Expenditure Monitor 2022-23: Q4

Publish date: August 2, 2023 ISSN 2562-9883
This report provides information on unaudited spending by the Province through the end of the 2022-23 fiscal year (March 31, 2023). 
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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 (Acting Chief Financial Analyst).

© King’s Printer for Ontario, 2023

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Expenditure Monitor 2022-23: Q4, Financial Accountability Office of Ontario, 2023.
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Highlights

2022-23 Spending Plan

Changes to the 2022-23 Spending Plan

Actual Unaudited Spending vs. Planned Spending

2022-23 Spending vs. 2021-22 Spending

2022-23 Budget Balance Projection

Status of the Contingency Fund

Introduction

This report provides information on spending by the Government of Ontario (the Province) through the end of the 2022-23 fiscal year (March 31, 2023). 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 April 24, 2023. All figures are unaudited, as final audited figures are not available until the release of the Public Accounts of Ontario up to six months after the end of the fiscal year.

The closing date for spending transactions related to the 2022-23 fiscal year, which ended on March 31, 2023, was April 24, 2023. However, there will still be 2022-23 spending transactions that are recorded between April 24, 2023 and when the 2022-23 Public Accounts of Ontario are released. Depending on these transactions, the 2022-23 Public Accounts of Ontario may contain material changes from the information presented in this report.

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.[5] The Province started the 2022-23 fiscal year with a spending plan of $193.0 billion.[6]

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. By the end of the fiscal year, March 31, 2023, the Province’s spending plan was up $1,294 million, from $193.0 billion to $194.3 billion.

By sector, the largest spending plan increase during the fiscal year was in ‘other programs,’ at $4,208 million, followed by justice ($189 million) and education ($128 million). The remaining program sectors experienced spending plan decreases during the 2022-23 fiscal year: health (-$312 million), postsecondary education (‑$116 million) and children’s and social services (-$65 million).

The Province started the 2022-23 fiscal year with a total of $4.6 billion in unallocated funds in the Contingency Fund. After accounting for net transfers to various programs during the year of $2.7 billion, the remaining Contingency Fund balance at the end of 2022-23 was $1.8 billion. The remaining funds in the Contingency Fund will reduce both the budget deficit and Ontario’s net debt.

Table 1 Changes to the 2022-23 spending plan by sector, $ millions Note: Figures exclude planned spending on some assets and 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 Q4 Changes Total Changes Revised 2022-23 Spending Plan
Health 75,643 - -14 183 -481 -312 75,331
Education 34,748 - 371 3 -246 128 34,876
Postsecondary Education 7,061 - - - -116 -116 6,945
Children's and Social Services 18,562 - 1 146 -212 -65 18,497
Justice 5,781 - 2 42 145 189 5,969
Other Programs 33,658 - 13 1,137 3,058 4,208 37,866
Unallocated Funds:
Contingency Fund 4,550 - -373 -1,302 -1,064 -2,738 1,812
Interest on Debt 12,988 - - - - - 12,988
Total 192,992 0 0 209 1,085 1,294 194,286

Fourth Quarter Analysis

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/3mfpmnhj.

Health: $481 million decrease. Notable changes include:

Education: $246 million decrease. Notable changes include:

Postsecondary Education: $116 million decrease. Notable changes include:

Children’s and Social Services: $212 million decrease. Notable changes include:

Justice: $145 million increase. Notable changes include:

Other Programs: $3,058 million increase. Notable changes include:

Actual Unaudited Spending

Actual Unaudited Spending vs. Planned Spending

The Province’s 2022-23 spending plan was $194.3 billion. However, actual unaudited spending was $187.1 billion. This was $7.2 billion (3.7 per cent) less than planned.

Table 2 2022-23 actual unaudited 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 information provided by Treasury Board Secretariat.
Sector Revised 2022-23 Spending Plan 2022-23 Unaudited Spending Unaudited Spending vs. Revised Spending Plan Unaudited Spending vs. Revised Spending Plan (%)
Health 75,331 73,638 -1,693 -2.2%
Education 34,876 34,736 -141 -0.4%
Postsecondary Education 6,945 6,669 -277 -4.0%
Children's and Social Services 18,497 18,222 -275 -1.5%
Justice 5,969 5,807 -163 -2.7%
Other Programs 37,866 35,459 -2,407 -6.4%
Unallocated Funds:
Contingency Fund 1,812 - -1,812 N/A
Interest on Debt 12,988 12,536 -452 -3.5%
Total 194,286 187,065 -7,221 -3.7%

In 2022-23, all sectors spent less than planned. By sector, lower-than-planned spending was led by ‘other programs’ (-$2,407 million, 6.4 per cent), health (-$1,693 million, 2.2 per cent), interest on debt (-$452 million, 3.5 per cent), postsecondary education (-$277 million, 4.0 per cent), children’s and social services (-$275 million, 1.5 per cent), justice (-$163 million, 2.7 per cent) and education (-$141 million, 0.4 per cent). Also, an unspent $1.8 billion end-of-year balance remained in the Contingency Fund. The $7.2 billion in below-planned spending (or net savings) will be used to reduce both the budget deficit and Ontario’s net debt.

For context, the $7.2 billion (3.7 per cent) in net savings for 2022-23 is higher than the net savings recorded in 2021-22 of $4.7 billion (2.5 per cent) but less than the net savings recorded in 2020-21 of $8.6 billion (4.6 per cent). Over the four-year period from 2019-20 to 2022-23, the Province averaged annual savings of $5.9 billion (3.2 per cent).[7]

Figure 1 Planned spending less actual spending, 2019-20 to 2022-23, $ billions

Note: From 2019-20 to 2021-22, annual savings is calculated as the revised spending plan less actual spending from the Public Accounts of Ontario. For 2022-23, savings is calculated as the revised spending plan less actual unaudited spending as of April 24, 2023. Figures exclude planned and actual 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 and the Public Accounts of Ontario

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

Health sector spending: $1,693 million (2.2 per cent) less than planned. Highlights include:

Postsecondary education sector spending: $277 million (4.0 per cent) less than planned. Highlights include:

Children’s and social services sector spending: $275 million (1.5 per cent) less than planned. Highlights include:

Justice sector spending: $163 million (2.7 per cent) less than planned across a number of programs.

Other programs sector spending: $2,407 million (6.4 per cent) less than planned. Highlights include:

2022-23 Spending vs. 2021-22 Spending

This report also compares 2022-23 actual unaudited spending against 2021-22 actual audited spending to provide context for provincial spending trends and to identify significant year-over-year spending changes.

As noted above, the Province spent $187.1 billion in 2022-23. This was $6.6 billion (3.7 per cent) more than was spent in 2021-22. The largest year-over-year spending increase was in education ($2,496 million, 7.7 per cent), followed by ‘other programs’ ($2,114 million, 6.3 per cent), children’s and social services ($915 million, 5.3 per cent), interest on debt ($789 million, 6.7 per cent), justice ($256 million, 4.6 per cent) and postsecondary education ($103 million, 1.6 per cent). Conversely, health sector spending in 2022-23 was $37 million less than in 2021-22.

Table 3 2022-23 unaudited spending vs. 2021-22 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 Public Accounts of Ontario and information provided by Treasury Board Secretariat.
Sector 2022-23 Unaudited Spending 2021-22 Actual Spending 2022-23 vs. 2021-22 2022-23 vs. 2021-22 (%)
Health 73,638 73,674 -37 0.0%
Education 34,736 32,239 2,496 7.7%
Postsecondary Education 6,669 6,565 103 1.6%
Children's and Social Services 18,222 17,307 915 5.3%
Justice 5,807 5,551 256 4.6%
Other Programs 35,459 33,345 2,114 6.3%
Interest on Debt 12,536 11,747 789 6.7%
Total 187,065 180,429 6,637 3.7%

2022-23 Budget Balance Projection

Based on the spending information presented in this report and the FAO’s most recent revenue and spending forecasts,[10] the FAO projects a small budget surplus in 2022-23 of $37 million. In comparison, in the 2023 Ontario Budget,[11] the Province projected a 2022-23 budget deficit of $2.2 billion. The difference between the FAO’s surplus projection and the Province’s deficit projection is $2.2 billion. The actual 2022-23 budget balance will be released as part of the 2022-23 Public Accounts of Ontario in September 2023.

The FAO estimates that 2022-23 total revenue will be $3.3 billion lower and total consolidated expense will be $5.5 billion lower than forecast by the Province in the 2023 budget. The difference between the two forecasts largely reflects more up-to-date information available to the FAO, which includes more recent spending information.[12]

Table 4 2022-23 budget balance projections, 2023 Ontario Budget vs. FAO, $ millions * Consolidated expense includes additional spending (an estimated $10.0 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, and other spending adjustments ** Ontario Teachers’ Pension Plan (OTPP) expense is included in the education sector. Source: 2023 Ontario Budget and FAO analysis of information provided by Treasury Board Secretariat.
Province FAO Difference
Revenue 200,402 197,065 -3,337
Consolidated Expense*
Health 79,804 78,500 -1,304
Education** 35,025 34,889 -136
Postsecondary Education 11,345 11,112 -233
Children’s and Social Services 18,403 18,125 -278
Justice 5,501 5,301 -200
Other Programs** 39,070 36,193 -2,876
Interest on Debt 13,424 12,908 -516
Total Consolidated Expense 202,572 197,028 -5,544
Surplus/(Deficit) -2,170 37 2,207

Status of the Contingency Fund

The Contingency Fund is used to address spending pressures or fund program changes during the fiscal year. The funds within the Contingency Fund 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 the Contingency Fund. In the second and third quarters, the Province transferred $373 million and $1,302 million, respectively, from the Contingency Fund to various programs. In the fourth quarter, the Province transferred a net $1,064 million from the Contingency Fund to various programs, which included $5,484 million from the Contingency Fund to various programs and $4,421 million from various programs to the Contingency Fund.

Table 5 Status of the Contingency Fund in 2022-23, $ millions Source: FAO analysis of information provided by Treasury Board Secretariat.
Opening Balance Q1 Transfers to Ministries Q2 Transfers to Ministries Q3 Transfers to Ministries Q4 Transfers to Ministries Q4 Transfers to C-Fund Balance at Year-End
4,550 0 -373 -1,302 -5,484 4,421 1,812

At year-end, the Contingency Fund had a remaining balance of $1,812 million. The remaining funds in the Contingency Fund will reduce both the budget deficit and Ontario’s net debt.

Table 6 2022-23 transfers from/to the Contingency Fund, $ millions * Due to data limitations, amounts are FAO estimates.Note: Positive values represent transfers from ministry programs to the Contingency Fund.Source: FAO analysis of information provided by Treasury Board Secretariat.
Ministry/Program $ millions
Opening Contingency Fund Balance 4,550
Less: First Quarter Transfers to Ministries 0
Less: Second Quarter Transfers to Ministries -373
Less: Third Quarter Transfers to Ministries -1,302
Less: Fourth Quarter Transfers to Ministries
Ministry of Economic Development, Job Creation and Trade
Economic Development, Job Creation and Trade* -20
Ministry of Heritage, Sport, Tourism and Culture Industries
Ontario Science Centre -4
Active Recreation >-1
Ministry of Indigenous Affairs
Negotiated Settlements -5,000
Indigenous Affairs, Land Claims and Self-Government Initiatives and Indigenous Affairs Capital Program -24
Ministry of Northern Development, Mines, Natural Resources and Forestry
Northern Development (Capital Asset), Ministry Administration, Environmental Remediation and Northern Economic Development -175
Infrastructure for Natural Resource Management (Capital Asset), Infrastructure for Natural Resource Management (Operating Expense), Sustainable Resource Management and Other Programs -43
Ministry of the Solicitor General
Other Programs -114
Other Programs Across All Ministries* -104
Total Fourth Quarter Transfers to Ministries -5,484
Add: Fourth Quarters Transfers to the Contingency Fund from Ministries
Ministry of the Attorney General
Legal Aid Ontario 81
Ministry of Children, Community and Social Services
Financial and Employment Supports* 32
Ontario Child Benefit* 119
Ministry of Colleges and Universities
Research Operating Costs 8
Research Support Capital Expense* 18
Colleges, Universities and Student Support (Operating Asset)* 71
Colleges, Universities and Student Support* 90
Ministry of Economic Development, Job Creation and Trade
Economic Development, Job Creation and Trade* 102
Economic Development, Job Creation and Trade (Operating Asset)* 90
Ministry of Education
Support for Elementary and Secondary Education (Capital) 94
Policy Development and Program Delivery* 149
Ministry of Energy
Energy Development and Management (Operating Asset)* 117
Electricity Price Mitigation Programs* 316
Ministry of the Environment, Conservation and Parks
Ontario Parks Infrastructure (Capital Asset) 1
Ministry of Finance
Other Programs 7
Municipal Support Programs 20
Ontario Digital Service 22
Tax and Benefits Administration 27
Ministry of Government and Consumer Services
Enterprise Information and Information Technology Services <1
Information, Privacy and Archives <1
Enterprise Information and Information Technology Services (Capital Asset) <1
Other Programs <1
Ministry Administration 2
Government Services Integration Cluster 6
Ontario Shared Services 18
Ontario Shared Services (Operating Asset) 45
Realty (Capital Asset)* 81
Ministry of Health
Health Capital* 200
Population and Public Health* 200
Ministry of Heritage, Sport, Tourism and Culture Industries
Tourism and Culture Capital* 29
Agency Programs (Capital Asset)* 39
Ministry of Infrastructure
Infrastructure Programs* 819
Ministry of Long-Term Care
Long-Term Care Homes – Operations* 77
Ministry of the Solicitor General
Emergency Services Telecommunications* 122
Emergency Services Telecommunications (Capital Asset)* 252
Ministry of Transportation
Agency Oversight and Partnerships (Capital)* 900
Treasury Board Secretariat
Labour Relations and Compensation* 18
Bulk Media Buy* 41
Other Programs Across All Ministries* 206
Total Fourth Quarter Transfers to the Contingency Fund 4,421
Contingency Fund Balance at Year-End 1,812

Graphical Descriptions

Figure 1 Planned spending less actual spending, 2019-20 to 2022-23, $ billions Note: From 2019-20 to 2021-22, annual savings is calculated as the revised spending plan less actual spending from the Public Accounts of Ontario. For 2022-23, savings is calculated as the revised spending plan less actual unaudited spending as of April 24, 2023. Figures exclude planned and actual 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 and the Public Accounts of Ontario. Return to image
Fiscal year Savings ($ billions) Average savings over four years ($ billions)
2019-20 3.2 5.9
2020-21 8.6
2021-22 4.7
2022-23 7.2

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] For more analysis see FAO, “Economic and Budget Outlook, Spring,” 2023.

[4] The FAO’s spending forecast is primarily based on provincial spending information as of April 24, 2023. The Province’s forecast is based primarily on information available as of February 23, 2023. (2023 Ontario Budget, p. 129.)

[5] 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.

[6] 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.

[7] From 2019-20 to 2021-22, annual savings is calculated as the revised spending plan less actual spending from the Public Accounts of Ontario. For 2022-23, savings is calculated as the revised spending plan less actual unaudited spending as of April 24, 2023. Figures exclude planned and actual 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.

[8] Including a total of $905 million in less than planned spending for three vote-items that was not recorded in the Province’s Integrated Financial Information System (IFIS) as of April 24, 2023, but is expected to be recorded as spending during the finalization of the 2022-23 Public Accounts of Ontario.

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

[10] For more analysis see FAO, “Economic and Budget Outlook, Spring,” 2023.

[11] Tabled on March 23, 2023.

[12] The FAO’s spending forecast is primarily based on provincial spending information as of April 24, 2023. The Province’s forecast is based primarily on information available as of February 23, 2023. (2023 Ontario Budget, p. 129.).