Expenditure Monitor 2023-24: Q3

Expenditure Monitor 2023-24: Q3

Publish date: March 6, 2024 ISSN 2562-9883
This report provides information on spending by the Province through the first three quarters of the 2023-24 fiscal year (April 1, 2023 to December 31, 2023).
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About this Document

Established by the Financial Accountability Officer Act, 2013, the Financial Accountability Office of Ontario (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 Matthew Gurnham (Director, Financial Analysis) and Luan Ngo (Chief Financial Analyst).

© King’s Printer for Ontario, 2024

Citation
Expenditure Monitor 2023-24: Q3, Financial Accountability Office of Ontario, 2024.
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Highlights

2023-24 Spending Plan

Changes to the 2023-24 Spending Plan

Spending to Date: Actual Unaudited Spending versus Planned Spending

Spending to Date: 2023-24 Spending versus 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 three quarters of the 2023-24 fiscal year, from April 1, 2023 to December 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 December 31, 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.[4] The Province started the 2023-24 fiscal year with a spending plan of $197.3 billion.[5]

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 third quarter, December 31, 2023, the Province’s spending plan was up $2.3 billion.

By sector, during the third quarter of 2023-24, the Province increased the ‘other programs’ spending plan by $139 million and decreased the postsecondary education spending plan by $8 million. Additionally, there was a $2.2 billion net increase in the Contingency Fund.

Table 1 Changes to the 2023-24 spending plan by sector, as of December 31, 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 Q3 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 - -8 -6 7,220
Children, Community and Social Services 19,526 33 - - 33 19,559
Justice 5,664 190 21 - 212 5,875
Other Programs 33,756 604 76 139 819 34,574
Unallocated Funds:
Contingency Fund 4,000 -849 -277 2,212 1,086 5,086
Interest on Debt 13,764 - - - - 13,764
Total 197,307 -32 0 2,343 2,311 199,618

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/ahx8ws8j.

Other Programs: $139 million increase. Notable changes include:

Actual Unaudited Spending to Date

Actual Unaudited Spending versus Planned Spending

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, $46.8 billion in the third quarter and $67.3 billion in the fourth quarter.[6]

Combined, over the first three quarters of 2023-24, the Province planned to spend $132.3 billion. However, actual unaudited spending was $132.7 billion. This was $0.4 billion (0.3 per cent) more than planned.

Figure 1 2023-24 actual unaudited spending versus 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, higher-than-planned spending was led by education ($2,620 million, 12.9 per cent), followed by health ($1,506 million, 2.8 per cent) and justice ($163 million, 4.0 per cent). Spending was less-than-planned in four sectors: ‘other programs’ (-$2,589 million, -11.3 per cent), interest on debt (‑$1,119 million, -10.8 per cent), children, community and social services (‑$133 million, -0.9 per cent) and postsecondary education (‑$66 million, -1.2 per cent).

Table 2 2023-24 actual unaudited spending by sector, as of December 31, 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 Q3 Actual Unaudited Spending at End of Q3 Actual vs. Planned at End of Q3 Actual vs. Planned (%)
Health 77,256 54,723 56,229 1,506 2.8
Education 36,283 20,379 22,999 2,620 12.9
Postsecondary Education 7,220 5,326 5,260 -66 -1.2
Children, Community and Social Services 19,559 14,576 14,443 -133 -0.9
Justice 5,875 4,053 4,216 163 4.0
Other Programs 34,574 22,950 20,361 -2,589 -11.3
Unallocated Funds:
Contingency Fund 5,086 - - - N/A
Interest on Debt 13,764 10,318 9,200 -1,119 -10.8
Total 199,618 132,326 132,708 382 0.3

The rest of this section highlights key vote-item spending that was above and below plan in the first three 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/ahx8ws8j.

Health sector spending: $1,506 million (2.8 per cent) higher than planned. Highlights include:

Education sector spending: $2,620 million (12.9 per cent) higher than planned. Highlights include:

Postsecondary education sector spending: $66 million (1.2 per cent) less than planned. Highlights include:

Children, community and social services sector spending: $133 million (0.9 per cent) less than planned. Highlights include:

Justice sector spending: $163 million (4.0 per cent) higher than planned. Highlights include:

Other programs sector spending: $2,589 million (11.3 per cent) less than planned. Highlights include:

Interest on Debt: $1,119 million (10.8 per cent) less than planned as a result of higher than planned interest revenue on the Province’s cash reserves.[7]

2023-24 Spending versus 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 three quarters of 2023-24, the Province spent $132.7 billion. This was $9.9 billion (8.1 per cent) more than was spent in the same period of 2022-23. The largest year-over-year spending increase was in education ($3,803 million, 19.8 per cent), followed by health ($3,603 million, 6.8 per cent), ‘other programs’ ($1,614 million, 8.6 per cent), children, community and social services ($874 million, 6.4 per cent), justice ($235 million, 5.9 per cent), and postsecondary education ($153 million, 3.0 per cent). Conversely, interest on debt spending was -$359 million (-3.8 per cent) less than during the same period in 2022-23.

Table 3 Actual unaudited spending through the end of the third quarter by sector, 2023-24 versus 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 Q3 2022-23 Spending at End of Q3 2023-24 vs. 2022-23 2023-24 vs. 2022-23 (%)
Health 56,229 52,626 3,603 6.8
Education 22,999 19,196 3,803 19.8
Postsecondary Education 5,260 5,108 153 3.0
Children, Community and Social Services 14,443 13,570 874 6.4
Justice 4,216 3,982 235 5.9
Other Programs 20,361 18,747 1,614 8.6
Interest on Debt 9,200 9,558 -359 -3.8
Total 132,708 122,786 9,922 8.1

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. In the third quarter, the Province topped up the Contingency Fund by $2.5 billion but transferred out $288 million to fund various programs. This results in a remaining balance in the Contingency Fund, as of December 31, of $5.1 billion.

In contrast, in the government’s 2023-24 Third Quarter Finances, the Province reported a remaining Contingency Fund balance of $3.3 billion. However, the 2023-24 Third Quarter Finances included transactions that occurred after the end of the third quarter, December 31, 2023. These transactions are expected to be reflected in the government’s financial accounts in the fourth quarter of 2023-24.

Table 4 2023-24 transfers from and top-ups to the Contingency Fund, as of December 31, 2023, $ millions Source: FAO analysis of information provided by Treasury Board Secretariat.
Ministry/Program $ millions
Opening Contingency Fund Balance as of April 1, 2023 4,000
Less: First Quarter Transfers to Ministries -849
Less: Second Quarter Transfers to Ministries -277
Add: Third Quarter Top-Up 2,500
Less: Third Quarter Transfers to Ministries
Ministry of Citizenship and Multiculturalism
Anti-Racism Initiatives -20
Anti-Racism Directorate – Services -1
Ministry of Economic Development, Job Creation and Trade
Strategic Investments -160
Ministry of Environment, Conservation and Parks
Environment Planning and Action – Greenbelt Foundation -2
Ontario Parks > -1
Ministry of Finance
Ontario Infrastructure Investment -5
Ministry of Mines
Focused Flow-Through Share Tax Credit -12
Ministry of Natural Resources and Forestry
Public Protection -81
Ministry of Public and Business Service Delivery
Enterprise Business and Financial Services -1
Ministry of Tourism, Culture and Sport
Agencies and Attractions Sector Support -7
Total Third Quarter Transfers to Ministries -288
Contingency Fund Balance as of December 31, 2023 5,086
Figure 1 2023-24 actual unaudited spending versus 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. Return to image
Q1 Q2 Q3 Q4
Planned Spending 42,756 42,805 46,765 67,292
Actual Unaudited Spending 40,224 43,355 49,129 -

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] 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 $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.

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

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

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

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