Expenditure Monitor 2021-22: Q4

Expenditure Monitor 2021-22: Q4

Publish date: July 19, 2022 ISSN 2562-9883
This report provides information on spending by the Province through the end of the 2021-22 fiscal year (March 31, 2022).
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About this Document

Established by the Financial Accountability Officer Act, 2013, the Financial Accountability Office (FAO) provides independent analysis on the state of the Province’s finances, trends in the provincial economy and related matters important to the Legislative Assembly of Ontario.

This report has been prepared with the benefit of publicly available information and information provided by Treasury Board Secretariat.

All dollar amounts are in Canadian, current dollars (i.e., not adjusted for inflation) unless otherwise noted.

Prepared by:
Michelle Gordon (Senior Financial Analyst), Jacob Kim (Senior Financial Analyst) and Matthew Stephenson (Manager, Financial Analysis) under the direction of Luan Ngo (Director, Financial Analysis) and Jeffrey Novak (Chief Financial Analyst).

© Queen's Printer for Ontario, 2022

Citation
Expenditure Monitor 2021-22: Q4, Financial Accountability Office of Ontario, 2022.
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Highlights

Changes to the 2021-22 Spending Plan

2021-22 Spending (Unaudited)

2021-22 Budget Deficit Projection

Status of Unallocated Funds

Introduction

This report provides information on unaudited spending by the Government of Ontario (the Province) through the end of the 2021-22 fiscal year (March 31, 2022). The report:

The information in this report is based on the FAO’s analysis of the 2021-22 Expenditure Estimates, the Supplementary Estimates, 2021-22 (1st, 2nd and 3rd editions), the 2022 Ontario Budget, and transactions recorded in the Province’s Integrated Financial Information System (IFIS) as of April 22, 2022.

The closing date for spending transactions related to the 2021-22 fiscal year, which ended on March 31, 2022, was April 22, 2022. However, there will still be 2021-22 spending transactions that are recorded between April 22, 2022 and when the 2021-22 Public Accounts of Ontario are released. Depending on the nature of these transactions, the 2021-22 Public Accounts of Ontario may contain material changes from the information presented in this report.

Changes to the 2021-22 Spending Plan

Overview

The Province began the 2021-22 fiscal year with a spending plan of $178.3 billion.[2] By the end of the fiscal year, the spending plan had increased by $6.8 billion (3.8 per cent) to $185.1 billion. In the third and fourth quarters, the Province added $4.1 billion and $2.7 billion in planned spending, respectively, largely through the tabling of three editions of supplementary estimates.

By sector, the largest spending plan increase during the fiscal year went to health, at $4,110 million, followed by ‘other programs’ ($3,766 million) and justice ($417 million). The remaining program sectors experienced spending plan decreases during the 2021-22 fiscal year: children’s and social services (-$652 million), postsecondary education (-$289 million) and education (-$284 million).

The Province started the 2021-22 fiscal year with a total of $2.1 billion in unallocated funds in the Contingency Fund. In the third quarter, the Province created the $2.7 billion Time-Limited COVID-19 Fund and topped up the Contingency Fund by $0.3 billion, for total available unallocated funds of $5.1 billion. After accounting for net transfers to various programs during the year of $3.3 billion, the remaining balances at the end of 2021-22 were $1.8 billion in the Contingency Fund and zero in the Time-Limited COVID-19 Fund. (The final section of this report provides more information on the two unallocated funds.) The remaining funds in the Contingency Fund will reduce both the budget deficit and Ontario’s net debt.

Table 1 Changes to the 2021-22 spending plan by sector, $ millions Note: Figures exclude planned spending on some assets and $7.8 billion in additional planned spending by the broader public sector organizations controlled by the Province (hospitals, school boards and colleges), the Province’s agencies and the legislative offices. Source: FAO analysis of the 2021-22 Expenditure Estimates and information provided by Treasury Board Secretariat.
Sector 2021-22 Spending Plan Q1 Changes Q2 Changes Q3 Changes Q4 Changes Total Changes Revised
2021-22
Spending Plan
Health 71,184 5 15 118 3,972 4,110 75,294
Education 32,847 6 - 82 -373 -284 32,563
Postsecondary Education 6,987 - - 12 -301 -289 6,698
Children's and Social Services 18,108 - 1 9 -662 -652 17,457
Justice 5,192 10 1 89 317 417 5,609
Other Programs 29,472 445 209 2,045 1,067 3,766 33,238
Unallocated Funds:
Contingency Fund 2,080 -474 -235 -99 554 -254 1,826
Time-Limited COVID-19 Fund - - - 1,865 -1,865 - -
Interest on Debt 12,419 - - - - - 12,419
Total 178,290 -7 -9 4,122 2,708 6,814 185,104

Fourth Quarter Analysis[3]

This section highlights key fourth quarter spending plan changes by sector and vote-item. For information on all of the Province’s transfer payment programs and ministries, visit the FAO’s website at: https://tinyurl.com/3tfejdp5.

Health: $3,972 million increase. Notable changes include:

Education: $373 million decrease. Notable changes include:

Postsecondary Education: $301 million decrease. Notable changes include:

Children’s and Social Services: $662 million decrease. Notable changes include:

Justice: $317 million increase. Notable changes include:

Other Programs: $1,067 million increase. Notable changes include:

2021-22 Spending (Unaudited)

Unaudited Actual Spending vs. Planned Spending

The Province spent $177.9 billion in 2021-22, which was $7.2 billion (3.9 per cent) less than planned. All sectors spent less than planned in 2021-22, led by ‘other programs’ ($2,406 million), health ($1,817 million), interest on debt ($618 million), children’s and social services ($173 million), postsecondary education ($134 million), education ($124 million) and justice ($80 million). Also, an unspent $1.8 billion end-of-year balance remained in the Contingency Fund. The $7.2 billion in below-plan spending (or net savings) will be used to reduce both the budget deficit and Ontario’s net debt.

The $7.2 billion (3.9 per cent) in net savings for 2021-22 is less than the net savings recorded in 2020-21 of $10.3 billion (5.5 per cent) but higher than the pre-COVID-19 historical annual average of $3.8 billion (2.7 per cent) between 2010-11 and 2019-20.

Table 2 2021-22 unaudited spending vs. planned spending by sector, $ millions Note: Figures exclude spending on some assets and additional spending by the broader public sector organizations controlled by the Province (hospitals, school boards and colleges), the Province’s agencies and the legislative offices. Source: FAO analysis of the 2021-22 Expenditure Estimates and information provided by Treasury Board Secretariat.
Sector Revised 2021-22 Spending Plan 2021-22 Unaudited Spending Unaudited Spending vs. Revised Spending Plan Unaudited Spending vs. Revised Spending Plan (%)
Health 75,294 73,477 -1,817 -2.4%
Education 32,563 32,439 -124 -0.4%
Postsecondary Education 6,698 6,564 -134 -2.0%
Children's and Social Services 17,457 17,284 -173 -1.0%
Justice 5,609 5,529 -80 -1.4%
Other Programs 33,238 30,833 -2,406 -7.2%
Unallocated Funds:
Contingency Fund 1,826 - -1,826 -100.0%
Time-Limited COVID-19 Fund - - - N/A
Interest on Debt 12,419 11,801 -618 -5.0%
Total 185,104 177,926 -7,178 -3.9%

The rest of this section highlights key vote-item spending that was above and below plan in 2021-22. For information on spending by all of the Province’s transfer payment programs and ministries, visit the FAO’s website at: https://tinyurl.com/3tfejdp5.

Health sector spending: $1,817 million (2.4 per cent) below plan. Highlights include:

Other Programs sector spending: $2,406 million (7.2 per cent) below plan. Highlights include:

2021-22 Spending vs. 2020-21 Spending

In 2021-22, the Province spent $177.9 billion, which was $0.8 billion (0.4 per cent) less than was spent in 2020-21. The largest year-over-year spending decrease was in ‘other programs’ (-$4,421 million), followed by education (-$907 million) and children’s and social services (-$446 million). Conversely, health ($4,329 million), interest on debt ($496 million), justice ($171 million) and postsecondary education ($1 million) all spent more in 2021-22 compared to 2020-21.

Table 3 2021-22 unaudited spending vs. 2020-21 actual spending, $ millions Note: Figures exclude spending on some assets and additional spending by the broader public sector organizations controlled by the Province (hospitals, school boards and colleges), the Province’s agencies and the legislative offices. Source: FAO analysis of the 2021-22 Expenditure Estimates, the 2020-21 Public Accounts of Ontario and information provided by Treasury Board Secretariat.
Sector 2021-22 Unaudited Spending 2020-21 Actual Spending 2021-22 vs. 2020-21 2021-22 vs. 2020-21 (%)
Health 73,477 69,148 4,329 6.3%
Education 32,439 33,346 -907 -2.7%
Postsecondary Education 6,564 6,563 1 0.0%
Children's and Social Services 17,284 17,730 -446 -2.5%
Justice 5,529 5,358 171 3.2%
Other Programs 30,833 35,254 -4,421 -12.5%
Interest on Debt 11,801 11,305 496 4.4%
Total 177,926 178,703 -777 -0.4%

2021-22 Budget Deficit Projection

Based on the spending information presented in this report and the FAO’s most recent revenue forecast,[6] the FAO has updated its 2021-22 budget deficit projection to $8.1 billion.[7] In comparison, in the 2022 Ontario Budget,[8] the Province projected a 2021-22 budget deficit of $13.5 billion. The difference between the FAO’s and the Province’s 2021-22 budget deficit projections is $5.4 billion.[9]

The FAO estimates that 2021-22 total revenue will be $1.6 billion higher and total consolidated expense will be $3.8 billion lower than forecast by the Province in the 2022 budget. The difference between the two forecasts largely reflects more up-to-date information available to the FAO, which includes updated spending transactions.[10]

Table 4 2021-22 budget deficit projections, 2022 Ontario Budget vs. FAO Projection, $ millions * Consolidated expense includes additional spending (an estimated $5.4 billion in the FAO's projection) by the broader public sector organizations controlled by the Province (hospitals, school boards and colleges), the Province's agencies and the legislative offices. Source: 2022 Ontario Budget and FAO analysis of information provided by Treasury Board Secretariat.
Province FAO Difference
Revenue 173,572 175,189 1,617
Consolidated Expense*
Health 79,015 76,538 -2,477
Education 31,849 31,952 103
Postsecondary Education 10,002 9,902 -100
Children's and Social Services 17,289 17,086 -203
Justice 5,022 5,108 86
Other Programs 30,899 30,117 -782
Interest on Debt 12,992 12,587 -405
Total Consolidated Expense 187,068 183,291 -3,777
Surplus/(Deficit) -13,496 -8,102 5,394

Status of Unallocated Funds

The Province started the 2021-22 fiscal year with a total of $2.1 billion in unallocated funds in the Contingency Fund. In the third quarter, the Province created the Time-Limited COVID-19 Fund, with a balance of $2.7 billion, and topped up the Contingency Fund by $0.3 billion, for total available unallocated funds of $5.1 billion.

Unallocated funds cannot be spent directly by the Province but must be transferred to government programs through Treasury Board Orders. Through the first three quarters, the Province transferred a net $2.0 billion from the two unallocated funds to various programs. In the fourth quarter, the Province transferred a net $1,865 million from the Time-Limited COVID-19 Fund to various programs, completely drawing down the fund. In contrast, the Province transferred a net $554 million to the Contingency Fund from various programs, resulting in a year-end balance in the Contingency Fund of $1,826 million. The remaining funds in the Contingency Fund will reduce both the budget deficit and Ontario’s net debt.

Table 5 Status of unallocated funds in 2021-22, $ millions Source: FAO analysis of information provided by Treasury Board Secretariat.
Unallocated Fund Opening Balance Q1 Transfers Q2 Transfers Q3 Top-Ups Q3 Transfers Q4 Transfers Balance at Year-End
Contingency Fund 2,080 -474 -235 320 -419 554 1,826
Time-Limited COVID-19 Fund - - - 2,700 -835 -1,865 -
Total 2,080 -474 -235 3,020 -1,254 -1,311 1,826

The following tables provide information on fourth quarter transfers from the Time-Limited COVID-19 Fund and the Contingency Fund.

Table 6 Fourth quarter transfers from the Time-Limited COVID-19 Fund, $ millions Source: FAO analysis of information provided by Treasury Board Secretariat.
Ministry/Program $ millions
Opening Balance -
Less: First Quarter Transfers -
Less: Second Quarter Transfers -
Add: Third Quarter Top-Up 2,700
Less: Third Quarter Transfers -835
Less: Fourth Quarter Transfers
Ministry of Economic Development, Job Creation and Trade
Ontario Small Business Support Grant 293
Ministry of Education
Child Care and Early Years Programs - Policy Development and Program Delivery 117
Elementary and Secondary Education Program - Policy and Program Delivery 102
Ministry of Energy, Northern Development and Mines
Energy Support, Engagement and Indigenous Partnerships 83
Ministry of the Environment, Conservation and Parks
Ontario Parks (Capital) <1
Ministry of Health
Operation of Hospitals 834
Ministry of Heritage, Sport, Tourism and Cultural Industries
Sport 30
Ministry of Long-Term Care
Long-Term Care Homes - Operations 277
Ministry for Seniors and Accessibility
Seniors Affairs Transfer Payment 8
Ministry of the Solicitor General
Ministry Administration 54
Institutional Services 43
Field and Traffic Services 23
Operational Support <1
Community Services <1
Staff Recruitment and Training <1
Total Fourth Quarter Transfers -1,865
Balance at year-end 0
Table 7 Fourth quarter transfers from the Contingency Fund, $ millions * Negative values represent transfers from ministry programs to the Contingency Fund. ** Due to data limitations, the FAO is unable to provide a complete list of programs. Source: FAO analysis of information provided by Treasury Board Secretariat.
Ministry/Program $ millions
Opening Balance 2,080
Less: First Quarter Transfers -474
Less: Second Quarter Transfers -235
Add: Third Quarter Top-Up 320
Less: Third Quarter Transfers -419
Less: Fourth Quarter Transfers
Ministry of the Attorney General
Court Services and other programs** 105
Ministry of Children, Community and Social Services
Ontario Disability Support Program - Financial Assistance* -85
Ontario Works - Employment Assistance* -137
Ontario Works - Financial Assistance* -335
Other programs** -178
Ministry of Colleges and Universities
Student Financial Assistance Programs* -316
Ministry of Economic Development, Job Creation and Trade
Ontario Innovation Tax Credit 43
Business Research Institution Tax Credit 20
Sector Support Grants 10
Jobs and Prosperity Fund and Other Business Support Programs* -10
Ontario Together Fund* -18
Ontario Tourism and Hospitality Small Business Support Grant* -60
Invest Ontario Fund* -100
Ministry of Education
Elementary and Secondary Education Program - Policy and Program Delivery* -102
Child Care and Early Years Programs - Policy Development and Program Delivery* -117
School Board Capital Grants* -146
Ontario Child Care Tax Credit* -228
Ministry of Energy, Northern Development and Mines
Resource Revenue Sharing for Mining 7
Remote Air Carrier Support Program 5
Ministry of the Environment, Conservation and Parks
Ontario Parks 6
Environmental Policy and Programs* -2
Ontario Parks Infrastructure* -5
Environmental Science and Laboratory Infrastructure* -10
Other programs** -4
Ministry of Finance
Tax and Benefits Administration and other programs** -22
Ministry of Government and Consumer Services
Ontario Shared Services and other programs** 36
Realty Transactions 2
Ministry of Health
Operation of Hospitals 452
COVID-19 Response 13
Addiction Program 7
Other programs** 24
Ministry of Heritage, Sport, Tourism and Culture Industries
Ontario Production Services Tax Credit 111
Ontario Film and Television Tax Credit 33
Ontario Computer Animation and Special Effects Tax Credit 30
Grants in Support for Tourism Regions 2
Ontario Sound Recording Tax Credit <1
Sport* -2
Tourism and Culture Capital* -44
Ministry of Indigenous Affairs
Land Claim Settlements and other programs** 20
Ministry of Infrastructure
Natural Gas Access Program* >-1
Municipal Infrastructure* -2
Community, Culture and Recreation - Federal Contributions* -6
Community, Culture and Recreation - Provincial Contributions* -6
Green Infrastructure - Provincial Contributions* -13
Federal-Provincial Infrastructure Programs - Federal Contributions* -15
Federal-Provincial Infrastructure Programs - Provincial Contributions* -15
Rural and Northern Infrastructure - Federal Contributions* -18
Broadband and Cellular Infrastructure* -161
Ministry of Labour, Training and Skills Development
Ontario Co-operative Education Tax Credit 10
Ministry Administration 7
Ontario Apprenticeship Tax Credit 7
Settlement and Integration Transfer Payment 2
Occupational Health and Safety Program - Capital Assets 2
Health and Safety Associations Capital <1
Other programs** -3
Ministry of Long-Term Care
Long-Term Care Homes - Operations 156
Ministry of Municipal Affairs and Housing
Housing Lands - Sale and other programs** 116
Ministry of Natural Resources and Forestry
Infrastructure for Natural Resource Management - Capital Expense and other programs** 295
Infrastructure for Natural Resource Management - Capital Assets <1
Ministry of Seniors and Accessibility
Seniors Affairs Transfer Payment 9
Ministry of the Solicitor General
Staff Recruitment and Training* >-1
Community Services* >-1
Operational Support* >-1
Field and Traffic Services* -23
Institutional Services* -43
Ministry Administration* -54
Justice Technology Services - Capital Assets* -372
Ministry of Transportation
Transportation Infrastructure Management - Capital Assets 295
Metrolinx - Capital Expense 153
Transportation Safety 54
Other programs** 126
Treasury Board Secretariat
Ministry Administration* -1
Ontario Digital Service* -1
Centre for People, Culture and Talent* -2
Office of the Comptroller General* -3
Treasury Board Support and Financial Planning* -15
Labour Relations and Compensation* -27
Total Fourth Quarter Net Transfers to Contingency Fund 554
Balance at year-end 1,826

Footnotes

[1] As detailed in the 2021 Ontario Budget and the 2021-22 Expenditure Estimates. Excludes $7.8 billion in additional planned spending by the broader public sector organizations controlled by the Province (hospitals, school boards and colleges), the Province’s agencies and the legislative offices. The Province does not actively monitor or control this spending. Also excludes $4.0 billion in additional planned spending on capital assets and $1.2 billion on operating assets.

[2] As detailed in the 2021 Ontario Budget and the 2021-22 Expenditure Estimates. Excludes $7.8 billion in additional planned spending by the broader public sector organizations controlled by the Province (hospitals, school boards and colleges), the Province’s agencies and the legislative offices. The Province does not actively monitor or control this spending. Also excludes $4.0 billion in additional planned spending on capital assets and $1.2 billion on operating assets.

[3] For analysis on the first three quarters of 2021-22, see FAO, “Expenditure Monitor 2021-22: Q1,” 2021; FAO, “Expenditure Monitor 2021-22: Q2,” 2021; and FAO, “Expenditure Monitor 2021-22: Q3,” 2022.

[4] Also known as the Ontario Childcare Access and Relief from Expenses (CARE) Tax Credit.

[5] The COVID-19 Response program, which is a distinct program from the Time-Limited COVID-19 Fund, provides funding for population and public health measures related to the COVID-19 pandemic.

[6] FAO’s revenue forecast from the FAO’s Economic and Budget Outlook, Spring 2022 report, with updated information from the 2022 Ontario Budget.

[7] Compared to a projected $8.7 billion budget deficit in the FAO's Economic and Budget Outlook, Spring 2022 report.

[8] Tabled on April 28, 2022.

[9] The actual 2021-22 budget deficit will be released as part of the 2021-22 Public Accounts of Ontario in September 2022.

[10] The FAO reviewed additional spending transactions from the Province’s Integrated Financial Information System (IFIS), which occurred after the preparation of the 2022 Ontario Budget, and up until the accounts were closed on April 22, 2022.