051 1,005.1
Health and Long-Term Care 43,054 44,414 46,476 48,329.5
Infrastructure1,2 133 305 331 240.7
Labour1 179 187 185 191.5
Municipal Affairs and Housing1 874 885 828 819.4
Natural Resources1 685 705 699 686.6
Northern Development and Mines 534 706 729 771.1
Tourism, Culture and Sport1 950 1,086 1,181 1,108.0
Training, Colleges and Universities1 6,634 6,711 7,128 7,521.5
Transportation1 2,092 2,263 2,339 2,587.7
Interest on Debt4 8,719 9,480 10,082 10,601.0
Other Expense1 9,056 10,457 7,053 6,970.5
Year-End Savings5 (765)
Total Expense 115,575 121,186 122,742 126,389.1
1 Details on other ministry expense can be found in Table 3.10, Other Expense.
2 Reflects a realignment of expenditures associated with the government real estate portfolio.
3 The 2011–12 actuals include expenses for the 2011 general election.
4 Interest on debt is net of interest capitalized during construction of tangible capital assets of $234 million in 2011–12 and $248 million in 2012–13.
5 As in past years, the Year-End Savings provision reflects anticipated underspending that has historically arisen at year-end due to factors such as program efficiencies and changes in project start-ups and implementation plans.
Note: Numbers may not add due to rounding.
TABLE 3.10 Other Expense
($ Millions)
Ministry Expense 2009–10 2010–11 Actual
2011–12
Current
Outlook
2012–13
Aboriginal Affairs        
One-Time Investments – Settlements 6 28
Agriculture, Food and Rural Affairs        
Time-Limited Investments in Infrastructure 618 1,496 247
Time-Limited Assistance 27 9
Citizenship and Immigration        
Time-Limited Investments to Support Pan/Parapan Am Games 3 16 59 319.6
Economic Development and Innovation        
One-Time Investments 5
Education        
Teachers' Pension Plan1 255 522 523 850.0
Energy        
Ontario Clean Energy Benefit 300 1,033 1,070.0
Environment        
One-Time Investments 37
Finance        
Harmonized Sales Tax Transitional Support 3,039 1,440
One-Time Automotive Sector Support2 3,022
Ontario Municipal Partnership Fund 781 684 598 592.2
Operating Contingency Fund 312.0
Pension Benefit Guarantee Fund 500
Power Supply Contract Costs 1,409 1,288 1,375 1,262.0
Transition Fund 50.0
Government Services        
Pension and Other Employee Future Benefits 949 1,182 1,300 1,545.0
Infrastructure        
Capital Contingency Fund 100.0
Labour        
Prevention Office 108.8
Municipal Affairs and Housing        
Time-Limited Investments in Social and Affordable Housing 585 668 59 155.2
Time-Limited Assistance 21 9 19.0
Natural Resources        
Emergency Forest Firefighting 68 100 209 136.7
Tourism, Culture and Sport        
Time-Limited Investments – Sport Program 48 288 37
One-Time Investments 22 3
Training, Colleges and Universities        
Time-Limited Investments 559 816 133
Transportation        
One-Time Transit and Infrastructure Investments 190
Total Other Expense 9,056 10,457 7,053 6,970.5
1 Numbers reflect PSAB pension expense. Ontario's matching contributions to the plan grow from $1,245 million in 2009–10 to $1,459 million in 2012–13.
2 Reflects the fiscal impact of Ontario's $4.6 billion in support to the automotive industry.
Note: Numbers may not add due to rounding.
TABLE 3.11 2012–13 Infrastructure Expenditures
($ Millions)
Sector Total
Infrastructure
Expenditures
2011–12
Actual
2012–13 Current Outlook
Investment
in Capital
Assets1
Transfers
and Other
Infrastructure
Expenditures2
Total
Infrastructure
Expenditures
Transportation        
Transit 2,300 2,121 422 2,543
Provincial Highways 1,746 2,398 2,398
Other Transportation3 708 681 131 812
Health        
Hospitals 2,787 2,798 127 2,925
Other Health 256 159 163 322
Education4 1,717 2,017 72 2,089
Postsecondary        
Colleges 457 204 204
Universities 194 112 112
Water/Environment 211 44 155 199
Municipal and Local Infrastructure 794 32 659 691
Justice 852 726 85 811
Other 663 506 287 792
Subtotal 12,684 11,685 2,212 13,897
Less: Other Partner Funding5 1,268 1,018 1,018
Total Excluding Partner Funding 11,417 10,667 2,212 12,879
Less: Other Capital Contributions6 438 160 175 335
Total Provincial Expenditure7 10,979 10,507 2,037 12,544
1 Investment in Capital Assets includes interest capitalized during construction of tangible capital assets of $248 million.
2 Mainly consists of transfers for capital purposes to municipalities and universities, and expenditures for capital repairs.
3 Other Transportation includes highway planning activities, property acquisition, highway service centres and other infrastructure programs (e.g., municipal/ local roads, remote airports).
4 Includes a one-time adjustment of $248 million in 2011–12 related to last year's capital grants that is fully offset by revenue recovery from the school board sector.
5 Third-party contributions to capital investment in consolidated schools, colleges, hospitals and provincial agencies.
6 Mostly federal government transfers for capital investments.
7 Total Provincial Infrastructure Expenditure includes Investment in Capital Assets of $9.5 billion for 2011–12.
Note: Numbers may not add due to rounding.
TABLE 3.12 Ten-Year Review of Selected Financial and Economic Statistics1
($ Millions)
  2003–04 2004–05 2005–062
Financial Transactions      
Revenue 74,549 84,192 90,738
Expense      
Programs 70,428 76,379 81,421
Interest on Debt4 9,604 9,368 9,019
Total Expense 80,032 85,747 90,440
Reserve
Surplus/(Deficit) (5,483) (1,555) 298
Net Debt5 138,816 140,921 152,702
Accumulated Deficit 124,188 125,743 109,155
Gross Domestic Product (GDP) at Market Prices 493,081 516,106 537,383
Personal Income 381,127 400,994 419,457
Population — July (000s) 12,242 12,391 12,528
Net Debt per Capita (dollars) 11,339 11,373 12,188
Personal Income per Capita (dollars) 31,132 32,363 33,480
Interest on Debt as a per cent of Revenue 12.9 11.1 9.9
Net Debt as a per cent of GDP 28.2 27.3 28.4
Accumulated Deficit as a per cent of GDP 25.2 24.4 20.3
1 Revenue 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, a fiscally neutral accounting change related to the reclassification of government agencies and organizations as described in the 2011 Ontario Economic Outlook and Fiscal Review, and a fiscally neutral reclassification of a number of tax expenditures as described in the 2012 Budget.
2 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.
3 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.
4 Interest on Debt is net of interest capitalized during construction of tangible capital assets of $148 million in 2009–10, $203 million in 2010–11, $234 million in 2011–12, and $248 million in 2012–13.
5 Starting in 2009–10, Net Debt includes the net debt of hospitals, school boards and colleges consistent with Public Sector Accounting Board standards. For comparative purposes, Net Debt has been restated from 2005–06 to 2008–09 to conform with this revised presentation. Net Debt has also been restated from 2003–04 to 2005–06 to reflect the value of hydro corridor lands transferred to the Province from Hydro One Inc.
Sources: Ontario Ministry of Finance and Statistics Canada.
TABLE 3.12 Ten-Year Review of Selected Financial and Economic Statistics1 (continued from above)
($ Millions)
2006–07 2007–08 2008–09 2009–103 2010–11 Actual
2011–12
Current
Outlook
2012–13
97,120 104,115 97,532 96,313 107,175 109,773 113,019
86,020 94,601 95,375 106,856 111,706 112,660 115,788
8,831 8,914 8,566 8,719 9,480 10,082 10,601
94,851 103,515 103,941 115,575 121,186 122,742 126,389
1,000
2,269 600 (6,409) (19,262) (14,011) (12,969) (14,371)
153,742 156,616 169,585 193,589 214,511 235,582 257,627
106,776 105,617 113,238 130,957 144,573 158,410 172,781
560,576 583,946 587,055 581,635 612,494 638,842 659,288
442,736 466,051 479,217 480,061 500,048 515,336 529,348
12,665 12,791 12,932 13,069 13,224 13,366 13,506
12,139 12,244 13,113 14,813 16,222 17,625 19,075
34,956 36,430 37,050 36,722 37,803 38,536 39,116
9.1 8.6 8.8 9.1 8.8 9.2 9.4
27.4 26.8 28.9 33.3 35.0 36.9 39.1
19.0 18.1 19.3 22.5 23.6 24.8 26.2
Composition of Revenue, 2012–13
Composition of Total Expense, 2012–13
Composition of Program Expense, 2012–13