2011 Ontario Budget: Chapter II: Ontario's Economic Outlook and Fiscal Plan
Section G: Accountability, Transparency and Financial Management


The government is accountable to the public for the appropriate use of taxpayer dollars and for clearly communicating the objectives and results of how those dollars are spent. The Province has introduced a number of initiatives to strengthen its accountability to the public, improve transparency in reporting on the use of taxpayers’ money, and ensure that funds are managed effectively.

Strengthening Accountability of Organizations

As part of its role, the government needs to ensure that publicly funded organizations are accountable for the prudent use of taxpayers’ money. Through new and strengthened legislation and public reporting tools, the government is committed to ensuring the accountability of these organizations.

Enhancing Accountability in the Broader Public Sector

The government continues to take significant steps to protect the interests of taxpayers and strengthen the accountability of organizations that receive public funding.

The new Broader Public Sector Accountability Act, 2010 (www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_10b25_e.htm), which received Royal Assent on December 8, 2010, establishes greater financial accountability for larger broader public-sector organizations, including hospitals, school boards, colleges, universities, children’s aid societies, community care access centres and other publicly funded organizations that receive $10 million or more in government funding.

The Act bans the use of public funds to hire external lobbyists, expands freedom-of-information legislation to cover hospitals, and requires hospitals and Local Health Integration Networks to report and post expenses of senior executives. The Act also establishes new rules for procurement and expenses for designated broader public-sector organizations.

The government will introduce amendments to the Broader Public Sector Accountability Act, 2010 this spring. The amendments, if passed, would ensure that any unnecessary perks would be eliminated in broader public-sector organizations. The government has also introduced new rules for ministries and agencies that will ensure perks are not provided.

Improving Accountability for Travel-Related Expenses

The government has strengthened accountability by making specified travel, meal and hospitality claims information available to the public on www.ontario.ca, the government’s website.

Travel-related expense information for senior government managers, cabinet ministers, parliamentary assistants and their staff continues to be posted by the government on the website. This website also features links to the websites of the 22 government agencies and organizations prescribed under the Public Sector Expenses Review Act, 2009.

Transparency in Reporting on the Use of Public Money

Transparency in public-sector reporting is vital to help taxpayers and users of financial information assess how public money is used. Consistent reporting, improved asset management and the Pre-Election Report provide key tools to help better understand the use of and value obtained with taxpayers’ money.

Developments in Public-Sector Accounting Standards

Public-sector accounting standards establish how the financial activities of governments and public-sector organizations are measured, recorded and reported to the public. They are an essential building block for effective government decision-making, budgeting and transparent reporting of financial information.

Over the past year, the Public Sector Accounting Board (PSAB) has issued a number of proposed changes to government financial reporting, including accounting for government transfers, financial instruments and foreign exchange. In response to issues raised through a federal–provincial Joint Working Group of senior government and accounting standards officials, PSAB has also initiated a review of its Conceptual Framework, which underlies the Board’s development of all public-sector accounting standards in Canada. The PSAB acknowledges that it is giving this project the highest priority.

Ontario expects that PSAB will incorporate the results of the Conceptual Framework review into its recent proposals and existing accounting standards to ensure the transparency and quality of public-sector financial reporting. The government will continue to work with PSAB and other stakeholder groups to ensure that accounting standards established for governments in Canada serve the best interests of Ontario’s taxpayers.

Consistency in Accounting Standards for the Public Sector

Consistency in accounting standards is important as it provides more relevant and understandable information on the finances of public-sector organizations delivering publicly funded services.

Late in 2010, PSAB approved the inclusion of accounting standards applicable to public-sector not-for-profit organizations in the Public Sector Accounting (PSA) Handbook. As well, effective in 2011, the Accounting Standards Board replaced current accounting standards for commercial enterprises with International Financial Reporting Standards and Accounting Standards for Private Enterprises. As a result of these two significant changes, public-sector entities must individually reassess their basis of reporting and implement standards that best meet their users’ needs and support sound decision-making. Without guidance and support, however, these changes will increase the risk of inconsistent financial reporting across publicly funded entities.

As a result, the government is collaborating with government ministries and their respective agencies and sectors to ensure that an informed and consistent choice of accounting standards is made to support transparent financial reporting and accountability throughout Ontario’s public sector. The initial phase of this process focused on consolidated public-sector entities. The next step will be to engage public-sector organizations outside the Province’s reporting entity, such as municipalities and universities.

Pre-Election Report on Ontario’s Finances

In December 2004, the McGuinty government passed the Fiscal Transparency and Accountability Act, 2004 (FTAA) to ensure greater transparency and accountability in the government’s fiscal planning and financial reporting. Under the FTAA, the Ministry of Finance must release a Pre-Election Report on Ontario’s Finances in advance of a provincial election.

The purpose of the Pre-Election Report is to give citizens a clear understanding of the Province’s estimated future revenues and expenses, and other details of the fiscal plan, before the upcoming provincial election, including:

  • the macroeconomic forecasts and assumptions used to prepare the fiscal plan;
  • an estimate of Ontario’s revenues and expenses, including estimates of the major components of the revenues and expenses set out in the plan;
  • details of the reserve; and
  • the ratio of provincial debt to Ontario’s gross domestic product.

Under the FTAA, the Auditor General will promptly review the Pre-Election Report to determine whether it is reasonable and release a statement on the results of the review.

Improving Reporting on Capital Assets

The government has made steady progress to improve the reporting of tangible capital assets, resulting in greater transparency and opportunities for improved asset management. Major assets have been reported in Printed Estimates from 2003 and a number of other asset classes (including vehicles, aircraft, marine craft, information technology systems and hardware) added from 2009. The government will implement additional measures to further enhance the financial reporting model for its real estate portfolio and improve transparency in the management of government assets.

Efficient Use of Public Money

Prudent management of public money is critical to ensure results are achieved and taxpayers obtain value for their tax dollars. Effective financial management enhances efficiency in the use of public money and helps to manage demands for debt financing and associated borrowing costs.

Financial Management of Stimulus Programs

In the 2009 Budget, the government announced a two-year investment in capital infrastructure to help stimulate the economy and create jobs across Ontario. For many of the projects funded under the stimulus programs, Ontario, the federal government and the project proponents, including municipalities, each contributed one-third of the costs. For investments in social housing, Ontario and the federal government split the cost equally. The Ontario government has applied strong control measures to ensure that funds are spent for the intended purpose and that the expected results are achieved.

In 2010, the Auditor General of Ontario conducted a value-for-money audit that focused on the structure and implementation of three programs. The audit looked at whether adequate systems and procedures were in place to ensure timely distribution and prudent administration of the funds, and measured and reported on the effectiveness of these programs. The audit was done as the programs were being implemented. The government has already taken steps and made changes to the programs based on the Auditor General’s work and recommendations. The Auditor General’s report noted that “the responsible ministries devoted significant efforts to establish the appropriate systems and process, and to adhere to the Province’s Transfer Payment Accountability Directive on program eligibility, reporting and other accountability requirements.”1

The government has made timely monitoring and reporting essential elements of the stimulus programs. Since November 2009, Ontarians have been able to track the progress of projects in their communities and across the province on the Revitalizing Ontario’s Infrastructure website at www.ontario.ca/infrastructure. The website shows up-to-date progress for each stimulus project. In December 2010, the Ministry of Infrastructure launched an enhanced version of the website with new features and additional information.

Ontario and the federal government have announced an extension of the stimulus funding deadline from March 31, 2011 to October 31, 2011 for qualifying projects. The government will continue to maintain strong controls to ensure program objectives are achieved and funds are spent wisely.

Effective Management of Debt

The government borrows money to build new infrastructure, such as roads, hospitals and schools, and to fund annual operating deficits. Increased debt leads to increased borrowing costs, which squeezes the overall amount of funding available for future health care, education and social programs. Accordingly, it is important to manage the levels and cost of government borrowing.

To ensure the sustainability of its financial plan, the government continues to carefully choose its infrastructure investment priorities and maintain the appropriate balance between investments that provide economic stimulus and create the jobs and infrastructure necessary to underpin Ontario’s future economic growth, and the level of increased debt. By carefully managing the rate of investments, the Province will reduce pressure on its borrowing needs. This approach will lower the rate of debt growth and associated borrowing costs.

Other Requirements

The government will introduce the proposed Supplementary Interim Appropriation for 2011–12 Act, 2011 to supplement the Interim Appropriation for 2011–12 Act, 2010. If approved by the legislature, this will provide the balance of interim legal spending authority for anticipated 2011–12 spending, pending finalization of the 2011–12 voting of Supply process.

1 Office of the Auditor General of Ontario, 2010 Annual Report, p. 179.