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.
This report analyzes how the Province plans to achieve the health sector expense targets in the 2016 Ontario Budget, and investigates whether the low health sector expense growth rate required to achieve the targets is sustainable after 2018-19. As part of the analysis, the report reviews how the Province slowed the growth rate of health sector expense starting in 2012-13.
This report analyzes the fiscal impact of cap and trade, i.e. how cap and trade will impact the Province’s projected surplus/deficit. Under cap and trade, the Province would sell allowances to emit greenhouse gases. It would then spend the funds raised on initiatives to further reduce greenhouse gas emissions.
This report provides an updated Economic and Fiscal Outlook for Ontario based on developments since the release of the FAO’s spring outlook on May 18, 2016.
The Impact of a Housing Market Correction on Ontario’s Fiscal Position provides the FAO’s assessment of risk to Ontario’s finances from a potential housing market correction.
Ontario posted a relatively strong job gain of 76,400 net new jobs in 2016, as the unemployment rate declined to 6.5 per cent. However, looking beyond the headline results reveals a labour market that is undergoing both structural and behavioural changes as well as continuing challenges for some workers.
The annual deficit is a headline number in the Provincial budget and Public Accounts, as well as in the Financial Accountability Officer’s own Economic and Fiscal Outlook. However, this number is not a cash concept. Rather, it is based on accrual accounting. This commentary reviews the importance of understanding cash flow and how the different sources and uses of Provincial cash have changed over time.
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.