Expenditure Monitor 2022-23: Q1

Expenditure Monitor 2022-23: Q1

Publish date: September 15, 2022 ISSN 2562-9883
This report provides information on spending by the Province through the end of the first quarter of 2022-23 (April 1, 2022 to June 30, 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) and Jacob Kim (Senior Financial Analyst) under the direction of Luan Ngo (Director, Financial Analysis) and Jeffrey Novak (Chief Financial Analyst).

© Queen's Printer for Ontario, 2022

Citation
Expenditure Monitor 2022-23: Q1, Financial Accountability Office of Ontario, 2022.
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Highlights

2022-23 Spending Plan
Changes to the 2022-23 Spending Plan
First Quarter Spending: Actual Unaudited Spending vs. Planned Spending
First Quarter Spending: 2022-23 Spending vs. 2021-22 Spending
Unallocated Funds

Introduction

This report provides information on spending by the Government of Ontario (the Province) through the first quarter of the 2022-23 fiscal year, from April 1, 2022 to June 30, 2022. The report:

The information in this report is based on the FAO’s analysis of transactions recorded in the Province’s Integrated Financial Information System (IFIS) as of June 30, 2022. All figures are unaudited, as final audited figures are not available until the release of the Public Accounts of Ontario after the end of the fiscal year.

2022-23 Spending Plan

The Province’s yearly spending plan represents the legal spending authority for ministries as granted by the Legislature through the process of supply.[3] For the 2022-23 fiscal year, the Province’s spending plan is $193.0 billion. The $193.0 billion spending plan excludes $5.7 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 $5.7 billion in additional planned spending is not reviewed in this report as the Province does not actively monitor or control this spending.

Changes to the 2022-23 Spending Plan

The Province may change its spending plan throughout the year, either by requesting additional spending authority from the Legislature or by reallocating spending among different programs through Treasury Board Orders. As of the end of the first quarter, June 30, 2022, the Province had not made any changes to its $193.0 billion spending plan.

Status of Unallocated Funds

The Province’s $193.0 billion spending plan includes $4.6 billion in unallocated funds in the Contingency Fund. Unallocated funds are typically used to address spending pressures or program changes during the fiscal year. Unallocated funds cannot be spent directly by the Province but must be transferred to government programs through Treasury Board Orders. As of the end of the first quarter, there were no transfers from the Contingency Fund to government programs.

Table 1 Changes to the 2022-23 spending plan by sector, as of June 30, 2022, $ millions Note: Figures exclude planned spending on some assets and $5.7 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 information provided by Treasury Board Secretariat.
Sector 2022-23
Spending Plan
Q1 Changes Revised
2022-23
Spending Plan
Health 75,643 - 75,643
Education 34,748 - 34,748
Postsecondary Education 7,061 - 7,061
Children's and Social Services 18,562 - 18,562
Justice 5,781 - 5,781
Other Programs 33,658 - 33,658
Unallocated Funds:
Contingency Fund 4,550 - 4,550
Interest on Debt 12,988 - 12,988
Total 192,992 0 192,992

First Quarter Spending

Actual Unaudited Spending vs. Planned Spending

In order to manage and monitor its program spending during the fiscal year, the Province divides its spending plan into expected spending by quarter, which reflects historical spending patterns, seasonality and other factors. For 2022-23, the Province expects to spend $40.7 billion in the first quarter, $43.5 billion in the second quarter, $44.7 billion in the third quarter, and $64.1 billion in the fourth quarter.[4]

In the first quarter of 2022-23, although the Province expected to spend $40.7 billion, actual unaudited spending was $39.9 billion. This was $776 million (1.9 per cent) less than planned.

Figure 1 2022-23 actual unaudited spending vs. planned spending, by quarter, $ 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. Expected fourth quarter spending is significantly higher than expected spending in each of the first three quarters due to year-end accrual adjustments.

Source: FAO analysis of information provided by Treasury Board Secretariat.

By sector, the first quarter lower-than-planned spending was led by ‘other programs’ (-$889 million), education (-$195 million), postsecondary education (-$146 million) and children’s and social services (-$75 million), offset by higher-than-planned spending in health ($319 million), interest on debt ($176 million) and justice ($35 million).

Table 2 2022-23 spending by sector, as of June 30, 2022, $ 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 information provided by Treasury Board Secretariat.
Sector 2022-23 Spending Plan Planned Spending at end of Q1 Actual Spending at end of Q1 Actual vs. Planned at end of Q1 Actual vs. Planned (%)
Health 75,643 17,902 18,221 319 1.8%
Education 34,748 6,155 5,960 -195 -3.2%
Postsecondary Education 7,061 1,610 1,465 -146 -9.0%
Children's and Social Services 18,562 4,394 4,320 -75 -1.7%
Justice 5,781 1,271 1,305 35 2.7%
Other Programs 33,658 6,206 5,317 -889 -14.3%
Unallocated Funds:
Contingency Fund 4,550 - - - N/A
Interest on Debt 12,988 3,166 3,341 176 5.6%
Total 192,992 40,704 39,928 -776 -1.9%

The rest of this section highlights key vote-item spending that was above and below plan in the first quarter of 2022-23. For information on spending by all of the Province’s programs and ministries, visit the FAO’s website at: https://tinyurl.com/3sx2anjn.

Health sector spending: $319 million (1.8 per cent) above plan. Highlights include:

Education sector spending: $195 million (3.2 per cent) below plan. Highlights include:

Postsecondary education sector spending: $146 million (9.0 per cent) below plan. Highlights include:

Other Programs sector spending: $889 million (14.3 per cent) below plan. Highlights include:

Interest on debt spending: $176 million (5.6 per cent) above plan, largely due to higher-than-expected interest rates, as noted in the Province’s 2022-23 First Quarter Finances.[5]

2022-23 Spending vs. 2021-22 Spending

This report also compares spending in the current fiscal year against spending in the previous fiscal year to provide context for provincial spending trends and to identify significant year-over-year spending changes.

As noted above, in the first quarter of 2022-23, the Province spent $39.9 billion. This was $3.1 billion (8.3 per cent) more than was spent in the first quarter of 2021-22. All sectors spent more in the first quarter of 2022-23 compared to 2021-22. The largest year-over-year spending increase was in health ($1,398 million), followed by interest on debt ($480 million), education ($453 million), children’s and social services ($285 million), ‘other programs’ ($250 million), justice ($138 million) and postsecondary education ($51 million).

Table 3 First quarter spending by sector, 2022-23 vs. 2021-22, $ 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 information provided by Treasury Board Secretariat.
Sector 2022-23 Spending at end of Q1 2021-22
Spending at end of Q1
2022-23 vs. 2021-22 2022-23 vs. 2021-22 (%)
Health 18,221 16,824 1,398 8.3%
Education 5,960 5,506 453 8.2%
Postsecondary Education 1,465 1,414 51 3.6%
Children's and Social Services 4,320 4,034 285 7.1%
Justice 1,305 1,167 138 11.9%
Other Programs 5,317 5,067 250 4.9%
Interest on Debt 3,341 2,861 480 16.8%
Total 39,928 36,873 3,055 8.3%

Graphical Descriptions

Figure 1: 2022-23 actual unadited spending vs. planned spending, by quarter, $ millions Return to image
Q1 Q2 Q3 Q4
Planned Spending 40,704 43,502 44,675 64,111
Actual Unaudited Spending 39,928 - - -

Footnotes

[1] Temporary spending authority is first granted by the Legislature through the Interim Appropriation Act, with final spending authority then granted through the Supply Act. Permanent spending authority is also granted through other legislation for a limited number of programs.

[2] Expected fourth quarter spending is significantly higher than expected spending in each of the first three quarters due to year-end accrual adjustments.

[3] Temporary spending authority is first granted by the Legislature through the Interim Appropriation Act, with final spending authority then granted through the Supply Act. Permanent spending authority is also granted through other legislation for a limited number of programs.

[4] Expected fourth quarter spending is significantly higher than expected spending in each of the first three quarters due to year-end accrual adjustments.

[5] 2022-23 First Quarter Finances, section A.