Ontario Health Sector: 2023 Budget Spending Plan Review

Ontario Health Sector: 2023 Budget Spending Plan Review

Publish date: May 31, 2023 ISSN 2562-4008
This report reviews the Province’s health sector spending plan in the 2023 Ontario Budget and the 2023-24 Expenditure Estimates.
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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.

Prepared by: Matt Gurnham (Director, Financial Analysis [A]) and Ava Rahbari(Financial Analyst) under the direction of Luan Ngo (Chief Financial Analyst [A]).

This report has been prepared with the benefit of publicly available information and information provided by the Ministries of Health, Long-Term Care and Finance, and Treasury Board Secretariat.

All dollar amounts are in Canadian, current dollars (i.e., not adjusted for inflation) unless otherwise noted.

© King’s Printer for Ontario, 2023

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Ontario Health Sector: 2023 Budget Spending Plan Review, Financial Accountability Office of Ontario, 2023.
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1. Summary

Health Sector Spending Outlook

What Has Changed Since the FAO’s Last Outlook?

Spending Outlook by Program Area

Key Risks to the FAO’s Health Sector Spending Forecast

Federal Funding for Ontario Health Sector Spending

2023-24 Expenditure Estimates Review

2. Introduction

This report reviews the Province’s health sector spending plan in the 2023 Ontario Budget and the 2023-24 Expenditure Estimates. Health sector spending includes the combined spending by the Ministries of Health and Long-Term Care. The report is organized as follows:

3. Health Sector Spending Outlook to 2025-26

FAO Projection vs. the 2023 Ontario Budget

Based on the FAO’s estimate of the cost of current health sector programs and announced commitments, the FAO projects that health sector spending will grow at an average annual rate of 3.4 per cent between 2021-22 and 2025-26, reaching $86.7 billion in 2025-26. In comparison, the funding allocated by the Province in the 2023 Ontario Budget grows at a higher average annual rate of 3.7 per cent, reaching $87.6 billion by 2025-26.

Overall, the FAO projects that the Province has allocated a total of $4.4 billion more than what is necessary to fund existing programs and announced commitments from 2022-23 to 2025-26. This $4.4 billion in excess funds consists of $1.3 billion in 2022-23, $0.4 billion in 2023-24, $1.8 billion in 2024-25 and $0.9 billion in 2025-26.

Figure 1 Health sector spending projections, FAO vs. 2023 Ontario Budget, $ billions

Source: Public Accounts of Ontario, 2023 Ontario Budget, and FAO analysis of information provided by the Province

What Has Changed Since the FAO’s Last Outlook?

The FAO’s estimate that the Province has allocated $4.4 billion in excess funds between 2022-23 and 2025-26 is a significant change from the FAO’s previous estimate of a $10.0 billion funding shortfall over the same period.[5] This reversal is due to the Province adding $15.2 billion in new funding to its health sector spending plan in the 2023 Ontario Budget, which is partially offset by a $0.8 billion increase in the FAO’s health sector spending forecast.

Table 1 Change in the health sector funding gap, Province vs. FAO, $ billions Source: 2023 Ontario Budget and FAO.
$ billions Total from 2022-23 to 2025-26
FAO estimated funding shortfall in the 2022 Budget/Fall Economic Statement -10.0
New planned health sector spending in the 2023 Budget 15.2
Increase in the FAOs health sector spending forecast -0.8
FAO estimated excess funding in the 2023 Budget 4.4

Changes to the Province’s Health Sector Spending Plan

The 2023 Ontario Budget included $15.2 billion in new health sector funding from 2022-23 to 2025-26, compared to the spending plan in the 2022 Ontario Budget and Fall Economic Statement. This $15.2 billion in new funding consists of increases of $3.2 billion in 2023-24, $5.9 billion in 2024-25 and $6.2 billion in 2025-26.[6]

Of the $15.2 billion in new health sector funding, the FAO estimates that:

Changes to the FAO’s Health Sector Spending Forecast

Since the release of the FAO’s March 2023 report,[10] the FAO’s health sector spending forecast has increased by a total of $0.8 billion from 2022-23 to 2025-26 due to the introduction of new programs and updated program spending forecasts. This overall increase in projected spending is driven by higher expected spending in hospitals, community programs, other programs and health capital, partially offset by lower projected spending in long-term care and Ontario public drug programs (see Chapter 4 for more information).

4. Spending Outlook by Program Area to 2027-28

From 2021-22 to 2027-28, the FAO projects that total health sector spending will grow at an average annual rate of 3.9 per cent. The two largest program areas, hospitals and OHIP (physicians and practitioners), are expected to grow at average annual rates of 3.6 per cent and 4.3 per cent, respectively. Ontario public drug programs spending is projected to grow at an average annual rate of 5.1 per cent, followed by community programs (5.1 per cent), and mental health and addictions programs (4.6 per cent). Long-term care is anticipated to experience the highest average annual growth at 9.2 per cent, while other programs is projected to decline by an average -1.7 per cent per year due to the expiry of time-limited COVID-19-related spending. Lastly, spending on health capital is projected to grow at 3.2 per cent per year.

Given that there were significant time-limited investments related to the COVID-19 pandemic in 2021-22, and that the COVID-19 pandemic impacted service levels in many areas of the health sector, the FAO has also provided growth rates from 2019-20 to 2027-28 to provide a better indication of base health sector program spending growth. From 2019-20 to 2027-28, the FAO estimates that base health sector spending will grow at an average annual rate of 5.1 per cent. This projected base health sector spending growth is significantly higher than the 3.0 per cent health sector spending growth over the prior eight-year period from 2011-12 to 2019-20. This increase in spending growth is primarily due to the Province’s significant planned investments in long-term care, home care and hospital capacity.[11]

Table 2 FAO projected health sector spending by program area to 2027-28, $ billions Source: 2019-20 and 2021-22 Public Accounts of Ontario and FAO.
Program Area 2021-22 Actual Spending ($ billions) 2027-28 Projected Spending ($ billions) Average Annual Growth Rate 2021-22 to 2027-28 (%) Average Annual Growth Rate 2019-20 to 2027-28 (%)
Hospitals 26.4 32.6 3.6 4.5
OHIP (physicians and practitioners) 16.6 21.3 4.3 3.8
Ontario public drug programs 5.3 7.2 5.1 5.2
Community programs 5.2 7.1 5.1 5.7
Mental health and addictions programs 2.0 2.6 4.6 4.5
Long-term care 6.8 11.6 9.2 12.9
Other programs 11.2 10.1 -1.7 3.8
Health capital 2.2 2.6 3.2 4.3
Total Health Sector 75.7 95.1 3.9 5.1

The following provides more information on each of the major program areas in the FAO’s forecast.[12]

Key Risks to the FAO’s Health Sector Spending Forecast

There are notable risks that could increase health sector spending above the FAO’s forecast. These are discussed below.

Above-average increases to health sector wages: The FAO’s spending forecast assumes wage growth consistent with existing collective agreements and, for new collective agreements or non-unionized health sector workers, historical long-term average growth in wages. However, factors such as high inflation and ongoing human resource shortages in the health sector could place significant upward pressure on health sector wages.[16]

The legal challenge to Bill 124: On November 29, 2022, the Ontario Superior Court of Justice ruled that Bill 124, which limits base salary increases for most Ontario public sector employees to one per cent per year for a period of three years, was in violation of the Canadian Charter of Rights and Freedoms and was declared to be void and of no effect. The government has appealed this decision, with hearings scheduled at the Ontario Court of Appeal from June 20 to 22, 2023.

Some health sector collective agreements subject to Bill 124 included reopener clauses to allow unions to seek retroactive wage increases if Bill 124 was found to be unconstitutional. Although the Bill 124 decision by the Ontario Superior Court of Justice is still under appeal, a number of unions have already successfully obtained retroactive wage increases. For example, arbitration decisions awarded Ontario Nurses’ Association members in hospitals additional wage increases of 0.75 per cent 2020, 1.0 per cent in 2021 and 2.0 per cent in 2022.[17] Overall, the FAO estimates that, as of the writing of this report, publicly available Bill 124-related retroactive wage increases will cost the Province approximately $0.9 billion to 2025-26;[18] these costs are included in the FAO’s health sector spending forecast.

However, looking forward, if the government is unsuccessful in its appeal and all hospital employees are awarded retroactive compensation, the FAO estimates that hospital spending could increase by an additional $2.7 billion from 2022-23 to 2027-28, compared to the FAO’s current spending forecast.

New programs or expansion commitments: The FAO’s health sector spending forecast includes cost estimates for existing programs and announced expansion commitments. Any new programs or expansion commitments would result in health sector spending above the FAO’s outlook.

5. Federal Funding for Ontario Health Sector Spending

Federal Transfers in 2022-23

The federal government supports provincial health sector spending through a number of programs and agreements, which are estimated to total $19.2 billion in 2022-23. The largest transfer program is the Canada Health Transfer (CHT), which provided Ontario with $17.5 billion in 2022-23. In addition, the federal government provided a one-time CHT top-up of $776 million to Ontario in 2022-23, to support the health care system in the post-pandemic environment and alleviate existing waitlists and backlogs.

The federal government also supports provincial health sector spending through time-limited agreements, the largest of which is the Home and Community Care and Mental Health and Addictions Services Funding Agreement. This 10-year agreement will provide the Province with a total of $4.2 billion through 2026-27, including $465 million in 2022-23. Lastly, the federal government provides transfers directly to the Province’s health institutions, largely hospitals, as well as to the Province for programs supporting various communities including Indigenous peoples, veterans and unsheltered people. In 2022-23, these transfers totalled an estimated $435 million.

Figure 2 Federal health transfers to Ontario, 2022-23, $ millions

Note: “Home Care and Mental Health” is the Home and Community Care and Mental Health and Addictions Services Funding Agreement

Source: Public Accounts of Ontario, 2023 Ontario Budget, and FAO analysis of information provided by the Province and Government of Canada

Changes to Federal Transfers in 2023

In February 2023, Ontario reached agreements in principle with the federal government that will increase federal health transfers to the Province. Under the new agreements, the FAO estimates that the Province will receive $7.7 billion in additional federal health funding over five years from 2023-24 to 2027-28.[19] These agreements in principle include:

Figure 3 FAO projected federal health transfers, previous arrangements vs. new agreements, $ billions

Source: 2019-20 and 2021-22 Public Accounts of Ontario and FAO.

Federal Transfers as a Share of Provincial Health Sector Spending

From 2012-13 to 2019-20, federal health transfers as a share of Ontario health sector spending increased steadily from 22.2 per cent to 26.1 per cent, as the annual growth rate of the CHT outpaced the growth rate of Ontario’s health sector spending. In 2020-21, federal transfers increased to 33.3 per cent of Ontario health sector spending, due to the addition of $6.0 billion in time-limited COVID-19-related transfers, and then fell to 25.1 per cent in 2021-22 as most of the time-limited COVID-19-related transfers expired. In 2022-23, the FAO estimates that federal health transfers equalled 24.5 per cent of the Province’s total health sector spending, the lowest level since 2015-16.

Looking ahead, after accounting for the increases to federal health transfers noted above, the FAO projects that the federal share of Ontario’s health sector spending will increase to 27.4 per cent in 2023-24. However, federal transfers as a share of Ontario health sector spending will then gradually decline to 26.1 per cent in 2027-28, due to the expiry of the CHT top-up funding, federal long-term care funding, and the Home and Community Care and Mental Health and Addictions Services Funding Agreement.

Figure 4 FAO projected federal health transfers as a proportion of Ontario health sector spending, per cent

Source: Public Accounts of Ontario, 2023 Ontario Budget, FAO analysis of information provided by the Province, and publicly available Government of Canada information

Although the federal government increased transfers to the Province by $7.7 billion over five years to 2027-28, the Ontario government, through the Council of the Federation, previously requested an increase in CHT funding so that federal health transfers would support 35 per cent of all annual provincial-territorial health spending.[21] The FAO estimates that, in 2023-24, an additional $6.1 billion in CHT funding would be required to meet the 35 per cent target specifically for Ontario, increasing to $8.5 billion in 2027-28. Overall, to reach the 35 per cent funding target request from 2023-24 to 2027-28, the federal government would need to provide Ontario with an additional $35.6 billion over the five-year period.

6. 2023-24 Expenditure Estimates Review

This chapter reviews 2023-24 requested and projected spending for the Ministries of Health and Long-Term Care, as outlined in the 2023-24 Expenditure Estimates, by program vote (Supply Bill spending), standalone legislation (statutory) spending, and other spending (consolidation and other adjustments).

Ministry of Health

Vote 1401 – Ministry Administration Program

The Ministry Administration Program supports the delivery of all programs and services offered by MOH. This program vote contains only one sub-program (item), Ministry Administration, which is largely for salaries, wages and employee benefits, and services;[22] it does not include any transfer payment programs.

Overall, the spending request for Vote 1401 is up $13 million, or 15.5 per cent, from 2022-23 spending.

Vote 1401 Ministry Administration Program Note: “2022-23 Spending” is unaudited spending based on the FAO’s analysis of transactions recorded in the Province’s Integrated Financial Information System (IFIS) as of April 25, 2023. All figures are unaudited, as final audited figures are not available until the release of the Public Accounts of Ontario, approximately six months after the end of the fiscal year. Source: FAO analysis of information provided by Treasury Board Secretariat and the 2023-24 Expenditure Estimates.
Item Ministry Administration Program (Vote 1401) 2022-23 Spending ($ millions) 2023-24 Estimates ($ millions) 1-Year Change ($ millions) 1-Year Growth (%)
1 Ministry Administration
Salaries, Wages and Employee Benefits 54 56 2 3.7
Services 30 38 8 26.3
Other Spending 1 5 3 257.3
Total Supply Vote 86 99 13 15.5

Vote 1402 – Health Policy and Research Program

The Health Policy and Research Program integrates research across the ministry to support legislation and policy development. This program vote includes only one sub-program (item), Health Policy and Research, which mostly consists of a transfer payment to support Clinical Education.

Overall, the spending request for Vote 1402 is up $159 million, mostly driven by a $148 million spending request increase for Clinical Education. This spending growth reflects increased health workforce investments through the Enhanced Extern and Supervised Practice Experience Partnership Programs.

Vote 1402 Health Policy and Research Program Note: “2022-23 Spending” is unaudited spending based on the FAO’s analysis of transactions recorded in the Province’s Integrated Financial Information System (IFIS) as of April 25, 2023. All figures are unaudited, as final audited figures are not available until the release of the Public Accounts of Ontario, approximately six months after the end of the fiscal year. Source: FAO analysis of information provided by Treasury Board Secretariat and the 2023-24 Expenditure Estimates.
Item Health Policy and Research Program (Vote 1402) 2022-23 Spending ($ millions) 2023-24 Estimates ($ millions) 1-Year Change ($ millions) 1-Year Growth (%)
1 Health Policy and Research
Clinical Education 875 1,023 148 17.0
Applied Health Evidence Program 34 32 -1 -4.2
Salaries, Wages and Employee Benefits 15 20 5 32.5
Services 3 10 7 215.4
Other Spending <1 1 1 513.8
Total Supply Vote 927 1,086 159 17.1

Vote 1403 – Digital Health and Information Management Program

The Digital Health and Information Management Program supports the management of the Province’s health system information and technology, as well as data on health patients and providers. This program vote contains only one sub-program (item), Digital Health and Information Management. The sub-program includes two transfer payments, the largest of which is $149 million for Digital Health Strategy and Programs, which is up $52 million, or 52.9 per cent, from 2022-23 spending.

Vote 1403 Digital Health and Information Management Program Note: “2022-23 Spending” is unaudited spending based on the FAO’s analysis of transactions recorded in the Province’s Integrated Financial Information System (IFIS) as of April 25, 2023. All figures are unaudited, as final audited figures are not available until the release of the Public Accounts of Ontario, approximately six months after the end of the fiscal year. Source: FAO analysis of information provided by Treasury Board Secretariat and the 2023-24 Expenditure Estimates.
Item Digital Health and Information Management Program (Vote 1403) 2022-23 Spending ($ millions) 2023-24 Estimates ($ millions) 1-Year Change ($ millions) 1-Year Growth (%)
1 Digital Health and Information Management
Digital Health Strategy and Programs 98 149 52 52.9
Health System Information Management 25 8 -16 -65.9
Salaries, Wages and Employee Benefits 20 20 <-1 -0.5
Services 9 11 2 20.1
Other Spending <1 1 <1 247.9
Total Supply Vote 152 189 37 24.6

Vote 1405 – Ontario Health Insurance Program

The Ontario Health Insurance Program includes three sub-programs (items): Ontario Health Insurance ($18.8 billion), Drug Programs ($5.7 billion) and the Assistive Devices Program ($0.6 billion).

In total, the Vote 1405 spending request is up $0.9 billion, or 3.8 per cent, from 2022-23 spending. Significant changes include these increases:

Vote 1405 Ontario Health Insurance Program Note: “2022-23 Spending” is unaudited spending based on the FAO’s analysis of transactions recorded in the Province’s Integrated Financial Information System (IFIS) as of April 25, 2023. All figures are unaudited, as final audited figures are not available until the release of the Public Accounts of Ontario, approximately six months after the end of the fiscal year. Source: FAO analysis of information provided by Treasury Board Secretariat and the 2023-24 Expenditure Estimates.
Item Ontario Health Insurance Program (Vote 1405) 2022-23 Spending ($ millions) 2023-24 Estimates ($ millions) 1-Year Change ($ millions) 1-Year Growth (%)
1 Ontario Health Insurance
Payments made for services and for care provided by physicians and practitioners 17,586 18,201 615 3.5
Independent Health Facilities 59 121 62 106.2
Underserviced Area Plan 31 31 -1 -1.7
Northern Travel Program 45 48 3 7.2
Quality Management Program Laboratory Services 6 5 -1 -16.5
Midwifery Services 200 204 5 2.5
Disease Prevention Strategy 5 3 -2 -45.6
Quality Health Initiatives 43 59 16 38.2
Salaries, Wages and Employee Benefits 54 53 <-1 -0.8
Services 25 23 -2 -7.1
Other Spending 2 4 2 100.7
Total Item 18,054 18,752 697 3.9
2 Drug Programs
Ontario Drug Programs 5,543 5,720 177 3.2
Salaries, Wages and Employee Benefits 14 13 -1 -7.2
Services 9 13 4 45.3
Other Spending <1 1 <1 96.6
Total Item 5,566 5,747 181 3.2
4 Assistive Devices Program
Assistive Devices and Supplies Program 527 570 43 8.2
Salaries, Wages and Employee Benefits 3 4 1 17.6
Services 2 1 -1 -38.8
Other Spending <1 1 <1 139.4
Total Item 531 575 44 8.2
Total Supply Vote 24,152 25,074 922 3.8

Vote 1406 – Population and Public Health Program

The Population and Public Health Program includes seven transfer payments under one item to support various health initiatives and programs. For 2023-24, the largest transfer payment is $0.9 billion for Official Local Health Agencies (largely for Public Health Units), which is $129 million, or 12.1 per cent, lower than last year’s spending. The second largest transfer payment is $0.4 billion for Outbreaks of Diseases, which is $155 million, or 53.7 per cent, higher than last year’s spending, reflecting funding for the COVID-19 vaccine program that was previously spent under the COVID-19 Response program.

Overall, the spending request for Vote 1406 is $778 million, or 31.0 per cent, lower than 2022-23 spending, largely due to the end of the COVID-19 Response program. In 2022-23, spending on the COVID-19 Response program was $741 million, while there is no planned spending for 2023-24.

Vote 1406 Population and Public Health Program Note: “2022-23 Spending” is unaudited spending based on the FAO’s analysis of transactions recorded in the Province’s Integrated Financial Information System (IFIS) as of April 25, 2023. All figures are unaudited, as final audited figures are not available until the release of the Public Accounts of Ontario, approximately six months after the end of the fiscal year. Source: FAO analysis of information provided by Treasury Board Secretariat and the 2023-24 Expenditure Estimates.
Item Population and Public Health Program (Vote 1406) 2022-23 Spending ($ millions) 2023-24 Estimates ($ millions) 1-Year Change ($ millions) 1-Year Growth (%)
4 Population and Public Health
Official Local Health Agencies 1,069 939 -129 -12.1
Outbreaks of Diseases 289 445 155 53.7
Tuberculosis Prevention 10 9 -1 -12.9
Sexually Transmitted Disease Control 2 2 0 29.5
Ontario Agency for Health Protection and Promotion 209 207 -2 -1.2
Prevent Disease, Injury and Addiction 55 64 9 17.0
Smoke-Free Ontario 13 19 5 41.3
COVID-19 Response 741 0 -741
Salaries, Wages and Employee Benefits 26 19 -7 -28.5
Services 93 26 -67 -71.9
Other Spending 3 2 -1 -35.4
Total Supply Vote 2,510 1,732 -778 -31.0

Vote 1407 – Health Capital Program

The Health Capital Program provides capital funding to health care facilities, including public hospitals, integrated health facilities and community sector health service providers. This program vote includes seven transfer payments, the largest of which is $2.0 billion for Major Hospital Projects.

Overall, the spending request for Vote 1407 is $1.0 billion, or 78.2 per cent, higher than 2022-23 spending. The spending request for Major Hospital Projects is $1.1 billion, or 116.0 per cent, higher than 2022-23 spending. This request is partially offset by reduced funding for Small Hospital Projects, which is down $39 million, or 49.3 per cent, as well as reduced funding for Community Health Programs, which is down $35 million, or 33.9 per cent.

Vote 1407 Health Capital Program Note: “2022-23 Spending” is unaudited spending based on the FAO’s analysis of transactions recorded in the Province’s Integrated Financial Information System (IFIS) as of April 25, 2023. All figures are unaudited, as final audited figures are not available until the release of the Public Accounts of Ontario, approximately six months after the end of the fiscal year. Source: FAO analysis of information provided by Treasury Board Secretariat and the 2023-24 Expenditure Estimates.
Item Health Capital Program (Vote 1407) 2022-23 Spending ($ millions) 2023-24 Estimates ($ millions) 1-Year Change ($ millions) 1-Year Growth (%)
1 Health Capital
Major Hospital Projects 910 1,965 1,055 116.0
Health Infrastructure Renewal Fund 181 200 19 10.4
Small Hospital Projects 79 40 -39 -49.3
Medical and Diagnostic Equipment Fund 35 41 6 17.7
Community Health Programs 103 68 -35 -33.9
Public Health Laboratories 4 5 1 15.4
Integrated Health Facility Programs 2 20 18 1,129.6
Other Spending 1 2 2 190.5
Total Supply Vote 1,314 2,341 1,027 78.2

Vote 1412 – Provincial Programs and Stewardship

The Provincial Programs and Stewardship program includes three sub-programs (items): Provincial Programs ($1.5 billion), Emergency Health Services ($1.3 billion) and Stewardship (less than $0.1 billion). Provincial Programs includes four transfer payments that support various initiatives, the largest of which is $721 million for Canadian Blood Services. Emergency Health Services includes three transfer payments that support ambulance services. Stewardship does not include any transfer payments.

Overall, the spending request for Vote 1412 is $94 million, or 3.4 per cent, higher than 2022-23 spending, largely due to higher planned spending for Canadian Blood Services (up $63 million, 9.5 per cent), Community and Priority Services (up $39 million, 6.2 per cent) and Air Ambulance (up $30 million, 12.8 per cent), offset by lower planned spending for Payments for Ambulance and related Emergency Services: Municipal Ambulance (down $21 million, 2.2 per cent).

Vote 1412 Provincial Programs and Stewardship Note: “2022-23 Spending” is unaudited spending based on the FAO’s analysis of transactions recorded in the Province’s Integrated Financial Information System (IFIS) as of April 25, 2023. All figures are unaudited, as final audited figures are not available until the release of the Public Accounts of Ontario, approximately six months after the end of the fiscal year. Source: FAO analysis of information provided by Treasury Board Secretariat and the 2023-24 Expenditure Estimates.
Item Provincial Programs and Stewardship (Vote 1412) 2022-23 Spending ($ millions) 2023-24 Estimates ($ millions) 1-Year Change ($ millions) 1-Year Growth (%)
1 Provincial Programs
Operation of Related Facilities 21 20 -5.2
Canadian Blood Services 658 721 63 9.5
HIV/AIDS and Hepatitis C Programs 107 105 -2 -1.8
Community and Priority Services 620 658 39 6.2
Healthy Homes Renovation Tax Credit <1 0 <-1 -100.0
Total Item 1,405 1,503 98 7.0
2 Emergency Health Services
Payments for Ambulance and related Emergency Services: Municipal Ambulance 932 912 -21 -2.2
Payments for Ambulance and related Emergency Services: Other Ambulance Operations and Related Emergency Services 82 78 -4 -4.6
Air Ambulance 232 262 30 12.8
Salaries, Wages and Employee Benefits 68 57 -10 -15.2
Services 10 10 <1 2.2
Other Spending 4 3 -1 -13.7
Total Item 1,328 1,323 -5 -0.4
4 Stewardship
Salaries, Wages and Employee Benefits 40 38 -2 -4.4
Services 6 7 <1 2.7
Other Spending <1 3 3 1,283.3
Total Item 47 48 1 2.0
Total Supply Vote 2,780 2,874 94 3.4

Vote 1413 – Information Systems

The Information Systems program provides digital services to support MOH and MLTC programs. This program vote contains no transfer payments.

Overall, the spending request for Vote 1413 is $24 million, or 9.7 per cent, lower than 2022-23 spending.

Vote 1413 Information Systems Note: “2022-23 Spending” is unaudited spending based on the FAO’s analysis of transactions recorded in the Province’s Integrated Financial Information System (IFIS) as of April 25, 2023. All figures are unaudited, as final audited figures are not available until the release of the Public Accounts of Ontario, approximately six months after the end of the fiscal year. Source: FAO analysis of information provided by Treasury Board Secretariat and the 2023-24 Expenditure Estimates.
Item Information Systems (Vote 1413) 2022-23 Spending ($ millions) 2023-24 Estimates ($ millions) 1-Year Change ($ millions) 1-Year Growth (%)
1 Information Technology Services Health Cluster
Salaries, Wages and Employee Benefits 54 60 6 10.6
Services 187 157 -31 -16.4
Other Spending 4 5 1 24.5
Total Supply Vote 246 222 -24 -9.7

Vote 1416 – Health Services and Programs

Health Services and Programs includes three sub-programs (items): Health Services ($31.6 billion), Programs and Administration ($3.0 billion) and Digital Health Capital (less than $0.1 billion). The Health Services item includes three sub-items: Hospitals ($23.8 billion), which consists mostly of a transfer payment to fund hospital operations; Community ($5.8 billion), which includes five transfer payments that support home and community care programs; and Mental Health and Addictions ($2.0 billion).

Overall, the spending request for Vote 1416 is up $0.5 billion, or 1.4 per cent, from 2022-23 spending. The following transfer payments from Vote 1416 have the largest planned spending increases in 2023-24 compared to 2022-23:

The following transfer payments from Vote 1416 have the largest planned spending decreases in 2023-24 compared to 2022-23:

Vote 1416 Health Services and Programs Note: “2022-23 Spending” is unaudited spending based on the FAO’s analysis of transactions recorded in the Province’s Integrated Financial Information System (IFIS) as of April 25, 2023. All figures are unaudited, as final audited figures are not available until the release of the Public Accounts of Ontario, approximately six months after the end of the fiscal year. Source: FAO analysis of information provided by Treasury Board Secretariat and the 2023-24 Expenditure Estimates.
Item Health Services and Programs (Vote 1416) 2022-23 Spending ($millions) 2023-24 Estimates ($ millions) 1 Year Change ($ millions) 1-Year Growth (%)
1 Health Services
Sub-Item: Hospitals
Operation of Hospitals 22,831 23,010 180 0.8
Grants to Compensate for Municipal Taxation – Hospitals 4 4 <1 4.7
Specialty Psychiatric Hospitals 811 759 -52 -6.4
Grants to Compensate for Municipal Taxation – Specialty Psychiatric Hospitals <1 <1 <1 31.4
Sub-Item: Community
Home Care 3,594 4,112 518 14.4
Community Support Services 804 805 1 0.1
Assistive Living Services in Supportive Housing 421 355 -65 -15.6
Community Health Centres 525 488 -37 -7.0
Acquired Brain Injury 73 66 -7 -10.0
Sub-Item: Mental Health and Addictions
Community Mental Health 1,055 1,219 164 15.6
Addiction Program 337 346 9 2.7
Child and Youth Mental Health 491 485 -6 -1.2
Total Item 30,944 31,649 705 2.3
2 Programs and Administration
Digital Health 449 366 -83 -18.4
Health Quality Programs 33 32 -1 -3.4
Regional Coordination Operations Support 290 226 -65 -22.3
Cancer Treatment and Renal Services 2,284 0 -2,284
Cancer Treatment Services 0 1,499 1,499
Renal Services 0 727 727
Organ and Tissue Donation and Transplantation Services 67 75 8 11.2
Cancer Screening Programs 82 91 9 11.1
Health Workforce Programs 15 6 -9 -61.2
Total Item 3,220 3,022 -198 -6.1
3 Digital Health Capital
Digital Health Capital 28 5 -23 -81.7
Total Item 28 5 -23 -81.7
Total Supply Vote 34,192 34,676 484 1.4

Standalone Legislation (Statutory) Spending (MOH and MLTC)

In 2023-24, planned spending by standalone legislation (i.e., spending authorized by legislation other than the Supply Bill) primarily consists of personal protective equipment (PPE) expenses ($292 million under Supplies and Equipment for planned disbursements and $105 million for Inventory Write-offs), as well as $17 million for amortization expenses. As the PPE expenses were not recorded last year,[24] overall standalone legislation spending is expected to be $413 million higher in 2023-24 compared to 2022-23.

Standalone Legislation (Statutory) Spending Note: “2022-23 Spending” is unaudited spending based on the FAO’s analysis of transactions recorded in the Province’s Integrated Financial Information System (IFIS) as of April 25, 2023. All figures are unaudited, as final audited figures are not available until the release of the Public Accounts of Ontario, approximately six months after the end of the fiscal year. Includes $16,667 and $314,014 in Ministry of Long-Term Care statutory spending in 2022-23 and 2023-24, respectively. Source: FAO analysis of information provided by Treasury Board Secretariat and the 2023-24 Expenditure Estimates.
Standalone Legislation (Statutory) Spending 2022-23 Spending ($ millions) 2023-24 Estimates ($ millions) 1-Year Change ($ millions) 1-Year Growth (%)
Amortization 16 17 1 3.9
Bad Debt Expense <1 <1 <1 134.3
Inventory Write-off 0 105 105
Salaries <1 <1 <1 41.6
Supplies and Equipment -15 292 307
Total Statutory Spending 1 414 413

Other Spending

The financial results of organizations controlled by the Province, including hospitals and certain provincial agencies, are consolidated into the financial results of the Province. Adjustments are made through ‘other spending’ to account for spending by hospitals and agencies from sources other than transfer payments from the Province. Net capital adjustments are also made to reflect amortization expense, largely for hospital infrastructure.

Other spending (operating) is projected to increase by $693 million, or 8.1 per cent, versus 2022-23 interim spending, largely due to a planned $638 million (14.5 per cent) increase for Ontario Health. The increase in planned spending for Ontario Health is largely due to higher payments to long-term care home operators made by the Ministry of Long-Term Care that are recorded on the financial statements of Ontario Health and consolidated by the Ministry of Health.

Other spending (capital) is projected to decrease by $946 million, or 109.8 per cent, compared to 2022-23 interim spending, largely because of a decrease in the hospitals capital consolidation adjustment.

Other Spending Note: “2022-23 Interim Spending” for Hospitals operating and capital are FAO estimates, the remaining values are from the 2023 Ontario Budget. Source: FAO analysis of information provided by Treasury Board Secretariat, the 2023 Ontario Budget and the 2023-24 Expenditure Estimates.
Other Spending 2022-23 Interim Spending ($ millions) 2023-24 Estimates ($ millions) 1-Year Change ($ millions) 1-Year Growth (%)
Operating
Hospitals 4,234 4,279 45 1.1
Home and Community Care Support Services 18 18 <1 0.8
ORNGE -19 -22 -3 -14.2
Funding to Colleges -14 -7 7 48.9
Ontario Agency for Health Protection and Promotion -28 -23 5 19.4
Ontario Health 4,385 5,023 638 14.5
General Real Estate Portfolio -8 -7 1 15.7
Children Aid Societies -23 -23 0 0.0
Total Operating 8,544 9,238 693 8.1
Capital
Hospitals 825 -116 -941 -114.1
Home and Community Care Support Services 2 2 <-1 -21.7
ORNGE 14 18 4 29.0
Ontario Agency for Health Protection and Promotion 12 8 -5 -39.0
Ontario Health 9 6 -3 -31.1
General Real Estate Portfolio -1 -1 <-1 -23.3
Total Capital 861 -85 -946 -109.8
Total Other Spending 9,406 9,153 -252 -2.7

Ministry of Long-Term Care

Vote 4501 – Ministry Administration Program

The Ministry Administration Program supports the delivery of all programs and services offered by MLTC. Vote 4501 includes only one sub-program (item), Ministry Administration, with spending largely for salaries, wages and employee benefits. Vote 4501 does not include any transfer payment programs. The overall spending request is up less than $0.1 million, or 1.2 per cent, from 2022-23 spending.

Vote 4501 Ministry Administration Program Note: “2022-23 Spending” is unaudited spending based on the FAO’s analysis of transactions recorded in the Province’s Integrated Financial Information System (IFIS) as of April 25, 2023. All figures are unaudited, as final audited figures are not available until the release of the Public Accounts of Ontario, approximately six months after the end of the fiscal year. Source: FAO analysis of information provided by Treasury Board Secretariat and the 2023-24 Expenditure Estimates.
Item Ministry Administration Program (Vote 4501) 2022-23 Spending ($ millions) 2023-24 Estimates ($ millions) 1-Year Change ($ millions) 1-Year Growth (%)
1 Ministry Administration
Salaries, Wages and Employee Benefits 6 6 <-1 -5.9
Services 1 1 <1 64.7
Other Spending 0 0 <1 72.3
Total Supply Vote 7 7 <1 1.2

Vote 4502 – Long-Term Care Homes Program

The Long-Term Care Homes Program includes two sub-programs (items): Long-Term Care Homes Program (operating, $8.3 billion) and Long-Term Care Program (capital, less than $0.1 billion). Overall, the spending request for Vote 4502 is up $1.1 billion, or 15.2 per cent, from 2022-23 spending. This reflects the Province’s commitments to build new and redevelop existing long-term care beds, and increase direct care hours provided to long-term care residents.

Vote 4502 Long-Term Care Homes Program Note: “2022-23 Spending” is unaudited spending based on the FAO’s analysis of transactions recorded in the Province’s Integrated Financial Information System (IFIS) as of April 25, 2023. All figures are unaudited, as final audited figures are not available until the release of the Public Accounts of Ontario, approximately six months after the end of the fiscal year. Source: FAO analysis of information provided by Treasury Board Secretariat and the 2023-24 Expenditure Estimates.
Item Long-Term Care Homes Program (Vote 4502) 2022-23 Spending ($ millions) 2023-24 Estimates ($ millions) 1-Year Change ($ millions) 1-Year Growth (%)
1 Long-Term Care Homes Program (Operating)
Long-Term Cares Homes - Development 0 773 773
Long-Term Care Homes - Operations 7,146 7,438 293 4.1
Salaries, Wages and Employee Benefits 54 65 11 20.8
Services 18 12 -6 -33.5
Other Spending 2 3 1 80.1
Total Item 7,220 8,292 1,073 14.9
2 Long-Term Care Program (Capital)
Long-Term Care Homes Capital 52 84 32 62.4
Total Item 52 84 32 62.4
Total Supply Vote 7,271 8,376 1,105 15.2

Other Spending

The financial results of organizations controlled by the Province, including hospitals and certain provincial agencies, are consolidated into the financial results of the Province. In the case of the Ministry of Long-Term Care, a significant portion of the ministry’s spending is recorded as expenses on the financial statements of Ontario Health and with hospitals. Accordingly, negative adjustments are recorded as ‘other spending’ with MLTC and corresponding positive adjustments are recorded as ‘other spending’ with the Ministry of Health.

For 2023-24, the ministry plans to make a $5.0 billion negative ‘other spending’ adjustment to account for planned payments to long-term care home operators that will be recorded as expenses on the financial statements of Ontario Health. This negative adjustment is $633 million larger compared to 2022-23.

The ministry also plans to make negative ‘other spending’ adjustments to reflect planned payments made by the ministry that will be recorded as spending in the hospitals program area. For 2023-24, there are planned negative adjustments of $162 million for hospitals operating and $84 million for hospitals capital.

Other Spending Note: “2022-23 Interim Spending” is from the 2023 Ontario Budget. Source: FAO analysis of information provided by Treasury Board Secretariat, the 2023 Ontario Budget and the 2023-24 Expenditure Estimates.
Other Spending 2022-23 Interim Spending ($ millions) 2023-24 Estimates ($ millions) 1-Year Change ($ millions) 1-Year Growth (%)
Operating
Ontario Health -4,355 -4,988 -633 -14.5
Hospitals -137 -162 -25 -18.3
Total Operating -4,492 -5,150 -658 -14.7
Capital
Hospitals -52 -84 -32 -62.4
Total Capital -52 -84 -32 -62.4
Total Other Spending -4,544 -5,234 -690 -15.2

Graphical Descriptions

Figure 1 Health sector spending projections, FAO vs. 2023 Ontario Budget, $ billions Source: Public Accounts of Ontario, 2023 Ontario Budget, and FAO analysis of information provided by the Province. Return to image
Actuals Interim Forecast
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26
FAO Projection 78.5 80.6 82.4 86.7
2023 Budget Allocation 79.8 81.0 84.2 87.6
Historical 63.7 69.5 75.7
Figure 2 Federal health transfers to Ontario, 2022-23, $ millions Note: “Home Care and Mental Health” is the Home and Community Care and Mental Health and Addictions Services Funding Agreement. Source: Public Accounts of Ontario, 2023 Ontario Budget, and FAO analysis of information provided by the Province and Government of Canada. Return to image
Federal Health Transfer Federal Health Transfer ($ millions) Share of Total Transfers (%)
Canada Health Transfer 17,561 91
One-Time CHT Top-Up 776 4
Home Care and Mental Health 465 3
Other 435 2
Figure 3 FAO projected federal health transfers, previous arrangements vs. new agreements, $ billions Source: 2019-20 and 2021-22 Public Accounts of Ontario and FAO. Return to image
Actuals Interim Forecast
2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28
Old Federal Health Transfer Projection 19.2 20.2 21.4 22.0 22.5 22.8
New Federal Health Transfer Projection 19.2 22.1 22.4 23.4 24.1 24.8
Historical 16.6 23.1 20.2
Figure 4 FAO projected federal health transfers as a proportion of Ontario health sector spending, per cent Source: Public Accounts of Ontario, 2023 Ontario Budget, FAO analysis of information provided by the Province, and publicly available Government of Canada information. Return to image
Fiscal Year Federal Health Transfers Share of Total Health Spending (%)
Historical 2012-13 22.2
2013-14 22.7
2014-15 22.8
2015-16 24.2
2016-17 25.2
2017-18 24.7
2018-19 25.2
2019-20 26.1
2020-21 33.3
2021-22 25.1
2022-23 24.5
Projection 2023-24 27.4
2024-25 27.1
2025-26 27.0
2026-27 26.6
2027-28 26.1

Footnotes

[1] See Ontario Health Sector: Spending Plan Review, which identified a funding shortfall of $21.3 billion over the 2022-23 to 2027-28 period. From 2022-23 to 2025-26, the shortfall identified by the FAO was $10.0 billion.

[2] See Chapter 4 and FAO, Ontario Health Sector: Spending Plan Review for more information on the Province’s commitments.

[3] Over the three-year period from 2023-24 to 2025-26, the FAO estimates that the increase in federal health transfers to the Province is $4.1 billion.

[4] 2022-23 unaudited spending is based on the FAO’s analysis of transactions recorded in the Province’s Integrated Financial Information System (IFIS) as of April 25, 2023. All figures are unaudited, as final audited figures are not available until the release of the Public Accounts of Ontario, approximately six months after the end of the fiscal year.

[5] See Ontario Health Sector: Spending Plan Review, which identified a funding shortfall of $21.3 billion over the 2022-23 to 2027-28 period. From 2022-23 to 2025-26, the shortfall identified by the FAO was $10.0 billion.

[6] A reduction of $0.1 billion also occurred in 2022-23.

[7] See Chapter 4 for more information.

[8] Ontario News Release, “Ontario Reducing Wait Times for Surgeries and Procedures,” January 16, 2023.

[9] Ontario News Release, “Ontario Expanding Safe Use of Biosimilars,” December 20, 2022.

[10] See, Ontario Health Sector: Spending Plan Review.

[11] See FAO, Ontario Health Sector: Spending Plan Review for more detailed analysis of the Province’s health sector capacity investments.

[12] For more information on the health sector spending program areas and the FAO’s forecasting methodology, see FAO, Ontario Health Sector: Spending Plan Review.

[13] See FAO, Ontario Health Sector: Spending Plan Review for more detailed analysis of the Province’s hospital capacity.

[14] This average annual spending growth is higher than the 8.3 per cent projected by the FAO in March 2023, primarily reflecting an updated estimate for the number of LTC beds expected to be completed by 2027-28. However, the FAO is projecting lower total LTC spending from 2022-23 to 2025-26, compared to the March 2023 projection, due to new FAO estimates for the timing of development grants paid to LTC homes under the Province’s construction funding policy.

[15] Ontario Backgrounder, “Ontario on Track to Build 30,000 New Long-Term Care Beds,” April 21, 2022 and Ontario News Release, “Ontario Connecting Long-Term Care Residents to More Hours of Direct Care,” March 17, 2023.

[16] See FAO, Ontario Health Sector: Spending Plan Review for detailed analysis of the shortage of health sector workers in Ontario.

[17] These wage increases are in addition to the one per cent increases previously awarded for 2020, 2021 and 2022, as mandated by Bill 124. See Ontario Hospital Association v Ontario Nurses’ Association, 2023 CanLII 29345; Participating Hospitals v Ontario Nurses Association, 2023 CanLII 33967; and Ontario Nurses' Association Media Release, “Bill 124 Reopener Decisions Not Nearly Enough to Retain, Recruit Nurses and Health-Care Professionals in Ontario,” April 28, 2023.

[18] The estimated cost is $1.3 billion to 2027-28.

[19] Over the three-year period from 2023-24 to 2025-26, the FAO estimates that the increase in federal health transfers to the Province is $4.1 billion.

[20] FAO estimate, based on Ontario’s population share. As of the writing of this report, final agreement amounts have not been publicly announced.

[21] 2021 Ontario Budget, p. 58.

[22] ‘Services’ includes information services, such as, advertising and communication services provided by professional agencies and advertising placed directly with the media; rental and purchased repair and maintenance of machinery, equipment, buildings, land and engineering structures; data processing services; insurance premiums; and other professional and special services.

[23] Ministry of Health and Long-Term Care, “Schedule of Benefits for Physician Services,” June 2015.

[24] 2022-23 spending may be adjusted as part of the 2022-23 Public Accounts of Ontario.