Public Accounts of Ontario 2014-2015 - Annual Report

Treasury Board Secretariat

Office of the President

99 Wellesley Street West
Room 4320, Whitney Block
Toronto, ON M7A 1W3

Tel.:   416-327-2333
Fax:   416-327-3790

Secrétariat du Conseil du Trésor

Bureau du président

99, rue Wellesley Ouest
Édifice Whitney, bureau 4320
Toronto, ON M7A 1W3

Tél. :  416 327-2333
Téléc. :  416 327-3790


The Honourable Elizabeth Dowdeswell, OC, OOnt
Lieutenant Governor of Ontario
Legislative Building
Queen’s Park
Toronto, ON  M7A 1A1

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, 2015, in accordance with the requirements of the Financial Administration Act.

Respectfully submitted,

original signed by original signed by
The Honourable Deb Matthews
Deputy Premier
President of the Treasury Board
Minister Responsible for the
Poverty Reduction Strategy
The Honourable Charles Sousa
Minister of Finance
Toronto, September 2015 Toronto, September 2015


Guide to the Public Accounts
Annual Report
Supporting Volumes
Statement of Responsibility


Analysis of 2014–15 results
Infrastructure investment
The reserve
Borrowing and financial position
Indicators of financial condition
Fiscal management
Program Review, Renewal and Transformation
Managing compensation costs
Maintaining tax fairness and a level playing field for business
Strengthening government transparency, financial management and fiscal accountability
Reporting on government priorities
Climate change
Strengthening retirement security
A fair society
Accountability and transparency
Trillium Trust
Open Government
Agency and broader public sector oversight
Accounting standards
Comparison of interim to actual results


Auditor’s Report
Consolidated Statement of Operations
Consolidated Statement of Financial Position
Consolidated Statement of Change in Net Debt
Consolidated Statement of Change in Accumulated Deficit
Consolidated Statement of Cash Flow
Notes to the Consolidated Financial Statements
Schedules to the Consolidated Financial Statements
Sources of Additional Information


I am pleased to present the Province of Ontario’s Public Accounts for the year 2014–15. For the first time, the government is providing some of our Public Accounts information online in a more visual and user-friendly format. Our objective is to increase transparency about the Province’s finances and assist the public in understanding and using Ontario’s financial information.

Our government is focused on building Ontario up and ensuring the province is the best place to live, from childhood to retirement, and where everyone has the opportunity to realize their full potential. We have a four-part plan that includes investing in people’s talents and skills, building new infrastructure like roads and transit, creating a dynamic, innovative environment where business thrives, and building a secure retirement savings plan.

The deficit for 2014–15 is $10.3 billion, down $2.2 billion from the $12.5 billion projection in the 2014 Budget. This marks the sixth year in a row that spending has been lower than forecast. This success is due to an ongoing focus on managing growth in spending and working to achieve the best possible value for every dollar spent. As a result of beating its deficit targets, Ontario’s accumulated deficit is more than $25 billion lower than it otherwise would have been.

We know there is hard work ahead to eliminate the deficit by 2017–18 and we will make the tough but necessary decisions to ensure our province continues to grow. Our path to balance is focused on Program Review, Renewal and Transformation, managing compensation costs, and maintaining tax fairness and a level playing field for business. As President of the Treasury Board, I have been working closely with the Minister of Finance Charles Sousa and members of the Program Review, Renewal and Transformation (PRRT) Sub-Committee of Treasury Board to manage government expenses and achieve our savings targets.

Our government is focused on managing public-sector compensation. Our government values the work of the tremendous people who support our world-class public services. Our goal is to negotiate fair agreements that balance the interests of employees with the need to provide sustainable and affordable public services. We have been clear in both the 2014 and 2015 Budgets that there is no new funding for compensation increases and any modest wage increases must be offset by other measures to create a net zero outcome. All public-sector partners must continue to work together to control current and future compensation costs.

In the 2015 Budget, Building Ontario Up, we put forward a plan to continue investing in Ontario and supporting important programs and services. We know that Ontario’s greatest strength is its people and our highly skilled workforce is diverse and adaptive, and helps provide a competitive advantage over other jurisdictions.

Employment has rebounded strongly from the recessionary low in June 2009, with over half a million net new jobs created — the majority of which are in industries paying above-average wages. These high-quality jobs provide opportunities for personal development, while also creating financial stability and securing prosperity for all Ontarians.

We are investing more than $130 billion over 10 years in public infrastructure, such as roads, bridges and transit, including $31.5 billion in dedicated funds through the Moving Ontario Forward plan. Ontario is renewing and expanding public infrastructure to support Ontario industries, create jobs and provide long-term benefits to Ontarians and the economy. Over the last decade, the Province has made major investments in infrastructure, supporting mobility and economic growth. Ontario is also moving ahead with its plan to unlock the value of certain Provincial assets to help support investments in transit, transportation and other priority infrastructure projects through the Moving Ontario Forward plan.

Our government is also committed to ensuring that all Ontarians have the support they need to realize their full potential. Ontario’s plan for a fair society is a blueprint for making the province a better place for everyone. We will continue to enhance critical supports for Ontarians, with a focus on ensuring that all Ontarians get the high-quality health care services they need and rely on and investing in initiatives that help lift people out of poverty.

For many workers in today’s economy, pension coverage through workplace plans is difficult to attain. As well, all Ontarians will face greater financial pressure and uncertainty due to longer average lifespans. That is why we are strengthening retirement income security through the Ontario Retirement Pension Plan (ORPP) to provide a predictable, lifelong stream of retirement income to eligible Ontarians.

Our government is taking a deliberate and thoughtful approach to balancing the budget by 2017–18, but we will do so while continuing to make investments that create jobs, expand opportunities and enhance prosperity for all Ontarians. We know there are difficult choices ahead as we transform public services to deliver better outcomes for people, but people can be assured that their government will take a fair, balanced and evidence-informed approach, one that protects and improves the services that matter to Ontarians.

original signed by

The Honourable Deb Matthews
Deputy Premier
President of the Treasury Board
Minister Responsible for the Poverty Reduction Strategy


The Annual Report is a key element of the Public Accounts of the Province of Ontario and is central to demonstrating the Province’s transparency in reporting its financial activities and position and its accountability for financial resources.

This Annual Report presents Ontario’s financial results and position for the year ending March 31, 2015, as well as progress on the government’s priorities. It compares the Province’s actual financial results for the 2014–15 fiscal year to the Budget plan presented on July 14, 2014, following the provincial general election in June, and explains major variances.

Further supporting the government’s commitment to accountability and transparency in financial reporting, the Annual Report also outlines trends in a number of financial indicators over the past several years and reports on performance in key sectors. The Annual Report helps users of the financial statements to understand the impacts of economic conditions, combined with the government’s decisions, on the Province’s financial position for the year.

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 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 2014–15 Public Accounts for their 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.

original 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 present fairly the annual financial results and financial position of the government in accordance with Canadian public-sector accounting standards.
  • The Consolidated Statement of Operations shows government revenue, the cost of providing programs and services, and debt financing costs. The result is the annual surplus or deficit. The statement includes a comparison to the Budget plan presented on July 14, 2014, and the financial 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, and its obligations. The Province’s net debt consists of its total obligations less its financial assets, which include cash, short-term investments and investments in government business enterprises. 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 such capital assets as highways, bridges and government buildings. 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 and investments in infrastructure and other assets. The Statement shows the impact of all these items on the Province’s holdings of cash and cash equivalents over the year.
  • Notes and schedules form an integral part of the Consolidated Financial Statements. They provide further information on the financial activities underlying the various statements, a summary of the Province’s significant accounting policies and discussion of expected upcoming changes to accounting standards.

Supporting Volumes

Volume 1 contains ministry statements and detailed schedules of debt and other items. The ministry statements compare actual expenses to the amounts appropriated by the Legislative Assembly, including those set out in the Estimates, Supplementary Estimates and annual Supply Act (as modified by any Treasury Board Orders), other statutes and any special warrants. 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 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 41 of this document.

original signed by original signed by original signed by

Scott Thompson

Greg Orencsak

Murray Lindo, CPA, CMA

Deputy Minister
Ministry of Finance

Deputy Minister, Treasury Board Secretariat and Secretary of Treasury Board and Management Board of Cabinet

Assistant Deputy Minister
and Provincial Controller
Treasury Board Secretariat

August 21, 2015

August 21, 2015

August 21, 2015



Table 1
2014–15 Actual results against 2014 Budget Plan
($ Billions)
Revenue 118.9 118.5 (0.4)
Programs 119.4 118.2 (1.2)
Interest on debt 11.0 10.6 (0.4)
Total Expense 130.4 128.8 (1.6)
Reserve 1.0 (1.0)
Annual Deficit (12.5) (10.3) (2.2)
Note: Budget and variance numbers may not add due to rounding.

The deficit for the 2014–15 fiscal year was $10.3 billion, an improvement of $2.2 billion from the $12.5 billion projection in the 2014 Budget.

The improvement over plan was due in large part to the Ontario government’s focus on managing growth in spending. Total spending for 2014–15 was $128.8 billion, against a planned $130.4 billion. This reflected savings across ministries and their agencies, as well as lower-than-projected interest expense. Over the past four years, the Province has held average annual growth in program spending to 1.4 per cent, less than the rate of inflation, while continuing to invest in priority programs and services like health care and education.

For 2014–15, revenues of $118.5 billion were slightly below the projection of $118.9 billion in the 2014 Budget. Despite the change from forecast, economic growth supported a 2.3 per cent increase in revenues from $115.9 billion in 2013–14. Real provincial gross domestic product (GDP) expanded by 2.2 per cent in 2014, slightly above the 2.1 per cent forecast in the 2014 Budget.

This report provides further details on results for 2014–15 and discusses five-year trends in key indicators of financial position.

It also discusses non-financial objectives in several priority areas for government, including:

  • Infrastructure investments;
  • Climate change initiatives;
  • Improving retirement security; and
  • Creating a fair society.

This report also outlines important initiatives to enhance transparency and accountability, and concludes with a comparison of interim results reported in the 2015 Budget to actual numbers reported in the Consolidated Financial Statements.


Table 2
Details of 2014–15 Actual results against Budget Plan1
($ Billions)
Taxation 83.4 82.3 (1.1)
Government of Canada 21.9 21.6 (0.3)
Income from government business enterprises 5.0 5.6 0.6
Other non-tax revenue 8.6 9.0 0.4
Total revenue 118.9 118.5 (0.4)
Health sector 50.1 50.0 0.0
Education sector2 24.8 24.6 (0.2)
Postsecondary and training sector 7.8 7.7 (0.2)
Children's and social services sector 15.0 14.7 (0.3)
Justice 4.3 4.3 0.1
Other programs 17.4 16.9 (0.5)
Total program expense 119.4 118.2 (1.2)
Interest on debt 11.0 10.6 (0.4)
Total Expense 130.4 128.8 (1.6)
Deficit before reserve (11.5) (10.3) (1.2)
Reserve 1.0 (1.0)
Annual Deficit (12.5) (10.3) (2.2)
1 Budget and variance numbers may not add due to rounding.
2 Teachers' Pension Plan expense is included in "Other programs." In the Consolidated Financial Statements, this expense item appears under the Ministry of Education. Schedule 4 to the financial statements provides details.


Provincial taxation revenue is closely tied to Ontario’s economic performance. In the 2014 calendar year, Ontario real GDP grew by a solid 2.2 per cent, driven by gains in external trade and consumer spending. This GDP result was slightly above the 2.1 per cent forecast for growth in the 2014 Budget, and much stronger than the 1.3 per cent achieved in 2013. The more robust growth was supported by the sharp decline in oil prices, a lower Canadian dollar and a strengthening U.S. economy.

In 2014–15, revenues increased by $2.6 billion, or 2.3 per cent, compared to 2013–14. Taxation revenue growth of 2.9 per cent, or $2.3 billion, was supported by 2014 nominal GDP growth of 3.6 per cent. Taxation revenues increased across most sources, partially offset by a $1.9 billion decrease in corporations tax reflecting one-time adjustments in respect of prior years. The combined net incomes of government business enterprises were also up $0.3 billion, or 5.2 per cent, from the previous year. Federal transfers declined by $0.7 billion, or 3.0 per cent, year to year, mainly because of a reduction in equalization payments, partially offset by increased health and social transfers. Other non-tax revenue increased by $0.7 billion, or 8.5 per cent, largely due to the gain on the sale of the Province’s remaining General Motors shares during 2014–15.

Revenue was slightly below projection, at $118.5 billion against a forecast $118.9 billion.

The below-forecast result was mainly due to lower 2013 corporate income tax assessments and higher refunds to corporations for years before 2009, resulting in a reduction of $697 million in expected corporations tax revenue. As well, a reduction of $248 million in sales tax revenues occurred due to revisions in Harmonized Sales Tax (HST) entitlement estimates.

Federal transfer payments were $267 million below plan mainly due to revised timelines for Building Canada Fund projects and lower transfers to government agencies, including Agricorp and Toronto 2015 Pan/Parapan American Games.

Below-plan performance in corporate and sales tax and federal transfers was offset to a significant degree by stronger performance from other revenue sources.

The combined net income of government business enterprises was $589 million above plan. This was mostly attributable to Ontario Power Generation Inc., reflecting its lower operating costs and better market performance of its nuclear funds.

An increase in other non-tax revenue of $443 million from plan was largely a result of a higher-than-targeted gain from unlocking the value of the Province’s assets through the sale of its remaining shares in General Motors Company, and higher recoveries of earlier-year spending from various ministries. As noted on page 34, the value of the gain from the sale of the General Motors shares has been dedicated to the Trillium Trust.


At $128.8 billion, total expense in 2014–15 was $1.6 billion lower than the 2014 Budget plan. Program spending was $118.2 billion, down from a planned $119.4 billion, largely reflecting the government’s ongoing focus on managing spending. For the sixth year in a row, program spending was lower than forecast. In addition, interest on debt expense was $375 million below plan.

Year over year, spending grew by 2.0 per cent. This reflected, in large part, increased utilization of major programs, such as physician services and drug benefits, as well as additional funding for the rollout of full-day kindergarten, community care and other social supports, such as social assistance and developmental services.

The 2014 Budget plan included two government-wide expense reduction targets, both of which were achieved: $250 million for program review and $1.1 billion for year-end expense reductions, for a total of $1.35 billion. The expected achievement of these targets was included in the planned program spending of $119.4 billion for 2014–15.

In addition to planned government-wide reduction targets of $1.35 billion, other expense reductions of $1.2 billion were also achieved, resulting in actual program expense of $118.2 billion, as shown in Table 2 and Chart 2. In total, these reductions amounted to $2.5 billion in 2014–15.

These additional expense reductions of $1.2 billion resulted from the following:

  • Children’s and social services sector expense was $303 million below forecast. This was due in large part to lower-than-expected take-up of low-income benefits such as Ontario Works and the Ontario Child Benefit.
  • In the food and agriculture sector, spending was $248 million lower than planned. The decrease was due in part to favourable growing conditions and stronger commodity prices that reduced required payments under weather-related programs.
  • Education sector expense was $212 million lower than projected, due mainly to lower-than-expected school board expense. The major factors were slightly lower-than-projected student enrolment and a higher share of funding spent on capital projects, as well as higher revenues from third parties that are netted against school board spending.
  • Postsecondary and training sector expense was $167 million lower than planned. Lower-than-forecast enrolment resulted in lower spending on university operating grants and student financial assistance. As well, spending on employment and training programs was below plan, partially offset by higher expense on tax credits to employers to support training.
  • Lower-than-forecast spending on business support programs and the Innovation Tax Credit were the main reasons for a decrease of $195 million from plan in economic development expenses.
  • Health sector expense was $42 million below plan. Lower spending in clinical education, as well as some other programs, was largely offset by increases in some program areas, including physician services, drug programs and hospital sector expenses.

Interest on debt expense was $375 million below plan, resulting mainly from lower-than-forecast interest rates, effective debt management to reduce associated costs and a one‐time gain from the sale of asset‐backed commercial paper that was written down in prior fiscal years.

Infrastructure investment

Infrastructure spending in 2014–15 was $12.8 billion. These investments are part of the government’s plan to invest more than $130 billion in infrastructure over the period from 2014–15 to 2023–24. Examples of the significant investments that are being made across the province in such priority areas as transportation and transit are discussed in the “Reporting on government priorities” section on page 28.

Table 3
Infrastructure expenditures, 2014–151
($ Billions)
Sector Investment in
Capital Assets2
Transfers and Other Infrastructure
Total Infrastructure
Transportation and transit 5.3 0.5 5.9
Health 3.2 0.4 3.6
Education 1.8 0.0 1.8
Postsecondary and training 0.4 0.2 0.5
Other sectors 0.4 0.6 1.0
Totals4 11.1 1.7 12.8
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 reductions and increases in values.
3 Mainly transfers for capital purposes to municipalities and universities and expenditures for capital repairs. These transfers are recorded as expenses in the Province's Consolidated Statement of Operations.
4 Includes third-party investments in consolidated entities such as hospitals, colleges and schools.

Total infrastructure spending for 2014–15 was lower than the $14.5 billion set out in the 2014 Budget plan, mainly due to lower-than-forecast construction activity.

The reserve

For planning purposes, a reserve is included in the planned surplus/deficit each year to guard against unforeseen revenue and expense changes that could have a negative impact on the Province’s fiscal performance. The 2014 Budget plan included a $1.0 billion reserve. Without the reserve, the actual deficit result of $10.3 billion would not have been affected.

Borrowing and financial position

The government completed an annual borrowing program of $39.8 billion in 2014–15. The total amount borrowed reflected a prudent approach to cash management. It included the $35.0 billion need that was forecast in the 2014 Budget and $4.8 billion of the government’s projected 2015–16 need. The pre-borrowing capitalized on continuing low interest rates and strong demand for Ontario bonds.

Net new financing totalled $19.2 billion. Net debt as of March 31, 2015, was $284.6 billion, $4.7 billion lower than forecast in the 2014 Budget.

Although lower by $375 million than forecast in the 2014 Budget, interest expense totalled $10.6 billion in 2014–15, an increase of $63 million from a year earlier. Eliminating the deficit is key to helping control growth in interest expense.

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 the Province’s tangible capital assets was $97.1 billion at the end of the 2014–15 fiscal year, up from $90.6 billion a year earlier.

The following table summarizes how the Province used its net new financing in 2014–15:

Table 4
Use of new financing by the Province, 2014–15
($ Billions)
Operating deficit and other transactions1 8.3
Cash invested in capital assets owned by the Province and its consolidated organizations, including hospitals, school boards and colleges2 11.1
Increase in the Province's cash and investments 0.8
Total 20.2
Increase in other long-term financing3 (1.0)
Net new financing 19.2
1 The Province's operating deficit of $10.3 billion offset by a net $2.0 billion in changes to assets and liabilities that provided cash for operating purposes. See the Consolidated Statement of Cash Flow.
2 New investments of $11.2 billion less proceeds of $0.1 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 4 to the Consolidated Financial Statements.

The Province’s net debt-to-GDP ratio was 39.5 per cent at the end of fiscal 2014–15, compared to the 40.3 per cent forecast in the 2014 Budget. The government continues to maintain a target of reducing the ratio of net debt to GDP to its pre-recession level of 27 per cent.

Net debt for 2014–15 included a one-time increase of $1.7 billion, reflecting the Province’s adoption of a new accounting standard for reporting environmental liabilities. See Note 7, Other Liabilities to the Consolidated Financial Statements. The change is also discussed in more detail on page 35 under “Accountability and transparency.”


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

For greater transparency and accountability, the Province last year expanded the number of indicators on which it reports. The measures it now reports, and the purpose of each, are as follows:

  • Composition of revenue by source: the extent to which the government is vulnerable to changes in external sources of revenue, like federal transfers, over which it has limited or no control. (See Chart 4.)
  • Composition of expense by sector: how total spending is divided among sectors; unusually fast growth in one sector may not be sustainable and may reduce flexibility in overall spending plans. (See Chart 5.)
  • Spending per capita and as a share of GDP: the degree to which government spending represents a claim on economic activity, which has an impact on
    a government’s fiscal flexibility and sustainability. (See Chart 6.)
  • Net debt to GDP and net debt per capita: a measure of the relationship between the government’s obligations and the size of the economy and population, which is another indicator of the government’s fiscal flexibility and sustainability. (See Chart 3 and Chart 7.)
  • Unhedged foreign currency exposure: the degree to which the government is vulnerable to fluctuations in foreign currencies. (See Chart 8.)

As well, last year the Province began providing an additional two years of historic data to help readers assess trends over a longer period. These enhancements reflect the Province’s commitment to ensuring its financial reports are readable and useful and support accountability.

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 over the past five years, 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. Although Ontario relies mainly on its own sources of revenue, it remains vulnerable to federal decisions that could, in many instances, result in volatility and uncertainty in the amount of federal transfers that Ontario receives.

Chart 5 shows the extent to which Ontario has been able to manage 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 moderated the year-over-year growth in health sector spending to 2.3 per cent in 2014–15. Before the transformation that started in 2012–13, the sector had been experiencing an average annual growth rate of about 6.0 per cent 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 2014–15, the annual growth rate in program spending has been held on average to 1.4 per cent.

Interest on debt expense has also been consistently below forecast, but has nonetheless grown gradually from 7.8 per cent of total spending in 2010–11 to the current level of 8.3 per cent.

As Chart 6 shows, Ontario’s program spending and interest costs have remained relatively stable on a per-capita basis since 2010–11, 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 Ontario’s economic growth, total spending to GDP has fallen from 19.3 per cent in 2010–11 to the current level of 17.9 per cent.

The Province’s accumulated deficit is basically the sum of all the deficits and surpluses it has incurred over time. There is also a small component that reflects unrealized gains/losses each year on Ontario Power Generation investments required under the Ontario Nuclear Funds Agreement. As well, in 2014–15 there was a one-time increase of $1.7 billion to reflect a new accounting policy for environmental liabilities.

Under Public Sector Accounting Board (PSAB) requirements, governments in Canada report both their accumulated deficit and their net debt. Net debt is calculated by subtracting financial assets from total liabilities. As Illustration 1 shows, another way of looking at this is that net debt equals tangible capital assets plus accumulated deficit.

As noted on page 16, in the “Borrowing and financial position” section, the ratio of net debt to GDP was 39.5 per cent at March 31, 2015.

Chart 7 looks at the growth of net debt per capita and its two components, described above. 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.

The stock of tangible capital assets, the other component of net debt, has risen because of significant investments in infrastructure. The value of tangible capital assets — including roads, transit systems, bridges, schools and hospitals — has risen from just over $5,000 per capita in 2010–11 to more than $7,000 per capita in 2014–15.

The majority of Ontario’s borrowings are in Canadian dollars. For example, in 2014–15, strong global investor demand for Canadian-dollar assets, the liquidity of Ontario benchmark bonds and continuing confidence in the Province allowed Ontario to borrow 79 per cent of its need in Canadian dollars. This was well above the target of at least 70 per cent set out in the 2014 Budget. The Province completed 82 per cent of its borrowing in Canadian dollars in 2013–14 and 72 per cent in 2012–13. At the peak of the global financial crisis in 2009–10, only 49 per cent of the Province’s bond issues were in Canadian dollars.

As a result of the increasing share of funds borrowed in Canadian dollars, only a small portion of outstanding debt is in other currencies. Borrowing in other currencies can make a government vulnerable to fluctuations in exchange rates if the exposure is not hedged.

The Province reduces its exposure by using currency swaps and foreign exchange forward contracts. 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. As a result, Ontario is protected from higher interest costs that would otherwise result from a decline in the value of the Canadian dollar.


Managing spending in 2014–15 underpins the government’s commitment to achieving a balanced budget by 2017–18. The plan to achieve balance by 2017–18, as set out in the 2015 Budget, projected a deficit of $8.5 billion for 2015–16, followed by a $4.8 billion deficit in 2016–17 and a return to balance the following year.

The Province’s plan to balance the budget builds on past success: in each fiscal year between 2010–11 and 2014–15, the government beat its annual deficit target.

There are four key elements in this strategy to balance the budget while continuing to make important investments:

  • Program Review, Renewal and Transformation;
  • Managing compensation costs;
  • Maintaining tax fairness and a level playing field for business; and
  • Strengthening government transparency, financial management and fiscal accountability.

Program Review, Renewal and Transformation

The 2014 Budget announced that the government was implementing an annual program savings target, and set this target at $250 million for 2014–15. The target was met through a number of initiatives that achieved the reductions while continuing to support front-line services.

The fall 2014 Ontario Economic Outlook and Fiscal Review announced Program Review, Renewal and Transformation (PRRT) as a key element of the government’s plan to achieve a balanced budget. A fundamentally new approach to multi-year planning and budgeting, PRRT is designed around four key principles:

  • Examining how every government dollar is spent;
  • Using evidence to inform better choices and improve outcomes;
  • Looking across government to find the best way to deliver services; and
  • Taking a multi-year approach to find opportunities to transform programs and achieve savings.

Led by the President of the Treasury Board, and supported by a sub-committee of Treasury Board/Management Board of Cabinet, PRRT is taking an across-government perspective and is identifying both short- and longer-term opportunities to transform programs and services. At the same time, the government is prepared to make tough choices to end programs that are not performing, do not link to key priorities or no longer serve a clear public interest.

The 2015 Budget outlined a series of initiatives identified through PRRT for 2015–16 and future years to improve outcomes while managing costs.

Managing compensation costs

Managing compensation costs is critical to balancing the budget, as more than half of government spending goes to salaries and benefits, including those of both the Ontario Public Service (OPS) and broader public sector (BPS). All public-sector partners must continue to work together to control current and future compensation costs.

Ontario’s existing fiscal framework does not include additional funding for wage increases, so any increases must be offset by other measures to create a net zero outcome over the life of the collective agreement. For example:

  • The government reached a new four-year agreement with the Association of Management, Administrative and Professional Crown Employees of Ontario in August 2014, which was estimated to produce savings of roughly $45 million in 2014–15. The agreement includes a wage freeze in the first two years and a 1.4 per cent increase in each of the third and fourth years. The wage increases in 2016 and 2017 were offset over the four-year term through changes to benefits and entitlements that are planned to result in a net zero outcome.
  • In the electricity sector, the Power Workers’ Union ratified agreements with Ontario Power Generation in May 2015 and Hydro One Inc. in July 2015. Both three-year agreements will achieve a net zero outcome.
  • The United Steelworkers and the Teamsters — Rail unions ratified agreements with the Ontario Northland Transportation Commission in March and July 2015 respectively. Both agreements are consistent with the net zero framework.

Since July 2012, the average annual negotiated wage increase across Ontario’s provincial public sector has been 0.7 per cent. This is lower than Ontario’s municipal public sector (1.9 per cent), the federal public sector in Ontario (1.7 per cent) and Ontario’s private sector (1.9 per cent).

The government has also taken steps to ensure executives at designated BPS organizations, which include hospitals, school boards, colleges, universities and other organizations, receive fair but reasonable compensation. The new Broader Public Sector Executive Compensation Act, 2014, allows the Province to set sector-specific compensation frameworks. These frameworks will consider all aspects of compensation, including benefits and hard caps on salaries, and will reflect consultation and extensive research. With significant compliance and enforcement measures, these new frameworks are intended to achieve better value for money while ensuring BPS organizations can attract and retain talented individuals.

Maintaining tax fairness and a level playing field for business

A fair and efficient tax system is critical to sustaining public services. The 2014 Budget noted that when businesses aggressively avoid or evade paying taxes, everyone else is left to make up the shortfall, putting the competitiveness of legitimate businesses at risk.

Since 2013–14, the Province has taken concrete measures to help ensure tax fairness and a level playing field for business. These include enhanced auditing and compliance activities through a multi-year agreement with the Canada Revenue Agency to address the underground economy and corporate tax avoidance in Ontario. The Province has also targeted areas at high risk of underground economic activity with pilot initiatives that focus on mitigating unfair and unsafe circumstances for Ontario’s workers and consumers.

In total, these and other efforts have generated an estimated $600 million in additional revenue for Ontario to date. The Province will build on these successful initiatives with new approaches to ensuring revenue integrity. It has, for example, made illegal the use, manufacture or distribution of electronic sales suppression technologies. These sophisticated technologies, known as “zappers,” are used by some businesses to conceal sales records, including the tax paid by consumers. Under the new measures, businesses that use zappers, as well as those that develop or sell the technology, will be subject to fines, imprisonment, or both.

Strengthening government transparency, financial management and fiscal accountability

The Province continues to strengthen its financial management, ensure clear and consistent accounting practices, enhance governance and accountability, and provide better data and information to the public through more channels. These are important elements in achieving its fiscal plan, delivering government programs and services efficiently and effectively, and reporting results clearly. More detail on this is provided under the section “Accountability and transparency,” beginning on page 34.


While continuing to work to achieve a balanced budget by 2017–18, the government is taking action in key areas including infrastructure, climate change, strengthening retirement security, and a fair society.

In 2014–15, the government took action on those priorities as follows.


Investing in infrastructure is a central pillar of the government’s economic plan. Modern infrastructure is essential for a well-functioning economy and prosperous society. It includes roads, bridges, public transit, hospitals, schools and water systems, all of which are important elements that together allow a strong economy and modern society to thrive.

Since 2003, the Province has invested more than $100 billion in public infrastructure. These investments, which align with Building Together, Ontario’s long-term infrastructure plan, are part of the government’s goal to make Ontario a safer, more competitive and more productive province.

The 2014 Budget announced a commitment to invest more than $130 billion in public infrastructure over 10 years. This included dedicating funds for Moving Ontario Forward, the government’s initiative to invest in bridges, transit, roads and other priority infrastructure across the province.

Also in the 2014 Budget, the government announced the creation of the Premier’s Advisory Council on Government Assets, chaired by Ed Clark, former Group President and Chief Executive Officer of TD Bank Group. The council was asked how to get the most out of key government assets to generate better returns and revenues for Ontarians.

The Council delivered its final recommendations on Hydro One to the Province in April 2015. These included a recommendation on broadening the ownership of Hydro One through an initial public offering of about 15 per cent of the common shares in Hydro One, with additional share sales in subsequent years. Over time, share offerings would total up to 60 per cent of the voting securities in Hydro One.

The setting of rates for Hydro One services would continue to be the responsibility of the independent regulator, the Ontario Energy Board, which already regulates both government-owned and private-sector companies in the energy sector.

The government has passed legislation that would allow the value of the net proceeds from the ownership changes to Hydro One to be dedicated to the Trillium Trust and be used to finance transit, transportation and other priority infrastructure projects across the province.

The 2015 Budget increased the planned total for Moving Ontario Forward by $2.6 billion to a total of $31.5 billion, to support investments of about $16 billion in transit projects in the Greater Toronto and Hamilton Area (GTHA) and about $15 billion in transportation and other priority projects outside the GTHA.

The Moving Ontario Forward funds are supporting such projects as:

  • The Regional Express Rail initiative, which will give people throughout the GTHA new travel options, with faster and more frequent GO rail service and electrification on core segments of the GO rail network.
  • New transit projects in Mississauga, Brampton and Hamilton.
  • The Ontario Community Infrastructure Fund, has been established to provide $100 million a year in funding for critical road, bridge, water and wastewater projects. In February 2015, the Province approved 78 projects through the application-based component to help municipalities maintain, repair, expand or update vital infrastructure.

Additional examples of transportation projects receiving funding from the Province include:

  • Ongoing light rail transit projects in Toronto, Ottawa and the Region of Waterloo.
  • The Right Honourable Herb Gray Parkway in Windsor–Essex, providing an express route to the country’s busiest land border crossing. An eight-kilometre stretch of the parkway opened to traffic in June 2015.
  • Four-laning an additional 13 kilometres of Highway 11/17 between Nipigon and Thunder Bay on the north shore of Lake Superior. The enhanced section of highway opened to traffic in the fall of 2014.

The Province is also supporting community and local infrastructure, for example with:

  • The largest infrastructure project associated with the 2015 Pan/Parapan American Games, the Athletes’ Village, which was home to about 10,000 athletes and officials during the Games. The village will now be transformed into a mixed-use neighbourhood with affordable housing, a new YMCA, health services and a residence for George Brown College students.

The Province is also investing in modern health care and learning infrastructure:

  • Across Ontario, roughly 40 major hospital projects are under construction or in various stages of planning; in the past year, eight major projects were completed.
  • In 2014–15, the Ministry of Education provided funding towards a total of 113 major capital projects that will result in 52 new schools, 40 additions and 21 major retrofits.
  • The Province also contributed funding to 14 capital projects at colleges and universities in 2014–15.

Climate change

Ontario is providing leadership on climate change through initiatives that are intended to support healthier, more livable communities and economic prosperity for present and future generations.

As part of achieving those goals:

  • Ontario is introducing a cap and trade program, which aims to effectively reduce the amount of greenhouse gas pollution in the atmosphere by setting a limit on emissions, rewarding innovative companies, and creating more opportunities for investment in Ontario. The Province has also joined 22 states and regions across the Americas in signing the first-ever Pan-American Climate Action Statement.
  • In 2014, Ontario ended coal-fired electricity generation, one of the largest climate change initiatives in North America to date, when Ontario Power Generation’s Thunder Bay Generating Station burned its last coal. The elimination of coal-fired generation is equivalent to taking up to seven million cars off the road.
  • Ontario’s greener diesel rules, among the strictest in North America, fight climate change and improve air quality by reducing greenhouse gas emissions and
    smog-causing pollutants in cars, trucks and boats. The new rules, being phased in over three years, came into effect April 1, 2014, and will be fully in place by 2017.

Strengthening retirement security

As first announced in the 2014 Budget and reiterated in the 2015 Budget, the government is committed to a new mandatory provincial pension plan — the Ontario Retirement Pension Plan (ORPP). The ORPP is intended to be a significant step forward in addressing the retirement savings challenge by helping Ontario workers build a secure retirement income foundation.

The goal of the ORPP is to strengthen Ontario’s retirement income system by creating a pension plan with a lifetime benefit and locked-in funds. It will be built on the principle of fairness, with mandatory matching employer contributions and ensuring that benefits earned are based on contributions made. As businesses and employees need time to adjust, a phase-in strategy will be established.

In April 2015, the Ontario Retirement Pension Plan Act, 2015, was passed by the Ontario legislature. This framework legislation established the ORPP and set out the plan’s basic requirements. In June 2015, the Ontario legislature also passed the Ontario Retirement Pension Plan Administration Corporation Act, 2015, which when proclaimed in force will enable the Province to establish an arm’s-length entity, the ORPP Administration Corporation. A Nominating Council has also been appointed to support the recruitment of a board.

In August 2015, the government released key plan design elements, including criteria for comparable plans and the ORPP phase-in strategy, where employers will be enrolled in four waves and contribution rates will be phased in over a three-year period. These elements were informed by consultations undertaken in the winter of 2014 as well as advice from actuarial and pension experts.

A fair society

A fair society is one in which all Ontarians have opportunities to realize their full potential and lead healthy and prosperous lives. It is built on good health care, reducing poverty and investing in education and skills training.

Health care

The government is committed to transforming Ontario’s health care system to become truly patient-centred and focused on better access, quality and value for all Ontarians. The transformation was launched in 2012, and Patients First: Action Plan for Health Care, which represents the next phase, was released in February 2015.

Actions in 2014–15 included:

  • Improving access to physiotherapy and other supports. As a result of changes in the delivery of physiotherapy services announced in April 2013, more seniors and eligible patients are able to access publicly funded physiotherapy, exercise and fall prevention services.
  • Better managing the care of patients with complex needs. Just five per cent of patients, many of them seniors, face multiple complex health issues and account for up to two-thirds of health care costs. As of March 31, 2015, there were 69 Health Links across Ontario, up from 54 a year ago. Health Links bring together patients, their families and health care providers to ensure coordinated, wrap-around services.
  • Increasing the hourly wage of personal support workers, who help seniors stay independent and support people with complex care needs. In addition to the wage increase, the government is providing on-the-job orientation and looking at how to better link these workers to health care teams.
  • Funding 30 innovative Community Paramedicine initiatives across Ontario to support independent living. Participating paramedics provide home visits to seniors and other high-risk patients, including frequent users of 911 services, on a non-emergency basis to help them with a range of services, including education about chronic disease management and assessment and referrals to local community supports. This support helps reduce unnecessary emergency department visits, hospital admissions and long-term care placements.
  • Providing more care for patients through interdisciplinary teams. More than 3.2 million Ontarians are now enrolled in Family Health Teams, including nearly 900,000 who previously did not have access to a designated primary care physician. These interdisciplinary teams care for patients in 206 communities across Ontario. Team members include physicians and such other health professionals as nurse practitioners, social workers, dietitians and pharmacists.
  • Addressing wait times. Ontario continued to receive straight A's from the Canada-wide Wait Time Alliance for performance in meeting targets in five priority areas. Current wait times are available at

Reducing poverty and homelessness

Since the launch of the initial Poverty Reduction Strategy in 2008, the government has taken a number of actions including the following:

  • In July 2015, the government enhanced the maximum amount of the Ontario Child Benefit (OCB) for each child to $1,336 annually and tied it to inflation. The OCB is an income-tested, non-taxable, provincial payment that is provided monthly to
    low- to moderate-income families.
  • In 2013 and 2014, Ontario implemented social assistance rate increases and provided top-ups for those with the lowest incomes, namely single adults without children receiving Ontario Works. These and other measures represent the first steps in addressing the recommendations of the Commission for the Review of Social Assistance in Ontario, chaired by Frances Lankin and Munir Sheikh.
  • In August 2014, the government announced an additional $42 million in annual funding for the Community Homelessness Prevention Initiative. This initiative consolidates five formerly separate housing and homelessness programs into a single, more flexible and locally coordinated program, administered by municipal service managers, that is intended to provide better results for vulnerable people.

In September 2014, the government launched its second Poverty Reduction Strategy. Through the strategy’s four pillars, the Province is moving forward on this initiative to:

  • Break the cycle of poverty for children and youth;
  • Move towards greater employment and income security;
  • End homelessness and invest in affordable housing; and
  • Use evidence to develop policy and measure success.

Education and skills training

Ontario’s publicly funded early years and education system is recognized as one of the best in the world.1 It is focused on ensuring Ontarians have the education and skills needed to lead in the global economy.

Actions in 2014–15 included:

  • Improving child care. The Child Care Modernization Act, 2014, in force as of August 31, 2015, is intended to strengthen oversight of the province’s unlicensed and licensed child care sector and increase access to licensed child care options for families. In addition, it will allow the Province to immediately shut down a provider when a child’s safety is at risk. The Province is also enhancing wages for eligible child care workers in the licensed child care sector.
  • Making full-day kindergarten available to all four- and five-year-olds in Ontario as of September 2014. Almost half a million students have enrolled in full-day kindergarten since its introduction in September 2010.
  • Improving learning outcomes. In 2014, 72 per cent of Grades 3 and 6 students met or exceeded the provincial standard (a “B” grade) in assessments of student performance in reading, writing and mathematics carried out by the Education Quality and Accountability Office. This is an increase of 18 percentage points from 54 per cent in 2003. The Office provides detailed results at
  • Graduating more students. In 2014, 84 per cent of students graduated from high school, compared to just 68 per cent in 2004 — a 16 percentage point increase.
  • Encouraging increases in postsecondary enrolment and other opportunities. In 2014–15, more than 177,000 additional students were enrolled at Ontario colleges and universities as compared to 2002–03. The number of graduate students at Ontario universities has increased by 60 per cent over the same period. New annual apprenticeship registrations have increased from 17,100 in 2002–03 to more than 26,500 in 2014–15.


In the April 2015 C.D. Howe Institute commentary on fiscal accountability of Canadian senior governments, Ontario again received a grade of “A” which reflects Ontario being ranked among the best in overall quality of reporting on its financial results. As the commentary noted: “A major aim of this report is to celebrate the relatively transparent reporting found in New Brunswick and Saskatchewan, and in Ontario and Ottawa, and encourage other jurisdictions to raise their game.”2

In 2014–15, the government continued to take action to improve overall accountability and transparency. These actions are reflected below, along with an update on key changes to accounting standards.

Trillium Trust

In March 2015, legislation creating the Trillium Trust framework came into force. The framework provides for the dedication of net proceeds from the sale of qualifying assets to help support key infrastructure priorities, such as those set out in the Province’s Moving Ontario Forward plan. Priorities for Moving Ontario Forward, which is discussed in more detail on page 29, include roads, bridges and public transit.

Volume 1 of the Public Accounts reports all revenues and expenditures to and from the Consolidated Revenue Fund. A new schedule in Volume 1 reports revenues allocated for the Trillium Trust.

Volume 1 shows that $1.35 billion was available for the Trillium Trust at March 31, 2015, to help fund investments. This reflects the sale of the Province’s remaining common shares in General Motors in early 2015, combined with the net proceeds of a previous sale and preferred share redemption. The net proceeds of broadening the ownership of Hydro One would also be dedicated to the Trillium Trust.

Open Government

In an increasingly interconnected world, governments must find new ways to inform and engage the people they represent. The aim of Ontario’s plan for Open Government is to develop stronger policies and more responsive services by engaging a broader, more diverse range of Ontarians. Improving access to government data and information can also help businesses grow, spur innovation and solve problems that affect people in their everyday lives.

For the first time, the government is providing some of its Public Accounts information online in a more visual and user-friendly format.

Agency and broader public sector oversight

The new Public Sector and MPP Accountability and Transparency Act, 2014, was passed to strengthen accountability across the OPS, agencies and the BPS. It also includes a number of measures to enhance the powers of legislative offices. The government is implementing schedules of the Act in 2015–16.

Provincial agencies must now post their executive expenses and key governance documents online, including Memoranda of Understanding and business plans. These documents can be found through In addition, beginning next year, provincial agency chairs and chief executive officers will need to attest to their responsible minister that their organizations fully comply with applicable government legislation, regulations and directives.

The government also intends to modernize and improve oversight over transfer payments to service delivery partners, including hospitals, schools, municipalities and others that carry out work on behalf of the Province. It is putting in place more common processes, for example for registration, streamlining reporting practices and introducing simpler technology. This is intended to result in less time spent on administration and more time spent on delivering services to Ontarians.

Accounting standards

Environmental liabilities

Environmental cleanup is often linked to past industrial activities. Under the authority of the Environmental Protection Act, the Province can order those responsible for the contamination to clean up the site. If required, the Province may step in to undertake the cleanup, recovering the costs where possible. Any funds recovered are offset against the Province’s liability for the site.

In the past, the Province has reported financial liabilities based on its obligations resulting from federal legislation. In line with a new standard issued by PSAB on accounting for contaminated land, the government now also considers its own legislation when reporting liabilities. The new standard is reflected in these Public Accounts.

Under the new standard for 2014–15, the year of transition, the government has reported the incremental liability as a $1.7 billion increase in its accumulated deficit in the Consolidated Financial Statements.

Financial instruments

Financial instruments are contracts that allow organizations to manage their exposure to foreign currency and interest rate risk. As more governments and government organizations use financial instruments, and as the transactions have become more complex, PSAB has recognized the need to provide a public-sector accounting standard for the presentation of instruments in financial statements, so that readers can judge the impact on the issuer’s financial position. To that end, it drafted a new accounting standard on financial instruments.

In 2015, PSAB extended the effective date of the new standard to April 1, 2019, from April 1, 2016, for senior governments, to allow for further study of reporting options for complex financial instruments. The Province will continue to work with PSAB on ensuring that the new policy allows financial reporting for governments and their organizations that supports transparency and accountability.

Rate-regulated accounting

The PSAB directs government business enterprises to follow accounting standards that apply to publicly accountable enterprises. In December 2009, the Accounting Standards Board required publicly accountable enterprises to adopt International Financial Reporting Standards (IFRS) with fiscal years beginning on or after January 1, 2011.

At that time, rate-regulated entities expressed concerns about the impact of the change on the reporting of their results, as IFRS did not provide guidance on rate-regulated accounting. In response, the Accounting Standards Board extended the implementation date to January 1, 2015.

The International Accounting Standards Board, which is responsible for IFRS, is undertaking a comprehensive project on accounting requirements related to rate regulation. In the meantime, it issued an interim, limited scope standard on regulatory deferral accounts in 2014 that is effective for fiscal years beginning on or after January 1, 2016, with early adoption permitted. The purpose was to help manage the financial impact on rate-regulated entities as they made the transition to IFRS.

Despite the uncertainty around the final outcome of the project as a whole, the Accounting Standards Board maintained its implementation date of January 1, 2015.

Because the reporting periods of Hydro One and Ontario Power Generation differ from that of the Province, any change in their reporting as a result of having to adopt the new standard would need to be reflected in the Public Accounts of Ontario 2015–2016.


The Province provided interim estimates of results for 2014–15 in the 2015 Budget. The interim deficit projection was $10.9 billion, while the actual deficit figure reported for the year is $10.3 billion. Table 5 outlines the major variances between the interim and actual results.

Table 5
Comparison of 2014–15 interim and actual results
($ Billions)
Taxation 82.7 82.3 (0.4)
Government of Canada 21.7 21.6 (0.1)
Income from government business enterprises 5.3 5.6 0.3
Other non-tax revenue 8.8 9.0 0.2
Total Revenue 118.5 118.5 0.0
Programs 118.8 118.2 (0.5)
Interest on debt 10.7 10.6 (0.1)
Total expense 129.5 128.8 (0.6)
Annual deficit (10.9) (10.3) (0.6)
Note: Interim and related variance figures may not add due to rounding.

The further improvement of $618 million from interim results was due mainly to additional expense reductions that were reported after the 2015 Budget estimate was prepared. These reductions were realized across ministries, agencies and consolidated organizations. The final figure for interest expense also improved slightly from the estimate at the time of the 2015 Budget.

The revenue results were essentially unchanged between interim and actual. As more information about results for the year became available, higher reported income from government business enterprises and other sources was offset by lower-than-projected taxation revenues.


[1] “The Great Schools Revolution,” The Economist (September 17, 2011).

[2] William B. P. Robson and Colin Busby, “By the Numbers: The Fiscal Accountability of Canada’s Senior Governments, 2015,” C.D Howe Institute Commentary 2015, issue 424.

Image Descriptions:

Chart 1: Share of revenue by sources, 2014–15

This chart shows the percentage composition of Ontario’s revenue in 2014–15, by revenue category.  Total revenue is $118.5 billion. The largest taxation revenue source is Personal Income Tax revenue at $29.3 billion, accounting for 24.7 per cent of total revenue. This is followed by Sales Tax at $21.7 billion, or 18.3 per cent of total revenue, and Corporations Tax at $9.6 billion, or 8.1 per cent of total revenue. Total taxation revenue accounts for $82.3 billion, or 69.4 per cent of total revenue. The other major non-taxation sources of revenue are Federal Transfers of $21.6 billion, or 18.2 per cent of total revenue, Income from Government Business Enterprises at $5.6 billion, or 4.7 per cent of total revenue and various Other Non-Tax Revenues at $9.0 billion, or 7.6 per cent of total revenue.

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Chart 2: Share of program expense by sector, 2014–15

This chart shows the share of program expense in 2014–15 by sector. Program expense equals total expense minus interest on debt expense.

The largest expense is the Health Sector, accounting for 42.3 per cent of total program expense.

The remaining sectors of program expense include the Education Sector at 20.8 per cent; the Children’s and Social Services Sector at 12.4 per cent; the Postsecondary Education and Training Sector at 6.5 per cent; the Justice Sector at 3.7 per cent; and Other Programs at 14.3 per cent.

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

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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 (actual to 2014-15 and projected to 2017-18). The net debt-to-GDP is projected to peak at 39.9 per cent in 2015–16 and 2016-17.

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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 2010–11 to 2014–15.

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Chart 5: Composition of expense 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 2010­–11 to 2014–15.

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

From 2010–11 to 2014–15, this bar graph shows Ontario’s spending on programs and interest on debt on a per-capita basis has remained relatively stable, with total expenses as a share of GDP gradually decreasing.

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

This illustration shows the two ways in which the Province’s net debt can be presented.  The first bar shows that the Province’s accumulated deficit plus its tangible capital assets equal its net debt. The second bar shows that Net debt also equals total liabilities less financial assets.

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Chart 7: Net debt per capita and its components

This bar graph shows net debt per capita growing from 2010–11 to 2014–15 due to the growth in its two components, tangible capital assets and accumulated deficit.

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Chart 8: Unhedged foreign currency exposure (vs 5% exposure limit)

This bar graph shows the Province’s unhedged foreign currency exposure has been well below the 5% exposure limit from 2010­–11 to 2014–15.

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Chart 9: Ontario’s plan to balance the budget

This bar chart shows Ontario’s plan to balance the budget for 2014–15 through to 2017–18. The actual budget deficit for 2014–15 is $10.3 billion, an improvement of $2.2 billion compared to the $12.5 billion deficit forecast in the 2014 Budget. The 2015 Budget outlined projected deficits of $8.5 billion for 2015–16, $4.8 billion for 2016–17 and a return to balance for 2017–18.

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