The FAO produces regular reports analyzing the state of the Province's finances, trends in the provincial economy and estimates of the financial impact of bills or other proposals over which the Legislature has jurisdiction.
The FAO’s 2016-17 annual report describes the FAO’s activities in support of the Legislative Assembly’s performance of its constitutional functions, especially financial scrutiny, and discusses the FAO’s improved access to government information.
The FAO’s Economic and Fiscal Outlook provides an assessment of Ontario’s current economic outlook and the state of the provincial government’s finances.
This report analyzes the impact of Ontario’s Fair Hydro Plan on electricity ratepayers and Provincial finances over the next 29 years. Overall, the FAO estimates that Ontario’s Fair Hydro Plan will cost the Province $45 billion and provide $24 billion in savings to electricity ratepayers - for a total net cost to Ontarians of $21 billion.
As part of the Fair Workplaces, Better Jobs Act, the government proposes to raise Ontario’s general minimum wage from its current rate of $11.40 per hour to $14 per hour on January 1, 2018 and $15 per hour the following year. While almost 1.6 million workers will benefit from the increase, a significant number of lower wage workers will lose their jobs and some businesses will struggle to cover higher payroll costs.
In the 2017 Budget, the government restated its commitment to reduce the net debt-to-GDP ratio to its pre-recession level of 27 per cent. The Province’s commitment is based on three unlikely assumptions. If any of these assumptions fall short of expectations, the government’s debt-to-GDP target would not be achieved.
The 2017 Ontario Budget projects balanced budgets beginning in 2017-18 and continuing over the next two years. Given the government’s spending plans, maintaining a balanced budget relies critically on an optimistic revenue forecast – and in particular, on very strong growth in tax revenues. However, there appears to be significant downside risk to the government’s forecast.
FAO backgrounders provide primarily descriptive information on issues of interest to Members of Provincial Parliament. Backgrounders are based on information that the FAO has received from the Province.
Ontario’s debt is rated by four principal international credit rating agencies, which typically publish an annual update of their view of the province’s finances and the quality of Ontario’s debt.
Following the tabling of Ontario’s 2016 Budget, each of the four rating agencies affirmed their current rating of Ontario’s debt, indicating that they believe the province has taken adequate steps on both revenues and expenditures to achieve its plan to restore fiscal balance by 2017-18.
However, if Ontario’s fiscal position deteriorates beyond 2017-18, either through an easing of expenditure restraint or unexpected revenue weakness, the agencies could be expected to lower Ontario’s credit rating, which could lead to higher borrowing costs and a more challenging fiscal position.
The Province forecasts that it will collect $2.74 billion in service fee revenue in 2016-17. This backgrounder provides a partial list of changes to Provincial service fee rates planned for 2016-17 and includes a discussion of the growth rate of service fee revenue. Service fee revenue has increased by an average of 6.8% a year since 2011-12, largely due to the increase in revenue from vehicle and driver registration fees.