2022 Ontario Economic Outlook and Fiscal Review Ontario’s Plan to Build: A Progress Update

The Honourable Peter Bethlenfalvy, Minister of Finance

Table of Contents

Minister’s Foreword and Introduction

• Minister’s Foreword and Introduction
• The Right Plan in the Face of New Challenges
• Ontario’s Plan to Build
• Building Ontario’s Economy Together
• Working for Workers
• Keeping Costs Down
• Respecting Taxpayer Dollars, Today and in the Future
• Together, Let’s Build Ontario

Ontario’s Economic and Fiscal Outlook in Brief

• Ontario’s Economic and Fiscal Outlook in Brief
• Ontario’s Economic Outlook — A Plan to Build in Uncertain Times
  • Revisions to Outlook Since the 2022 Budget
• A Strong Foundation for the Next Generation
• Ontario’s Fiscal Plan
  • Revenue Outlook Over the Medium Term
  • Program Expense Outlook Over the Medium Term
  • Other Fiscal Planning Assumptions
  • Economic and Fiscal Outlook Scenarios
• Borrowing and Debt Management
• A Capital Plan for a Stronger Ontario

Chapter 1: Ontario’s Plan to Build: A Progress Update

Section A: Building Ontario Progress Report

• Introduction
• Building Ontario’s Economy — Progress Report
  • Building Ontario’s Economy
  • Attracting Investment, Opportunity and Jobs
• Building Ontario’s Workforce — Progress Report
  • Preparing Students for the Jobs of the Future
  • Building a Skilled Workforce
  • Supports for Workers
  • Building Ontario’s Health Care Workforce
• Building Infrastructure — Progress Report
  • Building Ontario
  • Fighting Gridlock
  • Building Community Infrastructure
  • Connecting Ontario Through Broadband
• Keeping Costs Down — Progress Report
  • Cutting the Cost of Driving
  • Making It Easier and More Affordable to Take Transit
  • Helping Those Who Need It Most

Section B: Enhancing Ontario’s Plan to Build

• Building Ontario’s Economy
  • Introduction
  • Creating Opportunities by Cutting Red Tape
  • Creating a Clean Energy Credit Registry
  • Supporting Main Street Ontario
  • Modernizing Capital Markets
• Working for Workers
  • Introduction
  • Launching Skilled Trades Ontario
  • Encouraging More Students to Enter the Trades
  • Improving Assistance for People on the Ontario Disability Support Program
  • Enhancing the Skills Development Fund to Address Challenges to Hiring, Training or Retraining Workers
  • Implementing a Target Benefit Pension Plan Framework
• Keeping Costs Down
  • Introduction
  • Keeping Transportation Costs Down
  • Helping Those Who Need It Most

Chapter 2: Economic Performance and Outlook

• Introduction
  • Revisions to the Outlook Since the 2022 Budget
• Recent Economic Performance
  • Consumer Price Inflation
• Economic Outlook
• Global Economic Environment
• Details of Ontario’s Economic Outlook
  • Employment
  • Household Incomes and Consumption
  • Consumer Price Inflation
  • Housing
• Risks to the Outlook
• Economic Outlook Scenarios

Chapter 3: A Strong Foundation for the Next Generation: Ontario’s Fiscal Plan and Outlook

• Introduction — Ontario’s Plan to Eliminate Deficits and Invest in the Future
• Key Changes in 2022–23 Since the 2022 Budget
  • Revenue
• Expense
  • Prudence and COVID‑19 Time-Limited Funding in 2022–23
• Medium-Term Fiscal Plan
  • Medium-Term Revenue Outlook
  • Economic and Fiscal Outlook Scenarios
  • Medium-Term Expense Outlook
  • Prudence Built Into the Medium-Term Outlook
• Transparency and Risks
• Details of Ontario’s Finances

Chapter 4: Borrowing and Debt Management

• Introduction
• Borrowing Program
• Green Bond Program
• Cost of Debt
  • Term of Debt
• Ensuring Adequate Liquidity Levels
• Progress on the Debt Burden Reduction Strategy

Annex: Details of Tax Measures and Other Legislative Initiatives

• Overview
• Implementing 2022 Budget Tax Measures
• Supporting Small Business Growth
• Allowing Immediate Expensing to Encourage Business Investment
• Modernizing Ontario’s Cultural Media Tax Credits
  • Extending Film and Television Tax Credits to Online-Only Productions
  • Expanding Support for Location Fees
• Extending the Temporary Gas Tax and Fuel Tax Cuts
• Increasing the Non-Resident Speculation Tax Rate
• Addressing Unregulated Tobacco
• Summary of Tax Measures

Consultations on Ontario’s Plan to Build

List of Tables

Ontario’s Economic and Fiscal Outlook in Brief

• Summary of Ontario’s Economic Outlook
• Changes in the Ontario Ministry of Finance Key Economic Forecast Assumptions: 2022 Budget Compared to the 2022 Ontario Economic Outlook and Fiscal Review
• Ontario’s Medium-Term Fiscal Plan — Details
• Ontario Real GDP Growth Scenarios
• Ontario Nominal GDP Growth Scenarios
• 2022–23 Borrowing Program and Medium-Term Outlook
• Infrastructure Expenditures

Chapter 1: Ontario’s Plan to Build: A Progress Update

• Table 1.1: Recently Completed Highway Projects
• Table 1.2: Long-Term Care Projects Highlights
• Table 1.3: Examples of School Projects Underway
• Table 1.4: Examples of Recently Approved and Completed Projects Under the Investing in Canada Infrastructure Program

Chapter 2: Economic Performance and Outlook

• Table 2.1: Summary of Ontario’s Economic Outlook
• Table 2.2 Changes in the Ontario Ministry of Finance Key Economic Forecast Assumptions: 2022 Budget Compared to the 2022 Ontario Economic Outlook and Fiscal Review
• Table 2.3: Private-Sector Forecasts for Ontario Real GDP Growth
• Table 2.4: Private-Sector Forecasts for Ontario Nominal GDP Growth
• Table 2.5: External Factors
• Table 2.6: Ontario’s Economic Outlook
• Table 2.7: Impact of Sustained Changes in Key External Factors on Real GDP Growth
• Table 2.8: Ontario Real GDP Growth Scenarios
• Table 2.9: Ontario Nominal GDP Growth Scenarios

Chapter 3: A Strong Foundation for the Next Generation: Ontario’s Fiscal Plan and Outlook

• Table 3.1: Fiscal Summary
• Table 3.2: 2022–23 In-Year Fiscal Performance
• Table 3.3: Key Changes to 2022–23 Revenue Projections
• Table 3.4: Key Changes to 2022–23 Total Expense Projections
• Table 3.5: Summary of Medium-Term Revenue Outlook
• Table 3.6: Ontario’s Taxation Revenue Scenarios
• Table 3.7: Summary of Medium-Term Expense Outlook
• Table 3.8: Revenue
• Table 3.9: Total Expense
• Table 3.10: Infrastructure Expenditures
• Table 3.11: 10-Year Review of Selected Financial and Economic Statistics

Chapter 4: Borrowing and Debt Management

• Table 4.1: 2022–23 Borrowing Program and Medium-Term Outlook
• Table 4.2: Progress on Relevant Debt Sustainability Measures

Annex: Details of Tax Measures and Other Legislative Initiatives

• Table A.1: Summary of Tax Measures

List of Charts

Ontario’s Economic and Fiscal Outlook in Brief

• Ontario Fiscal Outlook Scenarios
• Net Debt-to GDP
• Borrowing Outlook Scenarios for Long-Term Borrowing

Chapter 1: Ontario’s Plan to Build: A Progress Update

• Chart 1.1: Supporting Ontario Businesses
• Chart 1.2: Building Transit in the Greater Golden Horseshoe
• Chart 1.3: Annual Ontario Tax Savings from Extending the Proposed Small Business Limit Phase-Out

Chapter 2: Economic Performance and Outlook

• Chart 2.1: Quarterly Real GDP Growth in 2022
• Chart 2.2: Ontario’s Unemployment Rate Remains Low
• Chart 2.3: Consumer Price Inflation Elevated Across Jurisdictions
• Chart 2.4: Revised GDP Growth Projections for 2022
• Chart 2.5: 10-Year Canadian Bond Rate Projections
• Chart 2.6: Job Increases Projected to Moderate After Record Gains
• Chart 2.7: Inflation Expected to Moderate but Uncertainty Persists
• Chart 2.8: Ontario Home Resale Market
• Chart 2.9: Range of Ontario GDP Scenario Forecasts

Chapter 3: A Strong Foundation for the Next Generation: Ontario’s Fiscal Plan and Outlook

• Chart 3.1: Current Deficit Outlook Compared to 2022 Budget
• Chart 3.2: Ontario Fiscal Outlook Scenarios
• Chart 3.3: Program Expense Growth Excluding COVID‑19 Time-Limited Funding
• Chart 3.4: Composition of Revenue, 2022–23
• Chart 3.5: Composition of Total Expense, 2022–23

Chapter 4: Borrowing and Debt Management

• Chart 4.1: Borrowing Outlook Scenarios for Long-Term Borrowing
• Chart 4.2: 2022–23 Borrowing
• Chart 4.3: Domestic and International Borrowing
• Chart 4.4: Green Bond Allocation by Framework Category
• Chart 4.5: Ontario’s Green Bond Issues
• Chart 4.6: Effective Interest Rate (Weighted Average) on Total Debt
• Chart 4.7: Comparison of Average Annual Ontario Borrowing Rates
• Chart 4.8: Comparison of Interest on Debt Expense Forecast
• Chart 4.9: Weighted-Average Term of Borrowings
• Chart 4.10: Average Unrestricted Liquid Reserve Levels
• Chart 4.11: Net Debt-to-GDP
• Chart 4.12: Net Debt-to-Revenue
• Chart 4.13: Interest on Debt-to-Revenue
• Chart 4.14: Debt Maturities-to-Net Debt