Expenditure Monitor 2023-24: Q2

Publish date: December 19, 2023 ISSN 2562-9883
This report provides information on spending by the Province through the first two quarters of the 2023-24 fiscal year (April 1, 2023 to September 30, 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: Salma Ahmed (Financial Analyst) and Michelle Gordon (Senior Financial Analyst), under the direction of Luan Ngo (Chief Financial Analyst).

© King’s Printer for Ontario, 2023

Citation
Expenditure Monitor 2023-24: Q2, Financial Accountability Office of Ontario, 2023.
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Highlights

2023-24 Spending Plan

Changes to the 2023-24 Spending Plan

First and Second Quarter Spending: Actual Unaudited Spending vs. Planned Spending

First and Second Quarter Spending: 2023-24 Spending vs. 2022-23 Spending

Status of the Contingency Fund

Introduction

This report provides information on spending by the Government of Ontario (the Province) through the first two quarters of the 2023-24 fiscal year, from April 1, 2023 to September 30, 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 September 30, 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.

2023-24 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 2023-24 fiscal year with a spending plan of $197.3 billion.[6]

Changes to the 2023-24 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 second quarter, September 30, 2023, the Province’s spending plan was down $32 million.

By sector, the largest spending plan increase during the second quarter of 2023-24 was in the health sector ($180 million), followed by other programs ($76 million), and justice ($21 million). This was entirely offset by a $277 million transfer from the Contingency Fund.

Table 1 Changes to the 2023-24 spending plan by sector, as of September 30, 2023, $ 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, colleges and children’s aid societies), the Province’s agencies and the legislative offices.Source: FAO analysis of information provided by Treasury Board Secretariat.
Sector 2023-24 Spending Plan Q1 Changes Q2 Changes Total Changes Revised 2023-24 Spending Plan
Health 77,090 -14 180 166 77,256
Education 36,281 2 - 2 36,283
Postsecondary Education 7,226 1 - 1 7,228
Children, Community and Social Services 19,526 33 - 33 19,559
Justice 5,664 190 21 212 5,875
Other Programs 33,756 604 76 680 34,435
Unallocated Funds:
Contingency Fund 4,000 -849 -277 -1,126 2,874
Interest on Debt 13,764 - - - 13,764
Total 197,307 -32 - -32 197,275

Second Quarter Analysis

This section highlights key second 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/h8h9n9uh.

Health: $180 million increase. This is due to a $180 million increase for Health Services (Vote-Item 1416-1), for Home Care.

Justice: $21 million increase. Notable changes include:

Other Programs: $76 million increase. Notable changes include:

Actual Unaudited Spending to Date

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 planned spending by quarter, which reflects historical spending patterns, seasonality and other factors. For 2023-24, the Province plans to spend $42.8 billion in the first quarter, $42.8 billion in the second quarter, $46.3 billion in the third quarter and $65.4 billion in the fourth quarter.[7]

Combined, over the first two quarters of 2023-24, the Province planned to spend $85.6 billion. However, actual unaudited spending was $83.6 billion. This was $2.0 billion (2.3 per cent) less than planned.

Figure 1 2023-24 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, colleges and children’s aid societies), the Province’s agencies and the legislative offices. Planned fourth quarter spending is significantly higher than planned spending in each of the first three quarters due to year-end accounting adjustments

Source: FAO analysis of information provided by Treasury Board Secretariat

By sector, lower-than-planned spending was led by other programs (-$1,530 million, 10.7 per cent), followed by interest on debt (-$861 million, 12.5 per cent), children, community and social services (-$209 million, 2.2 per cent), education (-$129 million, 1.0 per cent) and postsecondary education (-$127 million, 3.7 per cent). Spending was above plan for two sectors: health ($811 million, 2.3 per cent) and justice ($63 million, 2.3 per cent).

Table 2 2023-24 actual unaudited spending by sector, as of September 30, 2023, $ millions Note: Figures exclude spending on some assets and additional spending by the broader public sector organizations controlled by the Province (hospitals, school boards, colleges and children’s aid societies), the Province’s agencies and the legislative offices.Source: FAO analysis of information provided by Treasury Board Secretariat.
Sector Revised 2023-24 Spending Plan Planned Spending at End of Q2 Actual Unaudited Spending at End of Q2 Actual vs. Planned at End of Q2 Actual vs. Planned (%)
Health 77,256 35,887 36,698 811 2.3%
Education 36,283 12,783 12,655 -129 -1.0%
Postsecondary Education 7,228 3,417 3,290 -127 -3.7%
Children, Community and Social Services 19,559 9,611 9,402 -209 -2.2%
Justice 5,875 2,699 2,762 63 2.3%
Other Programs 34,435 14,271 12,741 -1,530 -10.7%
Unallocated Funds:
Contingency Fund 2,874 - - - N/A
Interest on Debt 13,764 6,893 6,032 -861 -12.5%
Total 197,275 85,561 83,579 -1,982 -2.3%

The rest of this section highlights key vote-item spending that was above and below plan in the first two quarters of 2023-24. For information on spending by all of the Province’s programs and ministries, visit the FAO’s website at: https://tinyurl.com/h8h9n9uh.

Health sector spending: $811 million (2.3 per cent) higher than planned. Highlights include:

Education sector spending: $129 million (1.0 per cent) less than planned. Highlights include:

Postsecondary education sector spending: $127 million (3.7 per cent) less than planned. Highlights include:

Children, community and social services sector spending: $209 million (2.2 per cent) less than planned. Highlights include:

Justice sector spending: $63 million (2.3 per cent) higher than planned. Highlights include:

Other programs sector spending: $1,530 million (10.7 per cent) less than planned. Highlights include:

Interest on Debt: $861 million (12.5 per cent) less than planned as a result of higher than planned interest revenue on the Province’s cash reserves.[8]

2023-24 Spending vs. 2022-23 Spending

This report also compares 2023-24 actual unaudited spending against 2022-23 spending to provide context for provincial spending trends and to identify significant year-over-year spending changes.

As noted above, over the first and second quarters of 2023-24, the Province spent $83.6 billion. This was $3.1 billion (3.8 per cent) more than was spent in the same period of 2022-23. The largest year-over-year spending increase was in health ($1,625 million, 4.6 per cent), followed by education ($611 million, 5.1 per cent), children, community and social services ($495 million, 5.6 per cent), other programs ($462 million, 3.8 per cent), justice ($146 million, 5.6 per cent), and postsecondary education ($39 million, 1.2 per cent). Conversely, interest on debt spending was $302 million (4.8 per cent) less than during the same period in 2022-23.

Table 3 Actual unaudited spending through the end of the second quarter by sector, 2023-24 vs. 2022-23, $ millions Note: Figures exclude spending on some assets and additional spending by the broader public sector organizations controlled by the Province (hospitals, school boards, colleges and children’s aid societies), the Province’s agencies and the legislative offices.Source: FAO analysis of information provided by Treasury Board Secretariat.
Sector 2023-24 Spending at End of Q2 2022-23 Spending at End of Q2 2023-24 vs. 2022-23 2023-24 vs. 2022-23 (%)
Health 36,698 35,073 1,625 4.6%
Education 12,655 12,044 611 5.1%
Postsecondary Education 3,290 3,250 39 1.2%
Children, Community and Social Services 9,402 8,908 495 5.6%
Justice 2,762 2,616 146 5.6%
Other Programs 12,741 12,279 462 3.8%
Interest on Debt 6,032 6,334 -302 -4.8%
Total 83,579 80,503 3,076 3.8%

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 2023-24 fiscal year with a total of $4.0 billion in the Contingency Fund. In the first and second quarters, the Province transferred $849 million and $277 million, respectively, from the Contingency Fund to various programs. This results in a remaining balance in the Contingency Fund, as of September 30, of $2.9 billion.

In the 2023 Ontario Economic Outlook and Fiscal Review, the Province added $2.5 billion to the Contingency Fund. However, this top-up occurred after the end of the second quarter, September 30, 2023. It is expected to be reflected in the government’s financial accounts in the third quarter of 2023-24.

Table 4 2023-24 transfers from the Contingency Fund, as of September 30, 2023, $ millions Source: FAO analysis of information provided by Treasury Board Secretariat.
Ministry/Program $ millions
Opening Contingency Fund Balance 4,000
Less: First Quarter Transfers to Ministries -849
Less: Second Quarter Transfers to Ministries
Ministry of the Attorney General
Agency Relations -6
Ministry of Economic Development, Job Creation and Trade
Strategic Investments -11
Life Sciences Strategy -9
Ministry of Health
Home Care -180
Ministry of Municipal Affairs and Housing
National Housing Strategy Programs -42
Ministry of Natural Resources and Forestry
Regional Operations Support Programs -8
Ministry of the Solicitor General
Ontario Police College -15
Ministry of Tourism, Culture and Sport
Ontario Arts Council -5
Total Second Quarter Transfer to Ministries -277
Contingency Fund Balance as of September 30, 2023 2,874

Graphical Descriptions

Figure 1 2023-24 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, colleges and children’s aid societies), the Province’s agencies and the legislative offices. Planned fourth quarter spending is significantly higher than planned 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
Planned Spending 42,756 42,805 46,306 65,408
Actual Unaudited Spending 40,224 43,355 - -

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 $197.3 billion spending plan excludes $7.4 billion in additional planned spending by the broader public sector organizations controlled by the Province (hospitals, school boards, colleges and children’s aid societies), the Province’s agencies and the legislative offices. The $7.4 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 $197.3 billion spending plan excludes $1.4 billion in planned spending on operating assets and $4.7 billion in planned spending on capital assets.

[3] Planned fourth quarter spending is significantly higher than planned spending in each of the first three quarters due to year-end accounting adjustments.

[4] In the 2023 Ontario Economic Outlook and Fiscal Review, the Province added $2.5 billion to the Contingency Fund. However, this top-up occurred after the end of the second quarter, September 30, 2023. It is expected to be reflected in the government’s financial accounts in the third quarter of 2023-24.

[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 $197.3 billion spending plan excludes $7.4 billion in additional planned spending by the broader public sector organizations controlled by the Province (hospitals, school boards, colleges and children’s aid societies), the Province’s agencies and the legislative offices. The $7.4 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 $197.3 billion spending plan excludes $1.4 billion in planned spending on operating assets and $4.7 billion in planned spending on capital assets.

[7] Planned fourth quarter spending is significantly higher than planned spending in each of the first three quarters due to year-end accounting adjustments.

[8] The Province presents interest on debt spending net of interest revenue earned from provincial financial assets.

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

[10] The Province presents interest on debt spending net of interest revenue earned from provincial financial assets.