Chapter 2: Fiscal Update

Introduction

At the time of publishing the March 2020 Economic and Fiscal Update, global economic conditions remain uncertain as a result of the COVID‑19 outbreak.

This fiscal update incorporates immediate measures taken by the government in order to respond to the COVID‑19 outbreak, including additional health care resources and contingencies, and direct support for people and jobs.

The government’s plan also includes higher-than-usual reserve and contingency funds as a measure of prudence to protect against additional unforeseen adverse changes to revenue and expense.

The Province is actively monitoring risks — working with its partners and other levels of government in a coordinated fashion to mitigate impacts — and through its prudent planning, there exists fiscal flexibility to respond as conditions evolve.

Ontario’s Fiscal Plan

The government is projecting a deficit of $9.2 billion in 2019–20, which represents an improvement of $1.1 billion relative to the 2019 Budget.

As a result of the response to the COVID‑19 outbreak, the government is planning for a deficit of $20.5 billion in 2020–21.

Net debt-to-GDP is forecast to be 39.9 per cent in 2019–20, lower than the 40.7 per cent forecast in the 2019 Budget and is projected to increase to 41.7 per cent by 2020–21.

Table 2.1
Ontario’s Fiscal Plan
($ Billions)
  Actual
2018–19
Interim1
2019–20
Plan
2020–21
Revenue 153.7 156.7 156.3
Expense — Programs 148.8 153.1 161.1
Expense — Interest on Debt 12.4 12.6 13.2
Total Expense 161.1 165.7 174.3
Surplus/(Deficit) Before Reserve (7.4) (9.0) (18.0)
Reserve 0.2 2.5
Surplus/(Deficit) (7.4) (9.2) (20.5)
Net Debt as a Per Cent of GDP 39.5% 39.9% 41.7%
Accumulated Deficit as a Per Cent of GDP 25.3% 25.3% 26.8%

[1] Interim represents the March 2020 Economic and Fiscal Update projection for the 2019–20 fiscal year.

Note: Numbers may not add due to rounding.

Sources: Ontario Ministry of Finance and Treasury Board Secretariat.

Details of Revenue

2019–20 Revenue Performance

Total revenue in 2019–20 is estimated to be about $2.6 billion higher than projected in the 2019 Budget. The estimates are based on revenue information available to March 18, 2020. Information arriving subsequent to this date will be reflected in future updates, including the Public Accounts of Ontario 2019–2020.

Table 2.2
Summary of 2019–20 Revenue Changes since the 2019 Budget
($ Millions)
  Interim1
2019–20
2019 Budget Total Revenue 154,165
Taxation Revenue — Sales Tax 1,056
Taxation Revenue — Personal Income Tax 1,028
Taxation Revenue — Corporations Tax 256
Taxation Revenue — Education Property Tax 128
Taxation Revenue — Land Transfer Tax 87
Taxation Revenue — All Other Taxes Combined (33)
Total Taxation Revenue 2,522
Government of Canada — Canada Health Transfer 186
Government of Canada — Infrastructure (397)
Government of Canada — All Other Federal Transfers Combined 169
Total Government of Canada (42)
Total Income from Government Business Enterprises (86)
Total Other Non-Tax Revenue 172
Total Revenue Changes since the 2019 Budget 2,566
March 2020 Economic and Fiscal Update Total Revenue 156,731

[1] Interim represents the March 2020 Economic and Fiscal Update projection for the 2019–20 fiscal year.

Note: Numbers may not add due to rounding.

Source: Ontario Ministry of Finance.

Highlights of changes to estimated 2019–20 revenue compared to the 2019 Budget forecast are as follows:

  • Sales Tax revenue is $1,056 million higher reflecting revised federal Harmonized Sales Tax (HST) entitlement updates for years up to and including 2020, mainly driven by higher 2018 amounts.
  • Personal Income Tax revenue increased by $1,028 million due to higher amounts from processing of 2018 and prior-year tax returns and stronger growth in employment and incomes in 2019.
  • Corporations Tax revenue increased by $256 million due to higher amounts from processing of 2018 and prior year tax returns, partially offset by lower corporate profits in 2019 and 2020.
  • Education Property Tax revenue is $128 million higher reflecting lower-than-anticipated revenue losses due to assessment appeals.
  • Land Transfer Tax revenue is $87 million higher reflecting stronger home resales.
  • All Other Taxes Combined are $33 million lower mainly due to revenues from Beer, Wine and Spirits Taxes, Gasoline Tax, Tobacco Tax and Employer Health Tax (EHT), partially offset by higher revenues from the Ontario Health Premium. This includes the 2019–20 impact of the government’s proposal to increase the EHT exemption to $1 million in 2020 to provide relief for employers in response to the COVID‑19 outbreak. See Annex: Details of Tax Measures for more information.
  • Canada Health Transfer revenues are higher by $186 million mainly due to $194 million in additional federal funding for critical health care system needs and to support mitigation efforts of the COVID‑19 outbreak.
  • Government of Canada revenues for funding infrastructure projects are lower by $397 million due to revised project timelines.
  • One-time funding from the Low Carbon Economy Leadership Fund of $169 million increased revenues from All Other Federal Transfers Combined.
  • Net Income from Government Business Enterprises is down $86 million mainly arising from lower-than-anticipated net income from the Ontario Lottery and Gaming Corporation (OLG), largely due to revenue from casinos.
  • Other Non-Tax Revenue Combined is higher by $172 million, mainly due to an increase in other fees, licences and permits, and miscellaneous revenues from consolidated government agencies.

2020–21 Revenue Outlook

The revenue forecast for 2020–21 is projected to be $156.3 billion, representing a decrease of $0.5 billion relative to the 2019–20 interim estimate.

Table 2.3
Summary of the Revenue Outlook
($ Billions)
  Actual
2018–19
Interim1
2019–20
Plan
2020–21
Revenue — Personal Income Tax 35.4 37.6 37.3
Revenue — Sales Tax 27.8 29.1 29.1
Revenue — Corporations Tax 16.6 15.4 15.2
Revenue — Ontario Health Premium 3.8 4.1 4.1
Revenue — Education Property Tax 6.2 6.2 6.3
Revenue — All Other Taxes 15.7 16.2 16.3
Total Taxation Revenue 105.5 108.7 108.2
Government of Canada 25.1 25.4 26.3
Income from Government Business Enterprises 5.5 5.7 4.1
Other Non-Tax Revenue 17.6 16.9 17.6
March 2020 Economic and Fiscal Update Total Revenue 153.7 156.7 156.3

[1] Interim represents the March 2020 Economic and Fiscal Update projection for the 2019–20 fiscal year.

Note: Numbers may not add due to rounding.

Source: Ontario Ministry of Finance.

The taxation revenue forecast reflects the current economic planning assumptions and the impacts of government policy commitments. Taxation revenue is projected to decrease 0.4 per cent in 2020–21, lower than the projected pace of nominal GDP growth of 2.0 per cent in 2020. This represents reasonable assumptions regarding revenue growth based on past experience in periods when there was a sudden slowdown in economic activity.

Personal Income Tax (PIT) revenue is projected to decline by 0.8 per cent. This is partly due to one-time revenue of $0.5 billion recognized in 2019–20 related to revised estimates of revenues earned in prior years.

The Sales Tax revenue projection is based primarily on the outlook for consumer spending. Sales Tax revenue is projected to decline 0.2 per cent in 2020–21, mainly due to $1.0 billion of one-time revenue recognized in 2019–20 related to revised entitlement estimates earned in prior years.

The forecast for Corporations Tax revenue is projected to decline 1.7 per cent in 2020–21. The forecast reflects a modest decline of 2.4 per cent in the corporate operating surplus. Recent government tax cuts including the accelerated write-off of capital investments, reducing the small business tax rate from 3.5 per cent to 3.2 per cent and not paralleling the federal government in phasing out the small business deduction are reflected in the revenue forecast, as well as the proposed Regional Opportunities Investment Tax Credit.

The Ontario Health Premium revenue forecast is based primarily on the projected growth in the compensation of employees. Ontario Health Premium revenue is projected to increase 0.8 per cent in 2020–21.

Education Property Tax revenue is projected to increase 0.9 per cent in 2020–21, reflecting the additions to the property assessment base as a result of new construction activities.

Revenues from All Other Taxes combined are projected to increase 0.4 per cent in 2020–21. This includes higher revenues expected from Land Transfer Tax and Beer, Wine and Spirits Taxes. The outlook includes tax measures to provide tax relief to businesses, including those negatively impacted by the COVID‑19 outbreak. See Annex: Details of Tax Measures for more information.

The forecast for Government of Canada transfers is based on existing federal–provincial funding agreements and formulas, including the Canada Health Transfer, Canada Social Transfer, funding for labour market programs and Canada-Ontario Community Housing Initiatives.

The outlook for Income from Government Business Enterprises (GBEs) is based on Ontario Ministry of Finance estimates for Hydro One Ltd. and projections provided by Ontario Power Generation (OPG), the Ontario Cannabis Store (OCS), the Liquor Control Board of Ontario (LCBO) and the Ontario Lottery and Gaming Corporation (OLG). Revenues from GBEs are projected to decline from $5.7 billion to $4.1 billion between 2019–20 and 2020–21, mainly due to the expected impact of weaker economic conditions and the COVID‑19 outbreak on OLG income from casinos.

The forecast for Other Non-Tax Revenue is based on projections provided by government ministries and Provincial agencies. The outlook for Other Non-Tax revenues is projected to change from $16.9 billion in 2019–20 to $17.6 billion in 2020–21.

Changes since the 2019 Budget

Projected 2020–21 revenues are $3.5 billion lower than at the time of the 2019 Budget. The estimated overall impact on revenues of the COVID‑19 outbreak is about $5.8 billion in 2020–21.

Chart 2.1: Estimated Revenue Impact of the COVID-19 Outbreak
Accessible description of Chart 2.1

Risks to the Revenue Outlook

There are a variety of risks to the economic planning assumptions underlying the revenue forecast. As outlined in Chapter 1: Economic Update, global economic risks are elevated due to the adverse impact of the COVID‑19 outbreak. Table 2.4 highlights some of the key sensitivities and risks to the fiscal plan that could arise from unexpected changes in economic conditions. These estimates are only guidelines; actual results will vary depending on the composition and interaction of various factors. The risks identified are based on average long-term relationships that could have the most material impact on the largest revenue sources.

Table 2.4
Selected Economic and Revenue Risks and Sensitivities
Economic Factors Revenue Sources 2020–21 Sensitivities
Nominal GDP Total Taxation Revenue $700 million revenue change for each percentage point change in nominal GDP growth. Can vary significantly, depending on the composition and source of changes in GDP growth.
Compensation of Employees Personal Income Tax, Ontario Health Premium and Employer Health Tax $440 million revenue change for each percentage point change in growth in compensation of employees.
Household Consumption Expenditures Harmonized Sales Tax $197 million revenue change for each percentage point change in growth of household consumption expenditures.
Net Operating Surplus of Corporations Corporations Tax $100 million revenue change for each percentage point change in growth of net corporations operating surplus.
Housing Resales and Resale Prices Land Transfer Tax $29 million revenue change for each percentage point change in growth of either the number or prices of housing resales.
Ontario Population Share Canada Health Transfer $42 million revenue change for each one‑tenth of a percentage point change in Ontario’s population share.
Ontario Population Share Canada Social Transfer $15 million revenue change for each one‑tenth of a percentage point change in Ontario’s population share.

Source: Ontario Ministry of Finance.

The variance from the interim revenue published in the Budget plan to actual revenue published in the Public Accounts is usually small. For example, on average, over the 1993–94 and 2018–19 periods, there was a positive 0.2 per cent change in total revenue. Although the average total revenue variance is relatively small, in any given year, it can be larger as new information on revenues arrives, notably tax return processing from the preceding year.

Since 1993–94, on average, the Province experienced a positive 1.3 per cent variance from the Budget plan to actual for total revenue. Although the average total revenue variance is relatively small, in any given year, the variance can be fairly large, ranging from a high of 7.2 per cent in 1999–2000 to a low of -7.1 per cent in 2003–04.

Details of Expense

Expense Outlook

In addition to the immediate resources to respond to the COVID‑19 outbreak, the government is making additional investments in critical programs and services. Compared to the outlook presented in the 2019 Budget, program expense is projected to be higher by $3.0 billion in 2019–20 and $9.1 billion in 2020–21.

Table 2.5
Summary of Changes to the Expense Outlook since the 2019 Budget
($ Billions)
  Interim1
2019–20
Plan
2020–21
2019 Budget Total Expense2 163.4 165.6
Program Expense Changes since the 2019 Budget — Health Sector 0.9 3.3
Program Expense Changes since the 2019 Budget — Education Sector3 0.1 0.5
Program Expense Changes since the 2019 Budget — Postsecondary Education Sector 0.0 0.1
Program Expense Changes since the 2019 Budget — Children’s and Social Services Sector 0.8 1.2
Program Expense Changes since the 2019 Budget — Justice Sector 0.2 0.3
Program Expense Changes since the 2019 Budget — Other Programs 1.1 3.7
Total Program Expense Changes 3.0 9.1
Change in Interest on Debt (0.7) (0.5)
Total Expense Changes since the 2019 Budget 2.3 8.7
March 2020 Economic and Fiscal Update Total Expense 165.7 174.3

[1] Interim represents the March 2020 Economic and Fiscal Update projection for the 2019–20 fiscal year.

[2] The 2019 Budget expense outlook has been restated for reclassification and program transfer changes. These changes are fiscally neutral. For details see Table 2.6 in the Improved Transparency in Financial Reporting section.

[3] Excludes changes to the Teachers’ Pension Plan. Teachers’ Pension Plan expense changes are included in Other Programs.

Note: Numbers may not add due to rounding.

Sources: Ontario Ministry of Finance and Treasury Board Secretariat.

The expense outlook is higher compared to the 2019 Budget mainly because:

  • Health sector expense is projected to increase by a further $0.9 billion in 2019–20 and $3.3 billion in 2020–21 primarily due to funding to respond to the COVID‑19 outbreak and investments in the hospital sector, utilization changes for physician and other services under the Ontario Health Insurance Plan (OHIP), community-based health care services to address hallway health care and build a connected and sustainable health care system. Key initiatives include:
    • Health care investments to protect people and equip Ontario’s health care professionals with the resources they need to address the COVID‑19 outbreak, including:
      • New acute and critical care beds and 25 assessment centres at hospitals;
      • Providing personal protective equipment and other critical medical supplies to staff working on the front line;
      • Increasing emergency capacity in long-term care homes to assist in COVID‑19 prevention and containment efforts of affected residents, and to assist in relieving pressures in hospitals;
      • Providing public health units with additional resources to continue efforts to identify and contain COVID‑19 including increasing capacity for home and laboratory testing;
      • Enhancing community capacity for patients in retirement homes and assisted living facilities, so hospitals can focus on providing care for complex COVID‑19 patients requiring hospitalization; and
      • A COVID‑19 health sector response contingency fund of $1.0 billion for any emerging needs to support the Province’s timely response to the outbreak.
    • An across-the-board increase for all public hospitals, and operating funding for newly opened beds and facility expansions to help hospitals meet the challenges of a growing population, increase access to highly specialized and innovative treatments and to tackle hallway health care;
    • Annualized investments in small‐ and medium‐sized and multi-site hospitals to help address hallway health care;
    • Targeted investments beginning in 2020–21 to build hospital and community capacity in Durham, Scarborough and London — three regions with among the highest levels of hallway health care;
    • Additional investments to improve the quality of care and resident experience, and address recommendations from the Public Inquiry into the Safety and Security of Residents in the Long‑Term Care Homes System; and
    • Continued investment in municipal land ambulance operations to improve coordination and enhance patient care.
  • Education sector expense is projected to increase by $0.1 billion in 2019–20 and $0.5 billion in 2020–21 primarily due to increased funding for school boards to support higher student enrolment and investments in child care programs. Key initiatives include:
    • Funding to support elementary and secondary education programs through the Priorities and Partnership Fund;
    • Funding for student transportation;
    • Supporting student mental health, including providing $25 million in permanent funding for approximately 180 mental health workers in secondary schools to better serve students with mild to moderate mental health issues;
    • Focusing on priority areas including Science, Technology, Engineering and Math (STEM);
    • Providing additional opportunities for students to focus on a career path that matches their skills and interests through the expansion of programs, such as the Specialist High Skill Majors; and
    • Funding to reflect a one per cent annual increase to compensation costs for teachers and education sector workers.
  • Postsecondary Education sector expense is projected to remain largely unchanged in 2019–20 and increase by $0.1 billion in 2020–21. The government is making sustained investments in Ontario’s universities and colleges, and student financial assistance. Key initiatives include:
    • Temporarily deferring loan payments and interest accrual for six months for Ontario Student Assistance Program (OSAP) borrowers to ease the financial burden on students during the COVID‑19 outbreak;
    • Increased funding to institutions to support the expansion of Masters degrees and PhD spaces;
    • Continued support for students, through initiatives, such as the expansion of the Campus Safety Grant and additional support for students with disabilities; and
    • Increases in capital expense related to renewal funding for postsecondary infrastructure.
  • Children’s and Social Services sector expense is projected to increase by $0.8 billion in 2019–20 and $1.2 billion in 2020–21 primarily due to additional supports for people facing economic hardship during the COVID‑19 outbreak, investments in the Ontario Autism Program, social assistance, developmental services and child welfare, and additional investments to support children with physical and/or developmental disabilities. Key initiatives include:
    • Investments to support people and respond to the COVID‑19 outbreak such as:
      • Expanding access to temporary emergency assistance for people in financial need with no access to financial support and simplifying the application process to help people quickly;
      • Covering outbreak-related costs, such as food, shelter and medical supplies for social assistance recipients; and
      • Enhancing supports for residential facilities, including in developmental services, programs supporting survivors of domestic violence and protective care for children and youth.
    • Annual funding of $600 million for the Ontario Autism Program;
    • A strategy to combat human trafficking, including building public awareness, intervening early and supporting survivors;
    • Special Services at Home program to support approximately 4,700 more children with developmental and/or physical disabilities and their families in 2020–21; and
    • Developmental services, child welfare and other programs to help vulnerable populations.
  • Justice sector expense is projected to increase by $0.2 billion in 2019–20 and $0.3 billion in 2020–21 primarily due to compensation costs for the Ontario Provincial Police (OPP), correctional services staff, provincial government lawyers and judicial officers. Other key initiatives include:
    • Services that help front-line staff experiencing post-traumatic stress disorder;
    • Hiring additional OPP officers and correctional services staff to support efficient and high‑quality policing services and keeping correctional institutions safe;
    • Obligations to support payments related to OPP operations and the Crown Liabilities and Proceedings Act, 2019;
    • Providing additional resources to combat human trafficking in Ontario; and
    • Investments to maintain stability in the justice system and to ensure ongoing service operations in response to the COVID‑19 outbreak.
  • Other Programs sector expense is projected to increase by $1.1 billion in 2019–20 and $3.7 billion in 2020–21, primarily due to:
    • Investments to respond to the COVID‑19 outbreak and provide direct support for people and the economy, while protecting jobs and making life more affordable for families including:
      • Proposing to double the Guaranteed Annual Income System (GAINS) payment for six months for low-income seniors. This increase would provide immediate additional financial support to vulnerable seniors who may need additional support to cover essential expenses during the COVID‑19 outbreak;
      • Helping to address seniors’ isolation by coordinating the delivery of meals and other essentials;
      • Providing retirement homes with additional funding to implement infection control and active screening measures to protect residents;
      • Assisting municipalities and other service providers so they can respond quickly to local needs associated with the COVID‑19 outbreak;
      • Taking measures to maintain housing stability by enhancing existing programs delivered by local service managers to help people at risk of homelessness;
      • Providing supports for Indigenous peoples and communities, including emergency assistance for urban Indigenous people in financial need, transportation costs for health care professionals and critical supplies to remote First Nations, and funding to address emergency planning and self-isolation needs for people in First Nation communities;
      • Supporting workers through additional funding for skills training programs;
      • Additional funding to address pressures in electricity cost relief programs, including the cost of the new Ontario Electricity Rebate for eligible residential, farm and small business consumers. This rebate ensures that electricity bills for an average residential consumer are kept more affordable;
      • An investment in the Municipal Modernization Program to support 405 small and rural municipalities invest in service delivery reviews and projects aimed at increasing municipal efficiency, and funding for disaster relief assistance; and
      • Additional funding for maintenance work to keep Ontario’s highways safe and reliable.

Contingency funds are maintained to help mitigate expense risks that may otherwise adversely affect Ontario’s fiscal performance.

Interest on Debt is projected to be lower by $0.7 billion in 2019–20 and $0.5 billion in 2020–21, relative to the 2019 Budget forecast, primarily due to lower-than-forecast interest rates.

Contingent Liabilities

In addition to the key demand sensitivities and economic risks, there are risks to the fiscal plan stemming from the government’s contingent liabilities. Whether these contingencies will result in actual liabilities for the Province is beyond the direct control of the government. Losses could result from legal settlements, defaults on projects, and loan and funding guarantees. Provisions for losses that are likely to occur and can be reasonably estimated are expensed and reported as liabilities in the Province’s financial statements. Any significant contingent liabilities related to the 2019–20 fiscal year will be disclosed as part of the Public Accounts of Ontario 2019–2020 to be released later this year.

Ensuring Fiscal Prudence

Introduced as part of the 2019 Budget, the Fiscal Sustainability, Transparency and Accountability Act, 2019 (FSTAA) requires Ontario’s fiscal plan to incorporate prudence in the form of a reserve to protect the outlook against unforeseen adverse changes in the Province’s revenue and expense. The government has included additional prudence above historic levels, which provides the fiscal flexibility to respond to changing global circumstances. The reserve has been set at $2.5 billion in 2020–21, significantly higher compared to the 2019 Budget forecast. This level of the reserve is the highest for a plan year since the Province first established reserves in fiscal plans in 1996.

Contingency funds are also maintained to help mitigate expense risks — for example, in cases where health and safety may be compromised — that may otherwise adversely affect Ontario’s fiscal performance. The contingency fund level is set at $1.3 billion in 2020–21.

In keeping with sound fiscal practices, the Province’s revenue outlook is based on reasonable economic assumptions. See Chapter 1: Economic Update for more details.

Improved Transparency in Financial Reporting

In order to enhance transparency and comparability in financial reporting, the 2019 Budget outlook has been restated for reclassification and key program transfer changes.

Ministry expenses have been reclassified to aggregate all expenses incurred related to the Government Real Estate Portfolio (GREP) under the Ministry of Government and Consumer Services, projects supported through Infrastructure Ontario under the Ministry of Infrastructure, and programs supported through the Ontario Trillium Foundation under the Ministry of Heritage, Sport, Tourism and Culture Industries. This reporting change has the impact of transferring funding to the above-noted three ministries from the remaining ministries’ budgets. Note 17 to the Public Accounts of Ontario 2018–2019 provided further details on this change in presentation.

The 2019 Budget has also been restated to reflect the transfer of Training and Skills Development programs from the Ministry of Colleges and Universities to the Ministry of Labour, Training and Skills Development. The impacts of this transfer are reflected between the Postsecondary Education and Other Program sectors.

These changes in reporting and presentation have no impact on the Province’s annual surplus/deficit, net debt or accumulated deficit and are reflected in the figures presented in the March 2020 Economic and Fiscal Update.

For ease of reference, Table 2.6 illustrates how the 2019 Budget plan has been restated.

Table 2.6
Impact of Changes in Provincial Reporting
($ Billions)
  2019–20 2020–21
2019 Budget — Health Sector 63.5 64.6
2019 Budget — Education Sector1 29.8 29.8
2019 Budget — Postsecondary Education and Training Sector 11.4 11.5
2019 Budget — Children’s and Social Services Sector 16.7 16.5
2019 Budget — Justice Sector 4.9 4.8
2019 Budget — Other Programs 23.8 24.7
2019 Budget — Total Program Expense 150.1 151.9
Changes due to Reclassification2 — Health Sector (0.1) (0.1)
Changes due to Reclassification — Education Sector3 (0.0) (0.0)
Changes due to Reclassification — Postsecondary Education and Training Sector (0.0) (0.0)
Changes due to Reclassification — Children’s and Social Services Sector (0.1) (0.1)
Changes due to Reclassification — Justice Sector (0.6) (0.5)
Changes due to Reclassification — Other Programs 0.7 0.7
Changes due to Reclassification — Total Program Expense
Changes due to Ministry Restructuring4 — Health Sector
Changes due to Ministry Restructuring — Education Sector5 (0.0) (0.0)
Changes due to Ministry Restructuring — Postsecondary Education Sector (0.9) (1.0)
Changes due to Ministry Restructuring — Children’s and Social Services Sector
Changes due to Ministry Restructuring — Justice Sector
Changes due to Ministry Restructuring — Other Programs 0.9 1.0
Changes due to Ministry Restructuring — Total Program Expense
Reclassified 2019 Budget — Health Sector 63.4 64.6
Reclassified 2019 Budget — Education Sector6 29.8 29.8
Reclassified 2019 Budget — Postsecondary Education Sector 10.5 10.5
Reclassified 2019 Budget — Children’s and Social Services Sector 16.6 16.5
Reclassified 2019 Budget — Justice Sector 4.3 4.2
Reclassified 2019 Budget — Other Programs 25.5 26.4
Reclassified 2019 Budget — Total Program Expense 150.1 151.9

[1], [3], [5], [6] Excludes the Teachers’ Pension Plan, which is included in Other Programs.

[2] Ministry expenses have been reclassified to aggregate all expenses incurred related to the Government Real Estate Portfolio (GREP) under the Ministry of Government and Consumer Services, projects supported through Infrastructure Ontario under the Ministry of Infrastructure, and programs supported through the Ontario Trillium Foundation under the Ministry of Heritage, Sport, Tourism and Culture Industries. Note 17 to the Public Accounts of Ontario 2018–2019 provided further details on this change in presentation.

[4] On October 21, 2019 the government announced that the Ministry of Labour would become the Ministry of Labour, Training and Skills Development and is consolidated in Other Programs; the Ministry of Training, Colleges and Universities would become the Ministry of Colleges and Universities; the Ministry of Health and Ministry of Long-Term Care are consolidated in the Health sector.

Note: Numbers may not add due to rounding.

Source: Ontario Treasury Board Secretariat.

Details on Ontario’s Finances

Table 2.7
Revenue
($ Millions)
  Actual
2017–18
Actual
2018–19
Interim1
2019–20
Plan
2020–21
Taxation Revenue — Personal Income Tax 32,900 35,381 37,628 37,316
Taxation Revenue — Sales Tax 25,923 27,804 29,132 29,078
Taxation Revenue — Corporations Tax 15,612 16,606 15,427 15,170
Taxation Revenue — Education Property Tax 5,883 6,171 6,213 6,270
Taxation Revenue — Employer Health Tax 6,205 6,544 6,820 6,823
Taxation Revenue — Ontario Health Premium 3,672 3,819 4,055 4,089
Taxation Revenue — Gasoline Tax 2,701 2,709 2,737 2,733
Taxation Revenue — Land Transfer Tax 3,174 2,761 2,964 3,029
Taxation Revenue — Tobacco Tax 1,244 1,241 1,149 1,108
Taxation Revenue — Fuel Tax 760 774 766 766
Taxation Revenue — Beer, Wine and Spirits Taxes 603 607 575 585
Taxation Revenue — Ontario Portion of the Federal Cannabis Excise Duty 19 70 155
Taxation Revenue — Electricity Payments in Lieu of Taxes 494 435 527 505
Taxation Revenue — Other Taxes 552 653 597 561
Taxation Revenue — Total 99,723 105,524 108,660 108,189
Government of Canada — Canada Health Transfer 14,359 14,852 15,832 16,252
Government of Canada — Canada Social Transfer 5,314 5,451 5,650 5,832
Government of Canada — Equalization 1,424 963
Government of Canada — Infrastructure Programs 1,065 605 646 1,013
Government of Canada — Labour Market Programs 969 1,015 1,039 1,092
Government of Canada — Social Housing Agreement 419 394 359 331
Government of Canada — Other Federal Payments 996 1,420 1,556 1,418
Government of Canada — Direct Transfers to Broader Public-Sector Organizations 314 390 329 407
Government of Canada — Total 24,860 25,090 25,411 26,345
Income from Government Business Enterprises — Ontario Lottery and Gaming Corporation 2,487 2,464 2,324 809
Income from Government Business Enterprises — Liquor Control Board of Ontario 2,207 2,276 2,347 2,394
Income from Government Business Enterprises — Ontario Cannabis Store (6) (42) 10 80
Income from Government Business Enterprises — Ontario Power Generation Inc./Hydro One Ltd. 1,464 772 1,054 862
Income from Government Business Enterprises — Total 6,152 5,470 5,735 4,145
Other Non-Tax Revenue — Reimbursements 1,000 998 982 1,029
Other Non-Tax Revenue — Vehicle and Driver Registration Fees 1,912 1,991 2,031 2,072
Other Non-Tax Revenue — Electricity Debt Retirement Charge2 593 15
Other Non-Tax Revenue — Power Supply Contract Recoveries 185 173 124 94
Other Non-Tax Revenue — Sales and Rentals3 2,450 1,477 1,573 1,621
Other Non-Tax Revenue — Carbon Allowance Proceeds4 2,401 472
Other Non-Tax Revenue — Other Fees and Licences 1,029 1,088 1,191 1,284
Other Non-Tax Revenue — Net Reduction of Power Purchase Contracts 74 41 30 28
Other Non-Tax Revenue — Royalties 290 251 290 276
Other Non-Tax Revenue — Fees, Donations and Other Revenues from Hospitals, School Boards and Colleges 8,309 9,237 9,369 9,740
Other Non-Tax Revenue — Miscellaneous Other Non-Tax Revenue 1,616 1,873 1,335 1,443
Other Non-Tax Revenue — Total 19,859 17,616 16,925 17,587
Total Revenue 150,594 153,700 156,731 156,266

[1] Interim represents the March 2020 Economic and Fiscal Update projection for the 2019–20 fiscal year.

[2] The Debt Retirement Charge cost was removed from residential electricity users’ electricity bills as of January 1, 2016 and for all other consumers as of April 1, 2018. Residual revenues recorded afterwards due to higher than expected amounts received following the 2017–18 year-end, compared to the estimated accrual amounts in 2017–18.

[3] Higher Sales and Rentals revenues in 2017–18 compared to 2018–19 and Interim 2019–20 are mainly due to significant, non‑recurring asset sale initiatives such as the sale of Hydro One shares.

[4] Declining Carbon Allowance Proceeds reflects the passing of the Cap and Trade Cancellation Act, 2018 on October 31, 2018.

Note: Numbers may not add due to rounding.

Source: Ontario Ministry of Finance.

Table 2.8
Total Expense1, 2
($ Millions)
Ministry Expense Actual
2017–18
Actual
2018–19
Interim3
2019–20
Plan
2020–21
Agriculture, Food and Rural Affairs (Base) 384 330 309 314.8
Agriculture, Food and Rural Affairs — Federal-Provincial Infrastructure Programs 102 96 94 104.0
Agriculture, Food and Rural Affairs — Municipal Infrastructure Program Investments4 195 257 231 10.0
Agriculture, Food and Rural Affairs — Demand-Driven Risk Management Programs 312 383 520 359.6
Agriculture, Food and Rural Affairs (Total)5 993 1,065 1,154 788.4
Attorney General (Total) 1,742 1,787 1,778 1,682.2
Board of Internal Economy (Total) 296 371 280 280.8
Children, Community and Social Services (Total) 16,300 16,841 17,375 17,697.2
Colleges and Universities (Base) 8,594 9,028 9,095 9,392.7
Colleges and Universities — Student Financial Assistance  1,663 2,043 1,322 1,274.4
Colleges and Universities — Time-Limited Infrastructure Funding under the Strategic Investment Fund 209 119
Colleges and Universities (Total) 10,465 11,190 10,417 10,667.1
Economic Development, Job Creation and Trade (Base) 418 356 343 368.8
Economic Development, Job Creation and Trade — Time-Limited Investments 422 430 259 209.0
Economic Development, Job Creation and Trade (Total) 840 786 602 577.8
Education (Base) 27,265 28,746 29,839 30,272.4
Education — Teachers’ Pension Plan6 1,659 1,678 1,570 1,620.7
Education (Total) 28,923 30,424 31,409 31,893.2
Energy, Northern Development and Mines (Base) 1,283 1,363 1,031 1,049.4
Energy, Northern Development and Mines — Electricity Cost Relief Programs  2,834 4,242 5,573 5,602.6
Energy, Northern Development and Mines (Total) 4,117 5,605 6,604 6,652.0
Environment, Conservation and Parks (Base) 706 464 626 656.9
Environment, Conservation and Parks — Time-Limited Investments 145 223 3  –   
Environment, Conservation and Parks (Total) 851 687 629 656.9
Executive Offices (Total) 37 34 32 37.5
Finance (Base) 843 885 798 862.0
Finance — Investment Management Corporation of Ontario7 67 90 161.1
Finance — Ontario Municipal Partnership Fund 506 510 505 501.9
Finance — Power Supply Contract Costs 191 173 124 94.1
Finance — COVID‑19 Response: Support for People and Jobs Fund 1,965.6
Finance (Total) 1,540 1,636 1,517 3,584.6
Francophone Affairs (Total) 6 6 6 6.1
Government and Consumer Services (Base) 668 651 640 641.1
Government and Consumer Services — Realty 982 1,012 1,112 1,024.4
Government and Consumer Services (Total) 1,650 1,664 1,752 1,665.6
Health (Total) 54,982 57,573 59,921 63,215.3
Heritage, Sport, Tourism and Culture Industries (Base) 940 935 950 946.9
Heritage, Sport, Tourism and Culture Industries — Ontario Cultural Media Tax Credits 509 588 656 704.3
Heritage, Sport, Tourism and Culture Industries — Ontario Cultural Media Tax Credits – Amounts Related to Prior Years 145 40 80
Heritage, Sport, Tourism and Culture Industries (Total) 1,594 1,562 1,686 1,651.3
Indigenous Affairs (Base) 86 75 78 82.2
Indigenous Affairs — One-Time Investments including Settlements8 1,122 215 14
Indigenous Affairs — Indigenous Affairs (Total) 1,208 290 92 82.2
Infrastructure (Base) 227 161 203 221.8
Infrastructure — Federal–Provincial Infrastructure Programs 248 352 122 310.5
Infrastructure — Waterfront Toronto Revitalization (Port Lands Flood Protection) 118 128.4
Infrastructure — Municipal Infrastructure Program Investments9 202.0
Infrastructure (Total) 475 513 444 862.6
Labour, Training, and Skills Development (Base) 212 205 213 244.3
Labour, Training, and Skills Development — Ontario Apprenticeship Training Tax Credit10 126 112 65 21.5
Labour, Training, and Skills Development — Demand-Driven Employment and Training Programs 916 943 970 1,027.7
Labour, Training, and Skills Development (Total) 1,254 1,259 1,247 1,293.4
Long-Term Care (Total) 4,163 4,329 4,441 4,628.4
Municipal Affairs and Housing (Base) 417 475 479 481.7
Municipal Affairs and Housing — Time-Limited Investments 559 636 315 226.2
Municipal Affairs and Housing — Social Housing Agreement - Payments to Service Managers11 392 367 341 315.2
Municipal Affairs and Housing (Total) 1,368 1,478 1,135 1,023.1
Natural Resources and Forestry (Base) 609 505 546 551.3
Natural Resources and Forestry — Emergency Forest Firefighting 117 208 137 100.0
Natural Resources and Forestry (Total) 726 713 683 651.3
Seniors and Accessibility (Total) 48 52 57 58.2
Solicitor General (Total) 2,561 2,681 2,773 2,849.5
Transportation (Base) 4,184 4,543 4,945 4,944.6
Transportation — Federal–Provincial Infrastructure Programs 404 297 332 640.0
Transportation (Total) 4,588 4,840 5,277 5,584.6
Treasury Board Secretariat (Base) 194 201 236 298.9
Treasury Board Secretariat — Employee and Pensioner Benefits12 1,442 1,165 1,468 1,389.0
Treasury Board Secretariat — Operating Contingency Fund 100 1,155.0
Treasury Board Secretariat — Capital Contingency Fund  –    145.0
Treasury Board Secretariat (Total) 1,636 1,365 1,804 2,987.9
Interest on Debt13 11,903 12,384 12,599 13,199.3
Total Expense 154,266 161,135 165,714 174,276.4

[1] Numbers reflect current ministry structure.

[2] Ministry expenses have been restated for reclassification and program transfer changes. These changes are fiscally neutral. The actual results are presented on similar basis for consistency.

[3] Interim represents the March 2020 Economic and Fiscal Update projection for the 2019–20 fiscal year.

[4], [9] Municipal infrastructure program funding transferring from the Ministry of Agriculture, Food and Rural Affairs to the Ministry of Infrastructure in 2020–21.

[5] The 2019–20 amount includes extraordinary production insurance payout of $175 million above annual forecast due to 2019 crop conditions and $137 million of in-year transfers from the Ministry of Infrastructure to deliver infrastructure programs.

[6], [12] Numbers reflect the pension expense that was calculated based on recommendations of the Independent Financial Commission of Inquiry, as described in Note 19 to the Consolidated Financial Statements in Public Accounts of Ontario 2017–2018.

[7] Based on the requirements of Public Sector Accounting Standards, the Province consolidated the Investment Management Corporation of Ontario into the Ministry of Finance.

[8] Numbers reflect the payment or liability related to one-time investments for land claim settlements and other items. The amounts fluctuate based on the land claims negotiated in each year.

[10] Eliminated for eligible apprenticeship programs that commenced on or after November 15, 2017. 2017–18 to 2019–20 include tax credit amounts related to prior years.

[11] The annual decline from 2017–18 to 2020–21 is mainly due to declining federal obligations, such as maturing mortgages, under the Social Housing Agreement.

[13] Interest on debt is net of interest capitalized during construction of tangible capital assets of $157 million in 2017–18, $175 million in 2018–19, $476 million in 2019–20, and $234 million in 2020–21.

Note: Numbers may not add due to rounding.

Sources: Ontario Ministry of Finance and Treasury Board Secretariat.

Table 2.9
Infrastructure Expenditures
($ Millions)
  Total
Infrastructure
Expenditures
2019–20
Interim1, 2
2020–21 Plan Investment
in Capital
Assets3
2020–21 Plan
Transfers
and Other
Infrastructure
Expenditures4
2020–21 Plan
Total
Infrastructure
Expenditures
Transportation — Transit 5,650 3,738 1,095 4,833
Transportation — Provincial Highways 2,746 2,452 145 2,597
Transportation — Other Transportation, Property and Planning 262 131 82 213
Health — Hospitals 2,559 2,061 3 2,064
Health — Other Health 243 74 169 243
Education 2,632 2,241 10 2,251
Postsecondary Education — Colleges and Other 338 472 62 534
Postsecondary Education — Universities 52 –     100 100
Social 283 23 140 163
Justice 365 519 96 615
Other Sectors5 1,610 989 1,034 2,024
Total Infrastructure Expenditures 16,741 12,701 2,936 15,637
Less: Other Partner Funding6 2,252 2,136 –     2,136
Total7 14,489 10,566 2,936 13,502

[1] Interim represents the March 2020 Economic and Fiscal Update projection for the 2019–20 fiscal year.

[2] Includes Provincial investment in capital assets of $11.6 billion.

[3] Includes interest capitalized during construction of $234 million.

[4] Includes transfers to municipalities, universities and non-consolidated agencies.

[5] Includes government administration, natural resources, and culture and tourism industries.

[6] Other Partner Funding refers to third-party investments primarily in hospitals, colleges and schools.

[7] Includes Federal/Municipal contributions to provincial infrastructure investments.

Note: Numbers may not add due to rounding.

Source: Ontario Treasury Board Secretariat.

The fluctuation in planned spending between 2019–20 interim and 2020–21 plan is not the result of project cancellations. It is a result of the timing of the historic investments that the government is making. For example:

  • The change in the transit sector is primarily due to the timing of planned investments for the GO Rail Expansion program; and
  • The change in the health sector is a result of the timing of funding for various major hospital projects reaching substantial completion between 2019–20 and 2020–21.
Table 2.10
Ten-Year Review of Selected Financial and Economic Statistics1, 2
($ Millions)
  2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 Actual
2018–19
Interim3
2019–20
Plan
2020–21
Revenue 116,401 120,319 122,955 126,152 136,148 140,734 150,594 153,700 156,731 156,266
Expense — Programs 121,222 120,103 123,330 126,199 129,905 131,460 142,363 148,751 153,115 161,077
Expense — Interest on Debt4 10,587 10,878 11,155 11,221 11,589 11,709 11,903 12,384 12,599 13,199
Total Expense 131,809 130,981 134,485 137,420 141,494 143,169 154,266 161,135 165,714 174,276
Reserve –  –  –  –  200 2,500
Surplus/(Deficit) (15,408) (10,662) (11,530) (11,268) (5,346) (2,435) (3,672) (7,435) (9,184) (20,510)
Net Debt 241,912 259,947 276,169 294,557 306,357 314,077 323,834 338,496 355,160 379,175
Accumulated Deficit 164,092 174,256 184,835 196,665 203,014 205,939 209,023 216,642 225,626 243,636
Gross Domestic Product (GDP) at Market Prices 660,436 680,791 696,192 727,042 760,435 790,749 826,945 857,384 890,962 909,175
Primary Household Income 444,771 459,895 473,807 490,423 512,570 520,486 543,084 567,086 589,206 606,882
Population — July (000s)5 13,261 13,391 13,511 13,618 13,707 13,875 14,073 14,319 14,567 14,831
Net Debt per Capita (dollars) 18,242 19,413 20,441 21,631 22,350 22,636 23,012 23,640 24,382 25,567
Household Income per Capita (dollars) 33,539 34,345 35,069 36,014 37,394 37,511 38,592 39,605 40,449 40,920
Net Debt as a Per Cent of Revenue 207.8% 216.0% 224.6% 233.5% 225.0% 223.2% 215.0% 220.2% 226.6% 242.6%
Interest on Debt as a Per Cent of Revenue 9.1% 9.0% 9.1% 8.9% 8.5% 8.3% 7.9% 8.1% 8.0% 8.4%
Net Debt as a Per Cent of GDP 36.6% 38.2% 39.7% 40.5% 40.3% 39.7% 39.2% 39.5% 39.9% 41.7%
Accumulated Deficit as a Per Cent of GDP 24.8% 25.6% 26.5% 27.1% 26.7% 26.0% 25.3% 25.3% 25.3% 26.8%

[1] Amounts reflect a change in pension expense that was calculated based on recommendations of the Independent Financial Commission of Inquiry, as described in Note 19 to the Consolidated Financial Statements, in the Public Accounts of Ontario 2017–2018. Amounts for net debt and accumulated deficit also reflect this change.

[2] Revenues and expenses have been restated to reflect the following fiscally neutral changes: i) revised presentation of education property taxes to be included in the taxation revenues; ii) reclassification of certain Government Business Enterprises to other government organizations; iii) reclassification of a number of tax measures that provide a financial benefit through the tax system to be reported as expenses; and iv) change in presentation of third-party revenue for hospitals, school boards and colleges to be reported as revenue.

[3] Interim represents the March 2020 Economic and Fiscal Update projection for the 2019–20 fiscal year.

[4] Interest on debt is net of interest capitalized during construction of tangible capital assets of $159 million in 2016–17, $157 million in 2017–18, $175 million in 2018–19, $476 million in 2019–20, and $234 million in 2020–21.

[5] Population figures are for July 1 of the fiscal year indicated (i.e., for 2011­–12, the population on July 1, 2011 is shown).

Note: Numbers may not add due to rounding.

Sources: Statistics Canada, Ontario Ministry of Finance and Treasury Board Secretariat.

Chart Descriptions

Chart 2.1: Estimated Revenue Impact of the COVID‑19 Outbreak

This waterfall chart shows the change in revenue from the 2019 Budget and the estimated impacts of new tax relief and the economic impact of the COVID‑19 outbreak. Compared to the 2019 Budget, 2019–20 revenues have increased by $2.6 billion. The higher base from 2019–20 carries forward to 2020–21 and is offset by new tax relief and the estimated impact of the revised economic outlook (−$5.8 billion), for a total decline of $3.5 billion in 2020–21 from the 2019 Budget projection.

Note: Numbers may not add due to rounding.
Source: Ontario Ministry of Finance.

Return to Chart 2.1

Updated: March 25, 2020
Published: March 25, 2020