Expenditure Monitor 2022-23: Q3

Publish date: March 1, 2023 ISSN 2562-9883
This report provides an update on the Province’s 2022-23 spending plan and reviews actual unaudited spending by the government over the first three quarters of the 2022-23 fiscal year (April 1, 2022 to December 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) and Matthew Stephenson (Manager, Financial Analysis) under the direction of Luan Ngo (Director, Financial Analysis) and Jeffrey Novak (Chief Financial Analyst).

© King’s Printer for Ontario, 2023

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Expenditure Monitor 2022-23: Q3, Financial Accountability Office of Ontario, 2023.
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Highlights

2022-23 Spending Plan

Changes to the 2022-23 Spending Plan

First, Second and Third Quarter Spending: Actual Unaudited Spending vs. Expected Spending[3]

First, Second and Third 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) over the first three quarters of the 2022-23 fiscal year, from April 1, 2022 to December 31, 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 December 31, 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.[4] The Province started the 2022-23 fiscal year with a spending plan of $193.0 billion.[5]

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 third quarter, December 31, 2022, the Province’s spending plan was up $209 million, from $193.0 billion to $193.2 billion.[6]

By sector, in the third quarter, the ‘other programs’ spending plan increased by $1,137 million, followed by health ($183 million), children’s and social services ($146 million), justice ($42 million) and education ($3 million). This was partially offset by a $1,302 million transfer from the Contingency Fund.

Table 1 Changes to the 2022-23 spending plan by sector, as of December 31, 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 Q2 Changes Q3 Changes Total Changes Revised 2022-23 Spending Plan
Health 75,643 - -14 183 169 75,812
Education 34,748 - 371 3 374 35,122
Postsecondary Education 7,061 - - - - 7,061
Children's and Social Services 18,562 - 1 146 147 18,709
Justice 5,781 - 2 42 44 5,824
Other Programs 33,658 - 13 1,137 1,150 34,808
Unallocated Funds:
Contingency Fund 4,550 - -373 -1,302 -1,674 2,876
Interest on Debt 12,988 - - - - 12,988
Total 192,992 0 0 209 209 193,201

Third Quarter Analysis

This section highlights key third 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/2p9d6uhr.

Health: $183 million increase for the Long-Term Care Homes Program (Operating) (Vote-Item 4502-1).

Children’s and Social Services: $146 million increase for the Ontario Disability Support Program – Financial Assistance under Financial and Employment Supports (Vote-Item 702-3).

Other Programs: $1,137 increase. Notable changes include:

Actual Unaudited Spending to Date

Actual Unaudited Spending vs. Expected Spending[7]

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, $43.3 billion in the second quarter, $45.3 billion in the third quarter, and $64.0 billion in the fourth quarter.[8]

Combined, over the first three quarters of 2022-23, the Province expected to spend $129.2 billion. However, actual unaudited spending was $122.8 billion. This was $6.4 billion (5.0 per cent) less than expected.

Figure 1 2022-23 actual unaudited spending vs. expected 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 and the Contingency Fund.

Source: FAO analysis of information provided by Treasury Board Secretariat

Accessible Version
Figure 1 2022-23 actual unaudited spending vs. expected 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. Return to image
Q1 Q2 Q3 Q4
Expected Spending 40,704 43,250 45,270 63,978
Actual Unaudited Spending 39,928 40,575 42,282 -

As of December 31, all sectors spent less than expected. By sector, lower-than-expected spending was led by ‘other programs’ (-$3,534 million), health (-$1,251 million), education (-$844 million), children’s and social services (-$458 million), postsecondary education (-$175 million), justice (-$88 million) and interest on debt (‑$87 million).

Table 2 2022-23 actual unaudited spending by sector, as of December 31, 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 Revised 2022-23 Spending Plan Expected Spending at end of Q3 Actual Spending at end of Q3 Actual vs. Expected at end of Q3 Actual vs. Expected (%)
Health 75,812 53,877 52,626 -1,251 -2.3%
Education 35,122 20,041 19,196 -844 -4.2%
Postsecondary Education 7,061 5,282 5,108 -175 -3.3%
Children's and Social Services 18,709 14,027 13,570 -458 -3.3%
Justice 5,824 4,070 3,982 -88 -2.2%
Other Programs 34,808 22,280 18,747 -3,534 -15.9%
Unallocated Funds:
Contingency Fund 2,876 - - - N/A
Interest on Debt 12,988 9,645 9,558 -87 -0.4%
Total 193,201 129,223 122,786 -6,437 -5.0%

The rest of this section highlights key vote-item spending that was above and below expectations in the first three quarters 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/2p9d6uhr.

Health sector spending: $1,251 million (2.3 per cent) less than expected. Highlights include:

Education sector spending: $844 million (4.2 per cent) less than expected. Highlights include:

Postsecondary education sector spending: $175 million (3.3 per cent) less than expected. Highlights include:

Children’s and social services sector spending: $458 million (3.3 per cent) less than expected. Highlights include:

Justice sector spending: $88 million (2.2 per cent) less than expected. Highlights include:

Other programs sector spending: $3,534 million (15.9 per cent) less than expected. Highlights include:

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, over the first three quarters of the 2022-23 fiscal year, the Province spent $122.8 billion. This was $2.9 billion (2.4 per cent) more than was spent in the same period of 2021-22. The largest year-over-year spending increase was in health ($1,119 million), followed by education ($852 million), interest on debt ($762 million), children’s and social services ($737 million), postsecondary education ($165 million) and justice ($51 million). Conversely, ‘other programs’ spending was $818 million less than during the same period of 2021-22.

Table 3 Actual unaudited spending through the end of the third quarter 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 Q3 2021-22 Spending at end of Q3 2022-23 vs. 2021-22 2022-23 vs. 2021-22 (%)
Health 52,626 51,507 1,119 2.2%
Education 19,196 18,344 852 4.6%
Postsecondary Education 5,108 4,943 165 3.3%
Children's and Social Services 13,570 12,833 737 5.7%
Justice 3,982 3,931 51 1.3%
Other Programs 18,747 19,565 -818 -4.2%
Interest on Debt 9,558 8,796 762 8.7%
Total 122,786 119,919 2,867 2.4%

Status of Unallocated Funds

Unallocated funds are used to address spending pressures or fund 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.

The Province started the 2022-23 fiscal year with a total of $4.6 billion in unallocated funds in the Contingency Fund. In the second quarter and third quarters, the Province transferred $373 million and $1,302 million, respectively, from the Contingency Fund to various programs. This results in a remaining balance in the Contingency Fund, as of December 31, of $2.9 billion.

Table 4 Transfers from the Contingency Fund, as of December 31, 2022, $ millions Source: FAO analysis of information provided by Treasury Board Secretariat.
Ministry/Program $ millions
Opening Balance 4,550
Less: First Quarter Transfers 0
Less: Second Quarter Transfers -373
Less: Third Quarter Transfers
Ministries of Citizenship and Multiculturalism; the Environment, Conservation and Parks; and Northern Development, Mines, Natural Resources and Forestry
Various Programs 6
Ministry of the Attorney General
Agency Relations 3
Alcohol and Gaming Commission of Ontario (Capital) 8
Alcohol and Gaming Commission of Ontario (Operating) 27
Ministry Administration <1
Ministry of Children, Community and Social Services
Ontario Disability Support Program – Financial Assistance 146
Ministry of Economic Development, Job Creation and Trade
Ontario Small Business Support Grant 18
Strategic Investments 227
Ministry of Energy
Energy Development and Management - Operating Assets 98
Ministry of Finance
Guaranteed Annual Income System 40
Ministry of Government and Consumer Services
Realty 21
Realty - Capital Assets 7
Ministry of Heritage, Sport, Tourism and Culture Industries
Grants in Support of the Festival and Event Attraction and Support Program 29
Ontario Production Services Tax Credit 2
Ontario Science Centre 4
Tourism Agencies Repairs and Rehabilitation 3
Ministry of Labour, Immigration, Training and Skills Development
Employment and Training 30
Ontario COVID-19 Worker Income Protection Benefit 184
Ministry of Long-Term Care
Long-Term Care Homes - Operations 183
Ministry of Municipal Affairs and Housing
Homelessness Programs 27
Priority Projects for Municipalities and Municipal Organizations 235
Ministry of the Solicitor General
Office of the Fire Marshal and Emergency Management 3
Total Third Quarter Transfers -1,302
Balance as of December 31, 2022 2,876

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] 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. As well, the $193.0 billion spending plan excludes $1.3 billion in planned spending on operating assets and $4.3 billion in planned spending on capital assets.

[3] “Expected spending” is also referred to as “planned spending” in Expenditure Monitor reports.

[4] 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.

[5] 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. As well, the $193.0 billion spending plan excludes $1.3 billion in planned spending on operating assets and $4.3 billion in planned spending on capital assets.

[6] In the government’s 2022-23 Third Quarter Finances, the Province reported its spending plan was up $3.3 billion from the start of the fiscal year. However, the 2022-23 Third Quarter Finances reflect transactions that occurred after December 31, 2022, including a $5.0 billion expense for ongoing land claims with Indigenous communities and an additional $1.1 billion drawdown from the Contingency Fund. These transactions will be reviewed in the FAO’s fourth quarter report.

[7] “Expected spending” is also referred to as “planned spending” in Expenditure Monitor reports.

[8] Expected spending has been adjusted to reflect second and third quarter changes to the spending plan. Fourth quarter expected spending is significantly higher than expected spending in each of the first three quarters due to year-end accrual adjustments and the Contingency Fund.

[9] For more analysis see FAO, “Ministry of Education: Spending Plan Review,” 2022.