2012 Ontario Budget: Chapter II: Ontario's Economic Outlook and Fiscal Plan
Section F: 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. It continues to make progress on further strengthening its accountability to the public, improving transparency in reporting on the use of taxpayers’ money, and ensuring that funds are managed effectively.


Ontario has been working to ensure measures ministries use in exercising agency oversight are effective and up to date. In 2010, Ontario updated and clarified its policy guiding agency establishment and accountability. The government will be expanding its existing financial assurance and certification process for its agencies, supported by audit reviews, to ensure effective controls and financial risk management are in place.

The government is also taking action to ensure complete reporting and disclosure of salaries as required under the Public Sector Salary Disclosure Act, 1996, by introducing amendments that, if approved, would allow the government to audit organizations in cases where information required by the act has not been provided.


The government will be adopting a new Public Sector Accounting Board (PSAB) accounting standard on government transfers effective April 2012. This new standard is consistent with the government’s existing reporting practice. In preparation for adopting this standard, the government approved a regulation in August 2011 to ensure its consolidated organizations will also report consistent with the new PSAB standard.

In 2011, the government approved a regulation directing Hydro One to adopt U.S. accounting standards for its financial reports effective January 2012. This was necessary to address rate-regulated accounting requirements missing as a result of PSAB’s adoption of International Financial Reporting Standards (IFRS) for government business enterprises. The U.S. accounting standards continue to provide for rate-regulated accounting. A similar requirement will be implemented for Ontario Power Generation (OPG) to allow it to continue reporting its rate-regulated activities on the same basis. The Ontario Securities Commission has allowed both electricity utilities to report using U.S. accounting standards until the rate-regulated accounting requirements have been resolved under IFRS.

The government will also introduce an amendment to the Financial Administration Act that, if approved, would enable Treasury Board to establish accounting policies for the purpose of preparing the Province’s consolidated financial reports.

The 2011 Budget noted the government’s plan to increase the transparency of its asset management and financial reporting model for its real estate portfolio. For 2012–13, the government is enhancing identification of investments on new building construction within each responsible ministry’s appropriations. This will contribute to clear accountability for the management of those assets.

Transparency in Tax Expenditure Reporting

Starting in the 2012 Budget, the presentation of certain tax expenditures is changing. As explained in Chapter IV: Tax and Pension Systems, these changes are being made to provide more transparency and accountability. This is consistent with the new PSAB accounting standard for tax revenue, effective April 2012. Tax expenditures that provide a financial benefit through the tax system, and are not related to relief of taxes paid, will be shown as an expense. This change recognizes that such expenditures made through the tax system are, in substance, transfers or grants. It will not affect people or businesses that receive these tax credits and grants. This change does not impact the Province’s surplus or deficit.

The tax expenditures that will be reported as expenses starting in the 2012 Budget are:

  • Children’s Activity Tax Credit;
  • Ontario Apprenticeship Training Tax Credit;
  • Ontario Book Publishing Tax Credit;
  • Ontario Business Research Institute Tax Credit;
  • Ontario Computer Animation and Special Effects Tax Credit;
  • Ontario Co-operative Education Tax Credit;
  • Ontario Film and Television Tax Credit;
  • Ontario Focused Flow-through Share Tax Credit;
  • Ontario Innovation Tax Credit;
  • Ontario Interactive Digital Media Tax Credit;
  • Ontario Political Contribution Tax Credit;
  • Ontario Production Services Tax Credit; and
  • Ontario Sound Recording Tax Credit.

One tax expenditure will change from an expense and will be netted against related tax revenue starting in the 2012 Budget:

  • Ontario Senior Homeowners’ Property Tax Grant.

As a result of this change, both revenue and expense are increasing by identical amounts. To facilitate comparisons, the Province’s historical revenue and expense have been restated using the new presentation. The table below summarizes the impact by ministry.

TABLE 2.25. Impact of Change in Presentation of Tax Expenditures
($ Millions)
  2009–10 Actual
   Personal Income Tax 28 87 114.9 113.6
   Corporations Tax 612 684 682.6 677.8
   Education Property Tax (120) (254) (216.9) (223.1)
Total Revenue 520 517 580.6 568.3
   Attorney General 6 8 11.9 6.8
   Children and Youth Services 8 55 79.9 85.9
   Economic Development and Innovation 240 250 255.2 255.3
   Energy 24 29.4 39.2
   Finance (129) (281) (314.9) (398.2)
   Health and Long-Term Care 60.0 125.0
   Northern Development and Mines 10 11 11.5 11.5
   Tourism, Culture and Sport 229 239 230.2 226.2
   Training, Colleges and Universities 156 210 217.5 216.6
Total Expense 520 517 580.6 568.3
Impact on Surplus/(Deficit)

Note: Numbers may not add due to rounding.

Financial Management

The government will introduce the proposed Interim Appropriation for 2012–13 Act, 2012. If approved by the legislature, this would provide the interim legal spending authority for anticipated 2012–13 spending, pending finalization of the 2012–13 Supply process.

The government will propose amendments to the Financial Administration Act that, if approved, would facilitate the Province’s continued participation in international financial markets for borrowing and investment, by authorizing the government to participate in centralized international financial clearinghouse arrangements.