Ministry of Finance Public Accounts of Ontario 2013-2014

Annual Report
Consolidated Financial

To The Honourable
David C. Onley

Lieutenant Governor of Ontario

 May It Please Your Honour:

The undersigned have the honour to present the Public Accounts of the Province of Ontario for the fiscal year ended March 31, 2014, in accordance with the requirements of the Financial Administration Act.

Respectfully submitted,

Originally signed by:
The Honourable Charles Sousa

Minister of Finance

Toronto, September 2014

Originally signed by:
The Honourable Deb Matthews

Deputy Premier

President of the Treasury Board

Toronto, September 2014





Guide to the Public Accounts

Annual Report

Supporting Volumes

Statement of Responsibility

Financial Statement Discussion and Analysis


Analysis of 2013–14 results


Investments in services, programs and infrastructure

Borrowing and financial position

Indicators of financial condition

Balancing the budget

Accountability and transparency in financial management and reporting

Environmental liabilities

Dedicated revenue reporting

Classified agencies

Performing while transforming

Health care



Comparison of interim to actual results

Consolidated Financial Statements


I am pleased to present the Province of Ontario’s Public Accounts for the year 2013–14.

Our government is focused on building Ontario up by making the necessary strategic investments in economic growth and job creation, while remaining committed to eliminating the deficit by 2017–18. This year, the deficit is $10.5 billion — $1.3 billion lower than projected in the 2013 Budget, and $0.8 billion lower than the interim projection in the 2014 Budget.

This marks the fifth year in a row that Ontario has beaten the deficit target — making us one of the only governments in Canada to achieve this level of success. As a result, Ontario’s accumulated deficit is $25 billion lower than it otherwise would have been.

We will continue to build on our track record by moving forward with our plan for Building Opportunity and Securing Our Future. That plan is dedicated to investing in our people, building modern infrastructure, and supporting a dynamic and innovative business climate. Our plan is a 10-year economic strategy that will see Ontario move forward in the new global economy and ensure long-term prosperity.

Ontario’s skilled and diverse workforce is our province’s greatest strength. By building on those strengths, our plan will provide more opportunity, helping everyone to achieve their best. We will invest in education, skills training, and the talents that make Ontario a destination for global investment. Ontario’s education system is recognized as one of the best in the world, and we will continue to make the necessary investments to build on this success. Investing in people and giving Ontarians the support they need to get the right skills and the right job will help develop the economy of tomorrow, today.

We are taking action to ensure that all Ontarians are able to retire with security and dignity. Canadians, particularly those in the middle class, are not saving enough to ensure their standard of living in retirement. Helping to ensure a decent and stable stream of income for future retirees is an economic imperative because people with secure incomes are able to spend more and rely less on government programs. We are introducing the first-of-its-kind Ontario Retirement Pension Plan, and moving forward with several other initiatives to help Ontarians save for retirement, including a new framework for pooled registered pension plans.

We are also committed to building modern infrastructure and transportation networks to help maintain Ontario’s status as one of the best places in the world to live, work and invest. Through the Moving Ontario Forward plan, our investments will help our businesses get their goods to market faster and Ontarians get to work, home or school more quickly. Not only will this be a boost to jobs and economic growth, but it will also build a better quality of life for hardworking families.

To further support our dynamic and innovative business climate, we are building on Ontario’s strong reputation as a hub for global business. We are continuing to improve the competitiveness of Ontario’s tax system, modernizing regulations to enhance business productivity and expanding the province’s trade strategy. In addition, the new $2.5 billion Jobs and Prosperity Fund will improve Ontario’s ability to attract significant business investments.

The government’s 10-year Economic Plan speaks to strategic investments in economic growth and job creation, while remaining focused on achieving our savings targets and limiting program spending growth. Ontario has the lowest per-capita program spending of any province in Canada, while still providing high-quality public services. We continue to modernize service delivery, find efficiencies, and focus on priorities that will help grow our economy and ensure the sustainability of our services.

Going forward, I will be working closely with our new President of the Treasury Board to continue to manage and control expenses. Our plan to reduce our debt and deficit includes new annual program savings targets of $250 million for 2014–15 and $500 million for each of the next two years. Making every dollar count will help us achieve our deficit reduction targets and balance the budget by 2017–18.

Our government is moving forward with our bold new plan to build Ontario up, today and in the decades to come. Ontario is one of the best places in the world to live, work and invest, and our plan will help to ensure that the opportunity and security this province offers are accessible to everyone.


Originally signed by:
The Honourable Charles Sousa
Minister of Finance


This Annual Report presents Ontario’s financial results, activities and position for the year ending March 31, 2014. The Annual Report is a key element of the Public Accounts of the Province of Ontario and is central to illustrating the Province’s transparency and accountability for financial resources.

The Financial Statement Discussion and Analysis in this report compares the Province’s actual financial results for the 2013–14 fiscal year to the Budget plan presented on May 2, 2013, and explains major variances. It also outlines trends in a number of financial indicators over the past several years and reports on results achieved in key programs. By providing this information, the Annual Report helps users of the financial statements to understand the impact of economic conditions and other factors on government finances for the year and over time. This information supports the government’s commitment to accountability and transparency in financial reporting.

Producing the Public Accounts of Ontario, including the three supplementary volumes and this Annual Report, requires teamwork and collaboration on the part of many staff members across the provincial government and Ontario’s public sector. In addition, the Office of the Auditor General plays a critical role in auditing and reporting on the Province’s financial statements. I would like to thank everyone who was involved in preparing the 2013–14 Public Accounts for their essential and valuable contributions.

We welcome your comments on the Public Accounts. Please share your thoughts by email at, or by writing to the Office of the Provincial Controller, Re: Annual Report, Treasury Board Secretariat, Second Floor, Frost Building South, 7 Queen’s Park Crescent, Toronto, Ontario M7A 1Y7.

Originally signed by:
Murray Lindo, CPA, CMA
Assistant Deputy Minister and Provincial Controller
Treasury Board Secretariat


The Public Accounts of the Province of Ontario comprise this Annual Report and three supporting volumes.

Annual Report

The Annual Report includes a Financial Statement Discussion and Analysis section that looks at the Province’s financial results, indicators of financial condition, results achieved and other information. It also contains the Consolidated Financial Statements, which are made up of several documents and schedules:

  • The Auditor General’s Report expresses the opinion of the Auditor General as to whether the statements fairly report the activities of the government in accordance with Canadian public sector accounting standards.
  • The Consolidated Statement of Operations shows government revenue against the cost of providing programs and services and financing debt. The difference is the annual surplus or deficit. The statement provides a comparison to the Budget plan presented on May 2, 2013, and to results for the previous year.
  • The Consolidated Statement of Financial Position shows the assets of the Province, which are classified as financial or non-financial, against its obligations. The Province’s net debt consists of its total obligations less its financial assets. The Province’s accumulated deficit is its net debt less the value of its non-financial assets.
  • The Consolidated Statement of Change in Net Debt shows the impact of financing the annual deficit and investing in capital assets. As well, this statement reflects the annual change in the fair value of the Ontario Nuclear Funds Agreement (ONFA) investments.
  • The Consolidated Statement of Change in Accumulated Deficit shows the impact of the annual deficit and unrealized gains and losses due to changes in the fair value of the ONFA investments.
  • The Consolidated Statement of Cash Flow shows the sources and uses of cash over the period. Sources of cash include taxation and other revenue, increases in debt and decreases in financial investments, while uses of cash include operating expenses, investments in infrastructure and other assets. The Statement shows the impact of all these activities on the Province’s holdings of cash and cash equivalents over the year.
  • Notes and schedules provide further information on the items in the various statements and form an integral part of the Consolidated Financial Statements. The notes also include a summary of the significant accounting policies that form the basis on which the Province’s financial statements are prepared, as well as any upcoming changes to accounting standards.

Supporting Volumes

Volume 1 contains ministry statements and detailed schedules of debt and other items. The ministry statements, which are presented on the accrual basis of accounting, compare the amounts that were appropriated by the Legislative Assembly to actual expenses incurred. The ministry statements include amounts appropriated to fund some provincial organizations, including hospitals, school boards and colleges. The results of all provincial organizations in the government reporting entity are consolidated with those of the Province to produce the Consolidated Financial Statements, following the methodology described in Note 1 to the statements.

Volume 2 contains the individual financial statements of significant provincial corporations, boards and commissions that are part of the government’s reporting entity, and other miscellaneous financial statements.

Volume 3 contains detailed schedules of ministry payments.


The Consolidated Financial Statements and Financial Statement Discussion and Analysis are prepared by the Government of Ontario in compliance with legislation and in accordance with the accounting principles for governments recommended by the Public Sector Accounting Board (PSAB) of Chartered Professional Accountants of Canada (CPA Canada) and, where applicable, the recommendations of the Accounting Standards Board (AcSB) of CPA Canada.

The government accepts responsibility for the objectivity and integrity of these Consolidated Financial Statements and the Financial Statement Discussion and Analysis.

The government is also responsible for maintaining systems of financial management and internal control to provide reasonable assurance that transactions recorded in the Consolidated Financial Statements are within statutory authority, assets are properly safeguarded, and reliable financial information is available for preparation of these Consolidated Financial Statements.

The Consolidated Financial Statements have been audited by the Auditor General of Ontario and her report appears on page 37 of this document.

Originally signed by:
Kevin French

Originally signed by:
Greg Orencsak

Originally signed by:
Murray Lindo, CPA, CMA

Deputy Minister Ministry of Finance

Deputy Minister and Secretary to Treasury Board and the Management Board of Cabinet

Assistant Deputy Minister and Provincial Controller Treasury Board Secretariat

August 19, 2014

August 19, 2014

August 19, 2014

Financial Statement Discussion and Analysis


Table 1
2013–14 Actual results against 2013 Budget Plan
($ Billions)
Revenue 116.8 115.9 (0.9)
Programs 117.0 115.8 (1.2)
Interest on debt 10.6 10.6 (0.0)
Total Expense 127.6 126.4 (1.2)
Reserve 1.0 (1.0)
Annual Deficit (11.7) (10.5) (1.3)
Note: Budget and related variance numbers may not add due to rounding.

The deficit for the 2013–14 fiscal year was $10.5 billion, an improvement of $1.3 billion from the projection in the 2013 Budget. Although revenue came in $0.9 billion below plan, strong management of expenses and the use of the reserve included in the 2013 Budget to protect against adverse changes in the fiscal plan more than offset this decline. Spending was $1.2 billion below plan. Program spending has been below projections every year since the fall 2009 Ontario Economic Outlook and Fiscal Review.

Ontario’s output grew at the same moderate pace in 2013 as in the previous year, with gross domestic product (GDP) increasing by 1.3 per cent in real terms. This was slightly below the 1.5 per cent growth projected in the 2013 Budget and contributed to slower revenue growth than forecast.

Given the continuing modest expansion in economic activity, the Province continues to manage growth in spending, while making targeted investments to encourage economic growth, to support eliminating the deficit by 2017–18. Program spending grew on average by 1.2 per cent a year between 2010–11 and 2013–14.

To address the ongoing challenges in the global economy, the 2014 Budget outlined a new 10-year plan that aims to continue to help stimulate Ontario’s economy, create jobs, and increase prosperity and fairness. The plan focuses on strategic investments that build on the competitive advantages of Ontario’s people and businesses. This includes significant funding for transportation and public transit, health care and education.

Ontario is building on the progress it has already achieved in these and other areas:

  • Ontario is undertaking a major transformation of the health care system to be more patient-focused and effective, and continues to be a leader in Canada in reduced wait times for five key services as reported by the national Wait Time Alliance.
  • Ontario’s publicly funded education system is recognized as one of the best in the world. The province’s students consistently score above the Canadian average in math, reading and science, and rank among the best in the world on such assessments as the Programme for International Student Assessment.
  • Infrastructure investments of nearly $100 billion since 2003 focusing on health care, education and transportation have made Ontario a safer, more competitive and more productive province, while supporting an average of 100,000 jobs in construction and related industries.


Table 2
Details of 2013–14 Actual results against Budget Plan1
($ Billions)
Taxation 82.0 80.0 (2.0)
Government of Canada 22.5 22.3 (0.2)
Income from government business enterprises 4.5 5.3 0.9
Other non-tax revenue 7.9 8.3 0.4
Total Revenue 116.8 115.9 (0.9)
Health sector 48.9 48.9 0.1
Education sector 3 24.2 23.6 (0.6)
Postsecondary and training sector 7.7 7.6 (0.2)
Children's and social services sector 14.3 14.1 (0.3)
Justice sector 4.1 4.2 0.1
Other programs 17.8 17.4 (0.3)
Total Program Expense 117.0 115.8 (1.2)
Interest on debt 10.6 10.6 (0.0)
Total Expense 127.6 126.4 (1.2)
Reserve 1.0 (1.0)
Annual Deficit (11.7) (10.5) (1.3)
1 Budget and related variance numbers may not add due to rounding.
2 2013 Budget figures have been restated to reflect restructuring during the year.
3 Teachers' Pension Plan expense is included in "Other programs." In the Consolidated Financial Statements, this expense item appears under the Ministry of Education. Schedule 3 to the financial statements provides details.


Total revenue in 2013–14 was $0.9 billion lower than the 2013 Budget forecast, reflecting lower estimates of taxation revenue for previous years, slower-than-projected economic growth and a decline in federal transfer payments in 2013–14. Higher-than-forecast income from government business enterprises and higher other non-tax revenue, including the sale of shares of General Motors Company, partially offset these declines.

Sales tax revenue was $1,375 million lower than forecast. The variance arises largely from a $1.1 billion downward revision to the estimate of Ontario’s 2012 Harmonized Sales Tax (HST) entitlement. The revision, which was provided by the federal government in December 2013, has a one-time impact because it relates to a prior, closed year. The remaining variance is largely due to lower-than-expected economic growth that reduced Ontario’s 2013 and 2014 HST entitlement estimates.

Personal income tax revenue for 2013 was $649 million lower than projected in the 2013 Budget. An estimated $300 million of this decrease reflects a one-time adjustment to prior years’ results. The remaining variance is due to lower-than-expected growth in labour compensation in 2013 and lower tax revenue yield from this growth.

Corporations tax revenue was $154 million higher than expected. This was because the latest federal estimates of Ontario’s 2013 and 2014 entitlement, which form the basis of the Province’s reporting, were higher than projected in the 2013 Budget. This gain was partially offset by downward revenue adjustments for prior years.

Land transfer tax revenue was $232 million higher than forecast, reflecting continued strength in the Ontario housing market. Payments made by electricity sector entities in lieu of taxes (PILs) were $177 million higher than projected, as a result of the better-than-expected incomes of Ontario Power Generation Inc. (OPG) and Hydro One Inc.

Education property tax showed a shortfall of $237 million for a number of reasons, including property assessment appeals, business vacancy rebates and an adjustment for prior years’ property tax grants. Ontario health premium revenue for 2014 was $98 million below projection. About $20 million is related to a lower 2013 tax revenue base, and the rest is a one-time adjustment for prior years.

All other tax revenues combined were lower than forecast by $213 million, owing largely to slower-than-expected economic growth.

Provincial taxation revenue is closely tied to Ontario’s economic performance. The economy continues to recover at a modest pace from the deep global recession that began in 2008. In 2013, the province’s real GDP grew by 1.3 per cent, matching the gain in 2012 but slightly below the 2013 Budget forecast of 1.5 per cent.

Real consumer spending grew by 1.8 per cent, accelerating from a 1.4 per cent gain in 2012. Improving economic conditions in the United States, Ontario’s largest trading partner, as well as a drop in the value of the Canadian dollar, helped to boost real exports by 0.9 per cent. At the same time, real imports declined 0.7 per cent, making net trade a significant contributor to overall growth in 2013.

Real GDP edged up by 0.1 per cent in the first quarter of 2014, down from a 0.5 per cent gain in the fourth quarter of 2013, as unusually harsh winter weather slowed economic activity in Ontario and much of the rest of North America.

By the end of the first quarter of 2014, Ontario’s real GDP had increased by 10.4 per cent from the recessionary low and was 5.2 per cent above its pre-recession peak. The recovery has been supported by household spending and residential construction, as well as government investment in infrastructure and business investment in plant and equipment.

Although moderate, the sustained growth of Ontario’s economy has supported continued gains in employment. In 2013, Ontario employment increased by 95,700 new jobs, building on a gain of 52,400 in 2012. Last year, 64.7 per cent of jobs gained were full-time positions and 68.2 per cent were in the private sector. Since the recession, the pace of job creation in Ontario has been stronger than in most developed economies, including the United States and the average of countries in the Organisation for Economic Co-operation and Development (OECD).

Despite these positives, Ontario is not immune to global conditions. Worldwide, the economic environment continues to face risks to growth, including financial-market vulnerabilities. The Province is continuing to take measures to build a competitive, resilient and diverse economy. This includes supporting entrepreneurs, creating a skilled and flexible workforce, and investing in key strategic sectors.

Government of Canada transfers under the Canada Health Transfer and Canada Social Transfer programs were $165 million lower than forecast, owing mainly to revisions by Statistics Canada to historic population estimates that reduced Ontario’s share of the Canadian population. The 2013–14 change also includes one-time adjustments for prior years.

All other Government of Canada transfers were $33 million below the 2013 Budget forecast, owing mainly to lower transfers to consolidated government agencies and revised timelines for capital projects. These reductions are largely offset by corresponding lower spending.

Overall, income from government business enterprises was $858 million above plan due to higher revenue from OPG and Hydro One Inc., including gains realized on the investments that OPG maintains under the Ontario Nuclear Funds Agreement and lower-than-expected OPG operating costs. Net income was in line with projections for the Ontario Lottery and Gaming Corporation and the Liquor Control Board of Ontario.

Other non-tax revenue was $415 million higher than expected, largely reflecting a $249 million gain on the sale of the Province’s interest in 10 million shares of General Motors Company, announced on September 10, 2013; higher recoveries from power supply contracts, which are fully offset by power supply contract costs; and higher sales and rental revenue from consolidated government agencies.

Investments in services, programs and infrastructure

At $126.4 billion, total expense in 2013–14 was $1.2 billion lower than the 2013 Budget forecast, largely reflecting the government’s ongoing focus on managing expenses. This included, among other actions, a freeze on all non-essential spending for the final quarter of the fiscal year that was recommended by an in-year expenditure review. The savings in total expense came largely from programs as actual interest on debt expense, at $10.6 billion, was essentially the same as budgeted.

Program spending was $115.8 billion, an increase of 3.2 per cent from the previous year, due in part to investments that began with the 2013 Budget, including funding for the Youth Jobs Strategy and for transforming social assistance. The year-over-year increase also reflected one-time savings of $1.3 billion in 2012–13 in the education sector from reducing liabilities carried by school boards for sick-day banking and retirement gratuities. Without this one-time saving, growth in spending between 2012–13 and 2013–14 would have been 2.0 per cent.

Roughly two-thirds of ministries spent below their total allocation. This contributed to exceeding the $1.0 billion year-end savings target included in the 2013 Budget.

  • Spending in the health sector was very close to budget, with final results up by $71 million, or 0.1 per cent, from the planned $48.9 billion. The slight increase was in part owing to lower-than-projected hospital sector surplus resulting from the Hamilton Health Sciences Corporation transferring internally restricted monies provided by third parties to Hamilton Health Sciences Research Institute, as well as increases in OHIP. These increases were partially offset by savings in various clinical education programs and the Healthy Homes Renovation Tax Credit program, lower prices negotiated by the government for generic drugs, and efficiencies in Canadian Blood Services operations.
  • Education sector expense was $603 million below plan, owing mainly to lower-than-expected school board expense and savings in ministry administration. School board expense was less than forecast due primarily to slower student enrolment growth, boards’ measures to balance budgets, and lower-than-projected salary and benefits costs. Ministry efficiencies were realized through lower information technology costs and improved management of staff vacancies.
  • In the postsecondary and training sector, expense was $157 million below plan, due mainly to lower demand than forecast for employment and training programs because job opportunities improved, and for student financial assistance.
  • The improvement in job opportunities also resulted in savings of $252 million in the children’s and social services sector, with take-up of Ontario Works and low-income benefits, such as the Ontario Child Benefit, lower than expected. In addition, lower prices that the government negotiated for several generic drugs resulted in lower spending by the Ontario Drug Benefit program, which covers the prescription drug costs of social assistance recipients.
  • Justice sector expense was about $88 million higher than expected, mainly as a result of settlement agreements to provide compensation to the former residents of the Huronia, Rideau and Southwestern Regional Centres, compensation funding for victims of an international investment fraud case — fully offset from revenue recovered through Ontario’s civil forfeiture law — and the decision to keep the Sarnia Jail facility open following an evaluation of operational needs.

Among all other programs, spending was $338 million below plan. Compensation savings were achieved through measures to align public-service retiree benefits with those in the private sector and other jurisdictions. Pension expense was also lower than planned by managing compensation costs in the last round of collective agreements, a lower-than-projected increase in active members, and continued improvement in investment returns and market performance since 2010.

The decrease also reflects a number of constraint measures and savings initiatives across ministries, as well as lower-than-expected demand for some programs. For example, spending in the Ministry of Agriculture and Food was lower than planned by $157 million, owing to fewer claims than expected being filed in agricultural business risk management programs and lower-than-expected municipal infrastructure project costs.

Against these savings, expense in the Ministry of Municipal Affairs and Housing was $257 million higher than expected, largely as a result of $190 million committed in financial assistance to municipalities and conservation authorities affected by a massive ice storm in December 2013. As well, spending was $188 million above plan in the Ministry of Tourism, Culture and Sport, owing largely to an updated estimate of expense related to media tax credits.

A decrease of $33 million in interest on debt expense from plan reflected mainly a lower-than-forecast cost of borrowing relative to Canada and cost-effective debt management.

Table 3
Infrastructure expenditures, 2013–14 1
($ Billions)
Sector Investment in Capital Assets 2 Transfers and Other 3 Totals  
Transportation and transit 4.3 0.6 4.9  
Health 2.8 0.4 3.2  
Education, postsecondary and training 2.0 0.2 2.2  
Municipal and other 0.8 0.7 1.5  
Totals 10.0 1.8 11.8  
1 Numbers may not add due to rounding.
2 Includes adjustments for the net book value of assets disposed of during the year, as well as changes in valuation.
3 Mainly transfers for capital purposes to municipalities and universities and expenditures for capital repairs. Transfers for capital-related purposes and other infrastructure expenditures are recorded as expenses in the Province's Consolidated Statement of Operations.

Infrastructure spending, including third-party funding, was $11.8 billion, below the $14.5 billion set out in the 2013 Budget. The change was mainly due to lower-than-forecast construction activity.

Since 2003, Ontario has invested nearly $100 billion in infrastructure, focusing on hospitals, schools and transportation infrastructure, which has made Ontario a safer, more competitive and more productive province. These investments have also supported an average of 100,000 jobs each year in construction and related industries.

Examples of recent and current infrastructure projects include:

  • Improving the flow of goods and people on Ontario’s highways by adding lanes to Highway 7 in Durham Region, repairing 12 bridges on Highway 401 in Toronto, and starting construction on a new, four-lane bridge on Highway 11–17 east of Nipigon.
  • Building public transit infrastructure, such as the Eglinton Crosstown and Ottawa light rail transit projects.
  • Investing in modern health infrastructure, such as the recently completed St. Joseph’s Healthcare Hamilton’s West 5th Campus and ongoing construction of 11 major hospital projects across the province, including the Providence Care Hospital in Kingston.
  • Building better places to learn by providing $1.47 billion in capital funding since 2010 to help create close to 3,500 new kindergarten classrooms to support the rollout of full-day kindergarten across the province.
  • Helping to develop a skilled and innovative workforce by funding projects at colleges and universities, such as the newly expanded and renovated MacOdrum Library at Carleton University.
  • Helping municipalities prepare asset management plans and address critical core infrastructure projects through the Municipal Infrastructure Strategy.

Borrowing and financial position

Ontario’s total debt increased by $14.7 billion in 2013–14, net of refinancing, rising from $281.1 billion to $295.8 billion, with much of the increase applied to financing the deficit and investing in infrastructure. The Province successfully completed its annual borrowing program in 2013–14 despite challenges that continue to linger in the global financial markets.

Including both new issues and refinancing of existing debt, the Province borrowed a total of $36.0 billion. Total debt at March 31, 2014, was $4.9 billion higher than the forecast of $290.9 billion in the 2013 Budget due to Ontario pre-funding some of its borrowing requirements for 2014–15, as well as debt issued at a discount and foreign exchange debt revaluations.

The Province issued 82 per cent of its borrowing requirements in the Canadian-dollar market in 2013–14, reflecting robust domestic demand. This was well above both the 72 per cent achieved in 2012–13 and the target of at least 70 per cent set out in the 2013 Budget. The remaining 18 per cent was completed through global bonds issued in U.S. dollars. The ability to issue debt targeted at a variety of buyers allows the Province to borrow cost-effectively and access markets even during difficult conditions.

The following table summarizes how the Province used its net new financing in 2013–14:

Table 4
Use of new financing by the Province, 2013–14
($ Billions)
Operating deficit and other transactions 1: 9.9
Cash invested in capital assets owned by the Province and its consolidated organizations, including hospitals, school boards and colleges 2: 9.9
Decrease in the Province's cash and investments: (4.5)
Less: Increase in other long-term financing 3: (0.6)
Net new financing 14.7
1 The Province's operating deficit of $10.5 billion offset by a net $1.0 billion in changes to assets and liabilities that provided cash for operating purposes. See the Consolidated Statement of Cash Flow.
2 New investments of $10.3 billion less proceeds of $0.4 billion from the sale of tangible capital assets.
3 Including net increase in financing of capital projects through Alternative Financing and Procurement that reflects a claim on future government resources. See Note 5 to the Consolidated Financial Statements.

The Province’s net debt, which consists of its obligations less its financial assets, was $267.2 billion at March 31, 2014, up from $252.1 billion a year earlier but below the $272.8 billion forecast in the 2013 Budget. Financial assets, including cash, short-term and other investments, and accounts and loans receivable, amounted to $77.6 billion at year-end.

The Province’s net debt-to-GDP ratio was 38.6 per cent at the end of fiscal 2013–14, compared to the 39.3 per cent forecast in the 2013 Budget, and the 40.8 per cent forecast in the April 25, 2012 update to the 2012 Budget.

This ratio is expected to peak at 40.5 per cent in 2015–16, slightly above the 40.4 per cent forecast in the 2013 Budget, but below the 40.8 per cent forecast in the 2014 Budget. The government continues to maintain a target of reducing Ontario’s net debt-to-GDP ratio to its pre-recession level of 27 per cent.

Ontario’s borrowing program also provides funds used to finance infrastructure projects, including transit, roads, hospitals and schools. These infrastructure investments steadily increase the level of assets available to provide public services. The net book value of these tangible capital assets was $90.6 billion at the end of the 2013–14 fiscal year, up from $85.0 billion a year earlier.

Although lower by $33 million than forecast in the 2013 Budget, interest expense totalled $10.6 billion in 2013–14, an increase of $231 million from a year earlier. Eliminating the deficit is key to helping control growth in interest expense.

Indicators of financial condition

The use of financial indicators helps the public and other readers of the Annual Report assess the financial health of the Province. Through the indicators’ levels and trends, readers are able to gauge the impacts of economic and other events on the Province’s finances, as well as how the government is responding to these.

For greater transparency and accountability, the Province is expanding the number of indicators on which it reports. As well, an additional two years of historic data have been provided to help readers see and assess trends over a longer time period.

These enhancements reflect the Province’s commitment to ensuring its financial reports are readable and useful and support accountability. The indicators it provides largely reflect the suggestions of the Public Sector Accounting Board (PSAB), which recommends accounting and reporting standards for public-sector entities in Canada, including governments. In addition to carrying out its own analyses, the Province looks to PSAB for guidance in this area.

PSAB’s suggested approach is for governments to provide indicators that illustrate sustainability, flexibility and vulnerability:

  • A government’s fiscal approach is sustainable if, over time, it does not result in overly high levels of taxation, debt, or both. For example, the level and trend in net debt to GDP, which shows claims on the economy arising from fiscal decisions, can help illustrate long-term sustainability.
  • Flexibility refers to the options available to a government to achieve its fiscal plans. For example, rising debt servicing costs may, at a certain point, signal that the government has limited flexibility in funding its activities through further borrowing.
  • Vulnerability refers to the risk of fiscal impacts from decisions and events outside government’s control. Factors influencing vulnerability include heavy dependence on transfers from another level of government and high exposure to changes in foreign currency exchange rates.

As Chart 4 shows, Ontario continues to benefit from a high proportion of own-source revenue, including taxation, to help pay for programs and services. Taxation revenue has recovered in step with the improving economic picture. Federal transfers peaked as a share of total revenue at 21.5 per cent in 2010–11, reflecting stimulus spending to help counter the recession. In 2013–14, federal transfers were below projection, as explained earlier in this report. Although Ontario does not rely heavily on federal transfers, it remains vulnerable to federal decisions that, in many instances, result in increased revenue volatility and uncertainty. Including federal transfers, Ontario has the lowest revenue per capita of any province in Canada.

Chart 5 shows the extent to which Ontario has been able to manage the growth in spending on programs and services. Because health care represents the largest share of government program spending, transformation efforts to make the sector more efficient and sustainable are vital to managing overall spending growth. These continuing efforts have moderated the year-over-year growth in spending to 2.8 per cent in 2013–14. However, prior to the transformation that started in 2012–13, the sector had been experiencing an average growth rate of about six per cent per year since 2003–04.

With revenue growth steady but modest, careful management of spending in all areas has been critical to achieving Ontario’s fiscal plans. Provincial program spending has been lower than forecast each year since the fall 2009 Ontario Economic Outlook and Fiscal Review. Between 2010–11 and 2013–14, the annual growth rate has been held on average to 1.2 per cent.

Interest on debt expense has also been consistently below forecast, but has nonetheless grown gradually from 7.5 per cent of total spending in 2009–10 to the current level of 8.4 per cent.

As Chart 6 shows, increases in Ontario’s spending on programs and interest on debt on a per-capita basis have remained relatively stable since 2009–10, reflecting the government’s ability to manage spending carefully as revenue faltered and then began to recover from the impacts of the 2008–09 global recession. Ontario consistently has the lowest per capita program spending among all Canadian provinces. As a result of responsible management of spending and economic growth, total spending has fallen as a percentage of GDP since 2009–10.

The Province’s accumulated deficit essentially represents the cumulative total of the deficits and surpluses it has incurred over time (there is also a small component that reflects unrealized gains/losses on OPG investments required under the Ontario Nuclear Funds Agreement). As Illustration 1 shows, the Province’s accumulated deficit plus its financial assets and tangible capital assets equal its total liabilities. Its net debt equals total liabilities less financial assets, and this can also be expressed as net debt being made up of two components: tangible capital assets and accumulated deficit.

Because Ontario has continued to invest in the programs, services and infrastructure that its people and businesses depend on, its debt has increased. Chart 7 looks at the growth of net debt per capita, as well as the growth of the two components, tangible capital assets and accumulated deficit, that make it up.

The steady increase in the value of tangible capital assets — including roads, transit systems, bridges, schools and hospitals — from under $5,000 per capita in 2009–10 to $6,648 per capita in 2013–14 — shows the extent to which people in Ontario are benefiting from investments in infrastructure. Owing to consistently better than planned results over the last five years, Ontario’s accumulated deficit is $25 billion lower than it otherwise would have been. Ontario plans to control the growth in spending to reduce and then eliminate the annual deficit, which will in turn constrain the growth in net debt.

As noted on page 17 of the “Borrowing and financial position” section, borrowing to support both infrastructure and vital public services has caused the ratio of net debt to GDP to increase. As the economy continues to grow and spending is carefully managed, the ratio is expected to peak in 2015–16, as Chart 3 indicates, and then begin to decline.

The majority of Ontario’s borrowings are in Canadian dollars, but a portion is in other currencies. Foreign currency exposure through borrowing in other currencies gives rise to vulnerability to fluctuations in exchange rates, if the exposure is not hedged. The Province hedges its exposure by using currency swaps and foreign exchange forward contracts to reduce the risks associated with issuing bonds in different currencies. Its foreign exchange exposure limit is set at five per cent; as Chart 8 shows, unhedged exposure has been well below that limit for the past five years.


Ontario remains firmly committed to eliminating the deficit by 2017–18. Because of the better-than-planned results of the past five years, Ontario’s accumulated deficit is $25 billion lower than it otherwise would have been, as Chart 9 shows. Between 2010–11 and 2013–14, careful financial management has held growth in program spending to an average of 1.2 per cent a year. Ontario will continue to invest in programs and services that people depend on, such as health, education and job creation, but will manage spending growth by ensuring that government activities are carried out efficiently.

The 2014 Budget outlined key investments in people, modern infrastructure and a dynamic and innovative business climate — investments that will help to spur economic growth and create the new jobs necessary to support eliminating the deficit. Together with these strategic investments, the government also committed to taking deliberate actions in the following areas to help ensure that the priority programs and services that people rely on are maintained and enhanced while the deficit is eliminated:

  • Responsibly managing program spending;
  • Maintaining the integrity of the Province’s revenue;
  • Enhancing tax fairness measures for people and businesses; and
  • Unlocking the value of the Province’s assets.

In June 2014, the government appointed a new President of the Treasury Board who will work with the Minister of Finance, the Premier, Treasury Board members and Cabinet to help Ontario meet its fiscal goals. A new ministry, the Treasury Board Secretariat, has been created to support the President in implementing the fiscal plan. It integrates several key functions, including expenditure planning, management and controllership; oversight of labour relations in the public service and broader public sector; responsibility for agency governance and oversight; information technology; and Open Government.

The recommendations of an expenditure review announced in the fall 2013 Ontario Economic Outlook and Fiscal Review, in particular a freeze on non-essential spending in the final quarter of the fiscal year, helped achieve the lower-than-forecast deficit in 2013–14. Building on this success, expenditure review will continue, both to help determine which programs should be enhanced or reduced and to transform services to be more efficient and achieve better outcomes. As well, targets for program review savings are set at $250 million for 2014–15 and $500 million for each of 2015–16 and 2016–17.

In early 2012, the Commission on the Reform of Ontario’s Public Services recommended ways of achieving greater efficiencies in the Ontario public sector. The Ontario government is currently acting on more than 80 per cent of the Commission’s recommendations, up from 60 per cent one year ago.

Health care remains the largest single expense for Ontario, and the Province remains committed to Ontario’s Action Plan for Health Care, a road map for creating a more sustainable and high-quality health care system.

A major focus of the Action Plan is ensuring that patients get timely access to the most appropriate care in the most appropriate setting. This involves providing better-integrated care in the community when possible so that patients can stay at home, reducing stress on them and avoiding the costs to the system of unnecessary hospital or long-term care home admissions.

Ontario is finding additional efficiencies in health care, for example through reforms that have resulted in savings in prescription drug costs, including the price the government pays for generic drugs. These changes are achieving savings of about $500 million a year. Managing the cost of brand-name drugs until the corresponding generic drugs become available has saved an additional $100 million annually since 2011–12.

With over half of government spending going to salaries and benefits in the Ontario Public Service and broader public sector, managing public-sector compensation costs is another important part of the Province’s plan to control spending and protect front-line government services. Ontario is managing public-sector and executive compensation from within Ontario’s existing fiscal framework so that any modest wage increases that are negotiated will need to be absorbed within funding envelopes, and within Ontario’s overall fiscal plan, through efficiency and productivity gains, or other tradeoffs that continue to deliver the service levels to meet public needs.

The government is taking action to modernize and manage public-sector benefit costs by bringing public service retirement benefits in line with practices in the private sector and other jurisdictions, which will save the Province more than $1.4 billion by 2017–18.

Pension plans in all sectors, including those in the public sector, have faced funding pressures arising from general economic and demographic factors. Ontario is continuing to take action to reduce pension costs and enhance the affordability of public-sector pension plans. The government’s successful efforts to date to constrain public-sector wage growth, along with better-than-expected investment performance, have reduced pension expense costs over the medium term by $1.1 billion since the 2013 Budget.

To protect the integrity of provincial revenue, the government continues to support a fair and efficient tax administration system that ensures everyone pays their fair share of taxes. In particular, the government has introduced initiatives aimed at addressing the underground economy and corporate tax avoidance. The government has also introduced additional tax measures such as increasing the tobacco tax rate, which is expected to generate more than $100 million annually in incremental revenue. As well, it has implemented an increase to Personal Income Tax on taxable income above $150,000, which is expected to raise $0.7 billion by 2016–17.

With respect to unlocking the value of the Province’s assets, the government has established the Premier’s Advisory Council on Government Assets. The Council, which is being chaired by Ed Clark, retiring Group President and Chief Executive Officer of TD Bank Group, will report to the Premier on options for unlocking the full value of large and complex government business enterprises, specifically the Liquor Control Board of Ontario, Hydro One Inc. and OPG.

Accountability and transparency in financial management and reporting

Ontario continues to act on opportunities to further strengthen transparency, financial management and fiscal accountability, in support of achieving the Province’s fiscal plan and delivering government programs and services.

The C.D. Howe Institute, an independent, not-for-profit research organization, recently highlighted Ontario’s strong performance in the area of comparability between fiscal planning and reporting documents, which is key to transparency and accountability:

We award A’s to Ottawa and Ontario. Our idealized reader would have little difficulty finding comparable and PSAB-consistent headline revenue and spending numbers in the budgets and public accounts of these jurisdictions.

– Credibility on the (Bottom) Line:
The Fiscal Accountability of Canada’s Senior Governments, 2013

Environmental liabilities

The Province currently reports financial liabilities based on its environmental obligations resulting from federal legislation. In line with a new PSAB standard on accounting for contaminated land, the government will begin to take into consideration its own legislation when reporting liabilities. The new standard will be reflected in the Public Accounts of Ontario for the 2014–15 fiscal year. The government is considering related legislative changes to support the new reporting standard.

Dedicated revenue reporting

Accountable financial management requires transparent reporting on the Province’s delivery of its financial commitments. The 2014 Budget proposed the use of dedicated revenue to fund key infrastructure projects, particularly transportation and transit. To ensure accountability for the use of dedicated funds, the government is exploring potential new reporting mechanisms and associated legislative changes to support required appropriations.

Classified agencies

The government continues to strengthen its oversight of classified agencies and reduce risk in the agencies sector. The government is committed to ensuring that only those agencies that play an important role in the social and economic fabric of the province continue to operate.

In 2010–11, the government reduced the number of classified agencies in Ontario from 259 to 246, and since then through hard work and careful management, has achieved an additional reduction of roughly 20 per cent. It is committed to reducing the number by approximately 30 per cent below the 2011 baseline of 246 by March 2015. For example, legislative amendments that have been passed, but at the time of publishing have not yet come into force, would allow two electricity agencies, the Ontario Power Authority and the Independent Electricity System Operator, to be consolidated to realize efficiencies and contain costs.

Beginning in the 2014–15 fiscal year, the government will require regular review of the mandates of all classified agencies. As well, to improve accountability at the most senior levels in classified agencies, the Chairs/CEOs of all agencies will be required to annually attest that their organizations are in full compliance with all government directives. These measures will help ensure that agencies stay on track and remain aligned with the needs and expectations of residents of Ontario and their government.

Performing While Transforming

Health care

The implementation of Ontario’s Action Plan for Health Care, now in its third year, is driving major transformation in the provincial health care system. The plan is based on keeping people in Ontario healthy, especially through measures to prevent disease, improving access to family health care and making the right care available in the right place at the right time. The goals are to create a system where a broad cross-section of health care providers work together to deliver evidenced-based, high-quality care that results in better outcomes, and to provide better value for health dollars invested.

As this transformation continues, new measures of performance will be helpful in assessing progress in moving to a more community-focused and patient-centred model. Existing measures, such as wait times in emergency departments, will continue to be useful in assessing responses to more critical needs.

Many recent accomplishments reflect the commitment to transform the system:

  • Ontario continues to expand community Health Links, which bring together health care providers to coordinate care for high-needs patients such as seniors and people with multiple, complex conditions. As of March 2014, 54 Health Links have been created, with at least one in each Local Health Integration Network, and there are plans to create more than 90 in total. This initiative is extremely important because it is estimated that the highest-needs patients, who comprise only five per cent of the patient population, account for two-thirds of system costs.
  • As of the spring of 2014, 25 Nurse Practitioner-Led Clinics were providing care to more than 37,000 patients in Ontario, many of whom previously did not have access to a primary care provider. Ontario was the first Canadian province to introduce this innovative model. As well, Family Health Teams, in which care providers such as doctors, nurses, dieticians, pharmacists and other health professionals work together, are currently providing care to over three million people in Ontario, including more than 800,000 who previously did not have a family doctor. When patients have access to family health care, they stay healthier, get connected to the right care and are less likely to require costly treatment in hospital.
  • Pharmacists may now provide more health services, including administering flu vaccines, renewing and adapting existing prescriptions, and prescribing smoking cessation drugs. Pharmacist-administered flu shots are often more convenient, encouraging more people to get the shot while freeing up the time of other front-line care providers. As of mid-March 2014, pharmacists had delivered more than 765,000 flu shots.
  • Two new midwife-led birth centres opened in 2014, in Toronto and Ottawa, offering women the choice to give birth in a safe, home-like setting instead of hospital. Each centre can provide services for up to 450 births a year. Midwife-led birth centres have been proven to be a safe and cost-effective alternative to hospital deliveries, enabling acute care facilities to better focus on higher-risk births.
  • Hospitals represent the largest share of health spending. Ontario is in the third year of a major funding reform, moving from a provider-centred global funding approach to a more patient-centred, activity-based approach. The overall share of hospital budgets based on patient- and activity-based funding is increasing from 46 per cent in 2012–13 to 53 per cent in 2014–15, as Ontario moves to allocate 70 per cent through this model. This shift encourages hospitals to operate more efficiently while maintaining high standards of care.
  • As of autumn 2013, more one-on-one physiotherapy, group exercise classes and fall prevention services were made available in long-term care homes and communities across the province. Physiotherapy is also being integrated into family health care settings, including Family Health Teams, Nurse Practitioner-Led Clinics and Community Health Centres. These initiatives are key to helping older people, in particular, to lead the healthiest and most independent lives possible.
  • The Province is investing $6 million to help develop and expand Community Paramedicine initiatives, to help patients get the care they need while reducing the need for emergency room visits and hospital admissions. Through the program, paramedics visit patients, including those known to call emergency services frequently, on a non-emergency basis and offer help in such areas as taking medications as prescribed, managing chronic disease at home, and connecting to local supports and care. There are currently 14 Community Paramedicine programs in Ontario, with more planned.
  • Ontario continues to be a leader in Canada in wait times for key services benchmarked at a national level, including hip and knee replacements, radiation therapy, cataract surgery and coronary bypass surgery, receiving a grade of A or A+ in each of those categories from the national Wait Time Alliance. The Alliance provides more detailed reporting by province and for these and other procedures on its website, at Ontario provides wait times across the province on numerous surgical and diagnostic procedures at
  • The same web pages provide access to information on emergency department wait times by hospital. Ontario is working to reduce emergency wait times by building on the success of its ER Pay for Results program. In 2013–14, it invested $93 million through the program across 74 of Ontario’s busiest and most challenged emergency departments.
  • In line with health care transformation, Health Quality Ontario, a government agency, is taking on an expanded role in reporting on many aspects of health care and recommending evidence-based approaches. Health Quality Ontario publicly reports on a wide range of quality indicators for long-term care homes, home care, hospital patient safety and primary care through its website at It helps identify areas where improvements can be made, as well as promoting the sharing of information and best practices.


A strong education system provides a foundation for vibrant communities and a prosperous society. Ontario’s publicly funded education system is recognized as one of the best in the world.

The introduction of full-day kindergarten has been the most transformative change to the province’s school system in a generation. Other vital educational investments have included new programs for secondary students, such as the specialist high skills major and dual credits. These are creating better links between skills and education so that students are better prepared to enter the workforce once they graduate.

Ontario has seen strong progress in student achievement over the past decade:

  • Compared to 2003, 150,000 more elementary students were meeting or beating the provincial standard in reading, writing and math in 2013. Ontario students consistently score above the Canadian average in math, reading and science. Detailed test results are available on the website of the Education Quality and Accountability Office (EQAO) at
  • Ontario’s students also rank among the best in the world when it comes to assessment results like the Programme for International Student Assessment. This is all the more noteworthy because students born outside Canada comprise 26 per cent of the publicly funded system. Grade 3 and 6 English Language Learners and Actualisation linguistique en français (French language) learners have narrowed the achievement gap with the general population by 83 per cent since 2002–03. Ontario is one of the few jurisdictions in the world where students perform above international standards regardless of socioeconomic background or first language.
  • The provincial graduation rate increased from 68 per cent in 2003–04 to 83 per cent in 2012–13, a gain of 15 percentage points.
  • By September 2014, full-day kindergarten will be available to all four- and five-year-olds in Ontario.

Through the implementation of the new Achieving Excellence initiative, Ontario’s students will gain higher-order skills, such as critical thinking and problem solving, and knowledge that will lead them to become the motivated innovators, skilled workers, entrepreneurs and leaders of tomorrow.

Ontario’s ability to compete increasingly depends on a highly skilled, diverse and adaptable workforce. The focus of postsecondary education and training funding is to build that competitive edge. As a result of that focus:

  • There are 170,000 additional students enrolled at Ontario publicly assisted colleges and universities versus 10 years ago, an increase that is greater than in any decade in Ontario’s history.
  • The number of graduate students at Ontario universities has increased by 60 per cent since 2002–03.
  • Among postsecondary students, 77 per cent of university undergraduates now graduate, up from 73 per cent in 2002, as do 65 per cent of college students, up from 57 per cent.
  • Ninety-three per cent of 2011 university graduates were employed within two years of graduation, with 75 per cent in careers relating to their program of study, and 83 per cent of 2012–13 graduates from public colleges were employed within six months of graduation.
  • There were a total of 28,326 new registrations for apprenticeship training in 2013–14, up from 19,098 a decade earlier.


Developing a diverse supply mix that includes more renewable energy sources and putting conservation first are the cornerstones of Ontario’s plan to provide clean and reliable energy. In 2013, Ontario updated its Long-Term Energy Plan (LTEP) to continue building on these cornerstones while lowering the projected total system costs to enhance affordability. The plan and other energy initiatives play a critical role in supporting the government’s long-term priorities of economic prosperity, environmental stewardship and sustainable communities.

  • In April 2014, Ontario became the first jurisdiction in North America to fully eliminate coal as a source of electricity generation. Ontario had been steadily decreasing its reliance on coal since 2003, removing a total of 7,500 megawatts (MW) from service at coal-fired plants across the province. With the final step, which saw the plant in Thunder Bay burn its last coal before conversion to advanced biomass generation, it has accomplished the single largest climate change initiative in North America, reducing annual carbon dioxide emissions by up to 30 megatonnes. Coal generation is being replaced with a mix of conservation, refurbished nuclear, renewable energy and natural gas. Ontario has also adopted a policy where conservation will be the first resource to be considered before building new generation.
  • According to the 2013 LTEP, average residential customers can expect to pay about $520 less over the 2013–17 five-year period compared to what was originally forecast in the 2010 LTEP. Ontario has undertaken a number of initiatives to control costs, including reducing Feed-In Tariff (FIT) prices for renewable generation, negotiating new contracts with existing non-utility generators only to meet system needs, introducing wind dispatch, deferring new build nuclear, and achieving early coal closure at the Lambton and Nanticoke generating stations. The government has also reduced the amount of capacity contracted with a Korean renewable energy consortium to decrease contract costs by $3.7 billion.
  • Last year, the government committed to making 900 MW of new capacity available between 2013 and 2018 for the FIT and microFIT programs. Starting this year, annual procurement targets for the next four years are set at 150 MW for FIT and 50 MW for microFIT.
  • Ontario’s new Large Renewable Procurement process for projects over 500 kilowatts is a reflection of the government’s commitment to increase the role of municipalities in the development of large-scale renewable energy projects. The new process will provide municipalities with a stronger voice and additional opportunities to participate in the development of renewable energy projects. It will require developers to engage municipalities from the beginning to take into account local needs and considerations before contracts are offered. The Ontario Power Authority officially launched the Request for Qualifications for the new procurement process in July.
  • In 2013, Hydro One Inc., which provides electricity transmission and distribution services, invested nearly $1.4 billion in its systems. Its total investments of more than $11 billion since 2003, including upgrades to more than 10,000 kilometres of lines, have increased transmission capacity by an estimated 10,000 MW, improving electricity supply and reliability.
  • Close to 4.8 million smart meters in use across the province provide hourly readings of customers’ energy consumption, allowing greater opportunities for conservation. More than 4.4 million customers are on time-of-use pricing, which reflects the changing cost of electricity through the day, incenting them to shift usage from peak to off-peak hours to save money. For the system as a whole, reduced peak demand can avoid or defer the need for new generation, transmission and distribution, reducing costs for all customers.
  • The Environmental Commissioner of Ontario reports on progress on energy conservation in the province. His most recent report is available at

Comparison of interim to actual results

The Province provided interim estimates of results for 2013–14 in the 2014 Budget. The interim deficit projection was $11.3 billion, while the actual deficit figure reported for the year is $10.5 billion. Table 5 outlines the major variances between the interim and actual results.

Table 5
Comparison of 2013–14 Interim to Actual results
($ Billions )
Taxation 80.5 80.0 (0.5)
Government of Canada 22.2 22.3 0.1
Income from government business enterprises 4.8 5.3 0.5
Other non-tax revenue 8.2 8.3 0.1
Total Revenue 115.7 115.9 0.2
Programs 116.4 115.8 (0.6)
Interest on debt 10.6 10.6 (0.0)
Total Expense 127.0 126.4 (0.6)
Annual Deficit (11.3) (10.5) (0.8)
Note: Interim and related variance figures may not add due to rounding.

Revenue was up slightly from the interim estimate, with declines in taxation more than offset by gains in income from government business enterprises, primarily OPG, as final results became available, and by a small increase in other non-tax revenue.

The net gain of $0.2 billion on the revenue side together with slightly lower-than-expected spending of $0.6 billion accounted for the $0.8 billion improvement in the deficit. The lower spending was attributable to savings across a range of ministries as additional information became available after the interim figures were collected. These savings were partially offset by higher expense in the health sector, largely reflecting the $290 million transfer of Hamilton Health Sciences Corporation assets, and the $190 million committed by the Ministry of Municipal Affairs and Housing to municipalities and conservation authorities affected by the December 2013 ice storm, both of which are discussed on pages 14 and 15.

Return to Chart 1

Chart Descriptions

Chart 1: Revenue sources, 2013–14

This chart shows the share of total revenue sources for 2013–14 by major revenue category. The largest revenue source is Personal Income Tax revenue accounting for 23.2 per cent of total revenue, followed by Sales Tax at 17.7 per cent of total revenue, and Corporation Tax at 9.9 per cent. Other major non-taxation sources of revenue are Federal Transfers at 19.2 per cent of total revenue, various Other Non-Tax Revenues 7.2 per cent of total revenue and Income from Government Business Enterprises at 4.6 per cent of total revenue.

Return to Chart 2

Chart 2: Share of program expense by sector, 2013–14

This chart shows the share of program expense in 2013–14 by sector. Program expense equals total expense minus interest on debt expense.

The largest expense is the Health Sector, accounting for 42.2 per cent of total program expense.

The remaining sectors of program expense include the Education Sector at 20.3 per cent; the Children’s and Social Services Sector at 12.2 per cent; the Postsecondary Education and Training Sector at 6.6 per cent; the Justice Sector at 3.6 per cent; and Other Programs at 15.1 per cent.

Note that the Education Sector excludes Teachers’ Pension Plan. Teachers’ Pension Plan expense is included in Other Programs.

Return to Chart 3

Chart 3: Net debt as a share of GDP

This line graph shows the net debt-to-GDP ratio from 1999–2000 to 2017–18. The net debt-to-GDP is projected to peak at 40.5 per cent in 2015–16.

Return to Chart 4

Chart 4: Composition of revenues by source

This bar graph shows the composition of [total] revenues by source categories: Taxation; Federal Transfers; Income for Government Business Enterprises; and Other from 2009–10 to 2013–14.

Return to Chart 5

Chart 5: Composition of expenses by sector

This bar graph shows the composition of [total] expenses by sector: Health; Education; Postsecondary Education and Training; Children’s and Social Services; Justice; Other Programs; and Interest Expense from 2009–10 to 2013–14.

Return to Chart 6

Chart 6: Spending per capita and as a share of GDP

From 2009–10 to 2013–14, this bar graph shows Ontario’s spending on programs and interest on debt on a per-capita basis remained relatively stable, and the percentage share of GDP has decreased.

Return to Chart 7

Chart 7: Net debt per capita and its components

This bar graph shows net debt per capita growing from 2009–10 to 2013–14 due to the growth in its two components, tangible capital assets and accumulated deficit.

Return to Chart 8

Chart 8: Foreign currency exposure (versus 5% exposure limit)

This bar graph shows the Province’s unhedged exposure has been well below the 5% exposure limit from 2009–10 to 2013–14.

Return to Chart 9

Chart 9: Ontario’s Record Against Deficit Targets

This chart shows Ontario’s actual deficits versus deficit targets from 2009–10 through 2013–14.

In the 2009 Ontario Economic Outlook and Fiscal Review, Ontario projected a $24.7 billion deficit for 2009–10. The actual result for 2009–10 was a deficit of $19.3 billion. The 2010 Budget projected deficits of $19.7 billion for 2010–11, $17.3 billion for 2011–12, $15.9 billion for 2012–13 and $13.3 billion for 2013–14. The actual result for 2010–11 was a deficit of $14.0 billion. The actual result for 2011–12 was a deficit of $13.0 billion. The actual result for 2012–13 was a deficit of $9.2 billion, and the actual result for 2013–14 was a deficit of $10.5 billion. .

Return to Illustration

Illustration 1: Net debt, accumulated deficit and tangible capital assets

This illustration shows the Province’s accumulated deficit plus its financial assets and tangible capital assets equal its total liabilities. Net debt equals total liabilities less financial assets, and this can also be expressed as net debt being made up of two components: tangible capital assets and accumulated deficit.