2022-23 Interprovincial Budget Comparison

2022-23 Interprovincial Budget Comparison

Publish date: April 10, 2024 ISBN 978-1-4868-7964-9
This report provides a comparison of Ontario government revenues, spending, budget balance and net debt with other Canadian provinces.
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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.

Prepared by: Yefei Zhang (Economist) and Nicolas Rhodes (Principal, Economics and Fiscal Analysis) under the direction of Paul Lewis (Chief Economist).

© King’s Printer for Ontario, 2024

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2022-23 Interprovincial Budget Comparison, Financial Accountability Office of Ontario, 2024.
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Comparing Ontario’s Revenues, Spending, Budget Balance and Net Debt with Other Provinces


Highlights

This report provides a comparison of Ontario government revenues, spending, budget balance and net debt with the other Canadian provinces based on Statistics Canada’s Government Finance Statistics (GFS). Financial information is reviewed for the 2022-23 fiscal year and is referred to as 2022 throughout the report.

Ontario’s total revenue per capita was the lowest in Canada

Ontario’s total spending per capita was the lowest in Canada

Ontario was one of five provinces to record a deficit in 2022

Ontario’s debt burden per capita was the highest in Canada

Introduction and Background

This report provides a comparison of Ontario government revenues, spending, budget balance and net debt with the other Canadian provinces based on Statistics Canada’s Government Finance Statistics (GFS). The GFS data, published since 2008,[1] adjust for differences in each province’s organizational structure and accounting practices, providing a standardized framework for comparing provincial budgetary results.[2]

This report reviews financial information for the 2022-23 fiscal year, which is referred to as 2022 throughout the report. The report provides interprovincial comparisons for:

Methodology

This report uses data from the provincial and territorial governments GFS Tables 10-10-0017-01 and 10-10-0024-01. Adjustments to include school boards' property tax revenue and tuition fees generated by colleges and school boards were also made to better align with how Ontario presents its financial statements. To ensure comparability among provinces, the same adjustments were made to all provinces.

Data are presented primarily on a per capita basis to account for the impact of the size of each province’s population on financial results. Appendix A provides per capita results shown throughout this report as well as financial results as a share of economic activity.

For comparison purposes, Appendix B presents the provincial financial results from Appendix A combined with the financial results of municipal and local governments, health and social service institutions, school boards, colleges and universities. On this basis, Ontario’s relative financial performance compared to other provinces is broadly similar to its provincial performance presented throughout this report.

Revenues

Canadian provinces receive revenue from taxation, federal transfers and other non-tax sources. In 2022, Ontario generated $12,643 in total revenue per person, the lowest amount among the provinces and $4,034 (24.2 per cent) below the average for the rest of Canada ($16,676). Ontario’s low revenue per capita relative to other provinces reflects Ontario’s below-average federal transfers and other non-tax revenues. Since 2008, Ontario’s total revenue per capita has consistently ranked lowest or second lowest among the provinces.

Figure 1 Ontario’s revenue per capita was the lowest in Canada in 2022

Sources: Statistics Canada Tables 10-10-0017-01, 17-10-0005-01, 10-10-0019-01 and FAO

Tax revenues

Ontario received $9,687 in tax revenue per capita in 2022, modestly below the rest of Canada average of $9,779. Saskatchewan collected the highest tax revenue per capita ($12,197), while Alberta collected the lowest ($6,891). Ontario has historically had relatively higher tax revenue per capita compared to the rest of Canada average, however, slow tax revenue per capita growth in Ontario in 2022 (+1.5 per cent) compared to the rest of Canada (+13.7 per cent) brought Ontario below the rest of Canada average.[3]

Figure 2 Ontario’s tax revenue per capita was below the average of other provinces in 2022

Sources: Statistics Canada Tables 10-10-0017-01, 17-10-0005-01, 10-10-0019-01 and FAO

When measured against the province’s economic output, Ontario’s tax revenues represented 14.0 per cent of Gross Domestic Product (GDP) in 2022, below the 14.5 per cent average among the other provinces. On this basis, Ontario’s tax revenues were 5.0 percentage points below Quebec (the highest ranked province at 19.0 per cent of GDP) and 7.2 percentage points above Alberta (the lowest ranked province at 6.8 per cent of GDP).

Figure 3 Ontario’s tax revenue as a share of GDP was below the average of other provinces in 2022

Sources: Statistics Canada Tables 10-10-0017-01, 36-10-0222-01, 10-10-0019-01 and FAO

Dividing tax revenue categories by their corresponding economic bases provides an indication of the amount of tax revenue collected relative to economic activity. The economic bases of personal income tax, corporations tax and sales tax revenues are labour income, corporate profits and household spending, respectively.[4] While these economic bases are not complete measures of the actual tax base, they can be used as proxies to evaluate each province on a common basis.[5]

Figure 4 Ontario’s tax revenue as a share of economic bases compared to the average of other provinces in 2022

Note: The economic bases of personal income tax, corporations tax and sales tax revenues are labour income (total compensation of employees), corporate profits (net operating surplus of corporations) and household spending (household final consumption expenditure), respectively. All other tax revenue is compared against overall economic activity as measured by GDP.

Sources: Statistics Canada Tables 10-10-0017-01, 36-10-0221-01, 36-10-0222-01, 10-10-0019-01 and FAO

Although these shares vary over time, since 2008 Ontario’s tax revenues as shares of their economic base for personal income tax and all other tax revenue have generally been below the average in the rest of Canada, while corporations tax and sales tax shares have generally been above the average in the rest of Canada.

Federal transfers and other non-tax revenues

Provincial governments receive transfers from the federal government through the Canada Health Transfer, Canada Social Transfer, the Equalization Program and other federal transfer programs, including those for infrastructure and labour market programs. In 2022, Ontario received $1,984 per capita in federal transfers, the lowest among the provinces and $1,927 (49.3 per cent) below the rest of Canada average ($3,911). Ontario’s lower federal transfers in 2022 reflect its lack of Equalization Program payments[7] and its below-average revenue from other federal transfer programs.[8]

Provinces also collect revenues from other non-tax sources,[9] such as resource royalties, service fees, fines and penalties, among others. Ontario collected the lowest amount of other non-tax revenues in the country ($971 per capita in Ontario versus the $2,987 average in the rest of Canada), largely reflecting its limited resource royalties[10] and lower revenues generated from the Province’s ownership of assets and from the sale of goods and services.[11]

Figure 5 Ontario had the lowest federal transfers and other non-tax revenues per capita in 2022

Sources: Statistics Canada Tables 10-10-0017-01, 17-10-0005-01, 10-10-0019-01 and FAO.

Spending

Canadian provinces’ spending includes expenditures on programs and interest on debt payments. In 2022, total spending per capita in Ontario was $13,065, the lowest among the provinces and $3,338 (20.4 per cent) lower than the rest of Canada average ($16,403). Ontario’s relatively low level of total spending reflects its low program spending per capita and below-average interest on debt payments. Since 2008, Ontario’s spending per capita has consistently ranked at or near the lowest among the provinces.

Figure 6 Ontario’s total spending per capita was the lowest in Canada in 2022

Sources: Statistics Canada Tables 10-10-0017-01, 17-10-0005-01, 10-10-0019-01 and FAO

Program spending

In 2022, program spending per capita in Ontario was $12,138, the lowest among the provinces and $3,251 (21.1 per cent) lower than the rest of Canada average ($15,389). Since 2008, Ontario’s program spending per capita has consistently ranked at or near the lowest among the provinces. Examining the causes of differences in rankings between provinces is beyond the scope of this report, but could reflect differences in economies of scale, the quality or quantity of services provided and the provinces’ different age structures, among other factors.

Figure 7 Ontario’s program spending per capita was the lowest in Canada in 2022

Sources: Statistics Canada Tables 10-10-0017-01,17-10-0005-01, 10-10-0019-01 and FAO

Ontario’s low level of program spending results from lower-than-average health and all other program spending, which outweighs above-average per capita spending on education.

Health

  • Health spending includes hospital and outpatient services, medical products and equipment, and public health services, among others.
  • Health spending per capita in Ontario was $4,889 in 2022, the lowest in Canada and $876 (15.2 per cent) below the average of the other provinces.
  • Since 2008, Ontario’s health spending per capita has consistently ranked at or near the lowest in Canada.

Figure 8 Health Spending

Sources: Statistics Canada Tables 10-10-0024-01, 17-10-0005-01 and FAO.

Education

  • Education spending includes primary, secondary and postsecondary expenses, among others.
  • Education spending in Ontario was $2,843 per capita in 2022, the fifth highest among the provinces and $71 (2.6 per cent) above the average of the other provinces.
  • Since 2010, Ontario has consistently had above-average education spending.

Figure 9 Education spending in 2022

Note: Education spending includes primary, secondary and postsecondary expenses, among others.

Sources: Statistics Canada Tables 10-10-0024-01, 17-10-0005-01, 10-10-0019-01 and FAO.

All other program spending

  • All other program spending includes expenses for police services, prisons, transportation, housing, old age, unemployment, sickness and disability, and children services, among others.
  • All other program spending per capita in Ontario was $4,406 in 2022, the lowest among the provinces and $2,446 (35.7 per cent) below the average in the rest of Canada.
  • Since 2008, Ontario has consistently spent the lowest or second lowest per capita on all other programs.

Figure 10 All other program spending in 2022

Note: All other program spending is calculated by subtracting health and education expenses from overall program expense.

Sources: Statistics Canada Tables 10-10-0024-01, 17-10-0005-01, 10-10-0019-01 and FAO.

Interest on debt payments

In 2022, interest on debt payments per capita in Ontario were $927, the fourth highest among the provinces. Over the last five years, Ontario’s interest on debt payments per capita have increased at an average annual rate of 1.6 per cent, in line with the increase in the rest of Canada average of 1.5 per cent. However, due to declines in the interest on debt payments per capita of some other provinces, Ontario’s ranking has changed from seventh highest in 2017[12] to its current ranking of fourth highest.

Although Ontario is the most highly indebted province, its interest on debt payments per capita of $927 were $88 (8.6 per cent) lower than the rest of Canada average ($1,014). The below-average interest on debt payments per capita reflect Ontario’s lower-than-average borrowing rates compared to the other provinces (see discussion below for more information on net debt and effective interest rates).

Figure 11 Ontario’s interest on debt payments per capita below the average of other provinces in 2022

Sources: Statistics Canada Tables 10-10-0017-01,17-10-0005-01 and FAO

Budget Balance

According to the GFS, Ontario recorded a budget deficit of $422 per person in 2022, the third largest deficit among the provinces. British Columbia, Quebec, Nova Scotia and Manitoba also had deficits, while the remaining provinces recorded surpluses.

Excluding Ontario, the average budget position of the other provinces was a $273 per capita surplus[13] in 2022, a difference of $695 from Ontario’s $422 per capita deficit. Since 2009, Ontario has generally had larger per capita deficits than the rest of Canada, except for the 2015 to 2017 period.[14]

Figure 12 Ontario’s budget position was below the average of other provinces in 2022

Sources: Statistics Canada Tables 10-10-0017-01,17-10-0005-01 and FAO

Net Debt

Ontario’s net debt per capita was $19,436 in 2022, the highest among the provinces and $9,997 (105.9 per cent) above the rest of Canada average ($9,439). Apart from 2008, Ontario has consistently had the highest or second highest net debt per capita. Ontario’s relatively high net debt levels compared to other provinces reflect its frequent budget deficits, which have typically been larger than the average budget deficit in the rest of Canada.

Figure 13 Ontario’s net debt per capita above the rest of Canada average in 2022

Sources: Statistics Canada Tables 10-10-0017-01,17-10-0005-01, 36-10-0222-01 and FAO

Despite Ontario's relatively higher debt levels, interest on debt payments are partially mitigated by the Province’s below-average borrowing rates. Ontario’s effective interest rate on debt[15] was 3.5 per cent in 2022, below the 4.0 per cent average effective interest rate of the other provinces.[16]

Figure 14 Ontario’s effective interest rate on debt was below the rest of Canada average in 2022

Sources: Statistics Canada Tables 10-10-0017-01 and FAO.

Appendix A – Provincial Government Finance Statistics

The tables in Appendix A reflect financial information published in the provincial GFS tables and presented throughout this report. Adjustments to include school boards' property tax revenue and tuition fees generated by colleges and school boards were also made to better align with how Ontario presents its financial statements. To ensure comparability among provinces, the same adjustments were made to all provinces.

Table A.1 Provincial financial results per capita ($, 2022) * Rest of Canada average includes all provinces except Ontario. ** Health and Education spending is calculated from Statistics Canada’s Table 10-10-0024-01 (Canadian classification of functions of government estimates) and then subtracted from total Program Spending to calculate All Other Program Spending. Note: Adjustments to include school boards’ property tax revenue and tuition fees generated by colleges and school boards were also made to better align with how Ontario presents its financial statements. To ensure comparability among provinces, the same adjustments were made to all provinces. Sources: Statistics Canada Tables 10-10-0017-01,17-10-0005-01, 10-10-0024-01, 10-10-0019-01 and FAO.
  NL PE NS NB QC ON MB SK AB BC Provincial Average Rest of Canada Average*
Budget Balance 179 335 -324 311 -430 -422 -200 1,026 2,208 -646 204 273
Net Debt 16,195 10,390 11,535 8,902 7,899 19,436 13,574 7,605 6,007 2,847 10,439 9,439
                         
Total Revenue 17,895 17,231 15,065 15,730 18,447 12,643 15,032 19,215 16,762 14,711 16,273 16,676
Taxes 11,050 9,313 8,937 8,711 11,965 9,687 8,784 12,197 6,891 10,163 9,770 9,779
Federal Transfers 3,475 6,669 4,772 5,290 3,216 1,984 4,537 2,998 2,159 2,083 3,718 3,911
Other Non-tax Revenue 3,371 1,249 1,356 1,728 3,266 971 1,711 4,020 7,712 2,465 2,785 2,987
                         
Total Spending 17,718 16,896 15,388 15,418 18,877 13,065 15,232 18,189 14,554 15,357 16,070 16,403
Program Spending 16,437 16,029 14,689 14,518 16,943 12,138 13,847 17,295 13,871 14,870 15,064 15,389
Health** 6,605 5,461 6,291 5,906 5,953 4,889 5,117 5,596 5,279 5,675 5,677 5,765
Education** 2,804 3,014 2,479 2,895 3,136 2,843 2,766 3,071 2,536 2,247 2,779 2,772
All Other Program Spending** 7,028 7,554 5,919 5,718 7,855 4,406 5,965 8,628 6,056 6,948 6,608 6,852
Interest on Debt Payments 1,281 867 699 900 1,934 927 1,385 894 683 487 1,006 1,014
Table A.2 Provincial financial results as a share of GDP (Per Cent, 2022) * Rest of Canada average includes all provinces except Ontario. ** Health and Education spending is calculated from Statistics Canada’s Table 10-10-0024-01 (Canadian classification of functions of government estimates) and then subtracted from total Program Spending to calculate All Other Program Spending. Note: Adjustments to include school boards’ property tax revenue and tuition fees generated by colleges and school boards were also made to better align with how Ontario presents its financial statements. To ensure comparability among provinces, the same adjustments were made to all provinces. Sources: Statistics Canada Tables 10-10-0017-01, 10-10-0024-01, 36-10-0222-01, 10-10-0019-01 and FAO.
  NL PE NS NB QC ON MB SK AB BC Provincial Average Rest of Canada Average*
Budget Balance 0.2 0.6 -0.6 0.6 -0.7 -0.6 -0.3 1.1 2.2 -0.9 0.2 0.2
Net Debt 21.1 18.5 21.8 16.2 12.6 28.1 22.2 7.8 5.9 3.9 15.8 14.4
                         
Total Revenue 23.4 30.7 28.4 28.6 29.3 18.3 24.6 19.8 16.5 19.9 23.9 24.6
Taxes 14.4 16.6 16.9 15.8 19.0 14.0 14.3 12.6 6.8 13.8 14.4 14.5
Federal Transfers 4.5 11.9 9.0 9.6 5.1 2.9 7.4 3.1 2.1 2.8 5.8 6.2
Other Non-tax Revenue 4.4 2.2 2.6 3.1 5.2 1.4 2.8 4.1 7.6 3.3 3.7 3.9
                         
Total Spending 23.1 30.1 29.0 28.0 30.0 18.9 24.9 18.7 14.3 20.8 23.8 24.3
Program Spending 21.5 28.6 27.7 26.4 26.9 17.5 22.6 17.8 13.6 20.2 22.3 22.8
Health** 8.6 9.7 11.9 10.7 9.5 7.1 8.4 5.8 5.2 7.7 8.4 8.6
Education** 3.7 5.4 4.7 5.3 5.0 4.1 4.5 3.2 2.5 3.0 4.1 4.1
All Other Program Spending** 9.2 13.5 11.2 10.4 12.5 6.4 9.7 8.9 5.9 9.4 9.7 10.1
Interest on Debt Payments 1.7 1.5 1.3 1.6 3.1 1.3 2.3 0.9 0.7 0.7 1.5 1.5
Table A.3 Provincial tax revenue as a share of economic base (Per Cent, 2022) * Rest of Canada average includes all provinces except Ontario. Note: Economic bases of personal income tax, corporations tax and sales tax are labour income (total compensation of employees), corporate profits (net operating surplus of corporations) and household spending (household final consumption expenditure), respectively. While these economic bases are not complete measures of the actual tax base upon which tax revenues are generated, they can be used as proxies to evaluate each province on a common basis. As there are many different bases for all other tax revenue, this category is compared against overall economic activity measured by GDP. Sources: Statistics Canada Tables 10-10-0017-01, 36-10-0221-01, 36-10-0222-01, 10-10-0019-01 and FAO.
  NL PE NS NB QC ON MB SK AB BC Provincial Average Rest of Canada Average*
Personal Income Tax 11.8 12.2 14.2 10.4 14.4 8.7 10.6 8.8 7.7 9.2 10.8 11.0
Corporations Tax 14.4 13.5 31.6 19.6 18.4 20.2 11.3 10.7 6.2 19.2 16.5 16.1
Sales Tax 7.9 7.6 7.0 6.6 7.7 6.6 5.3 6.5 0.0 4.3 5.9 5.9
All Other Taxes 2.9 4.4 2.6 4.0 4.6 3.3 4.7 3.8 1.9 4.3 3.7 3.7

Appendix B – Combined Provincial and Municipal Government Finance Statistics

The tables in Appendix B present the provincial financial results in Appendix A combined with the financial results of municipal and local governments, health and social service institutions, school boards, colleges and universities, among others.

Table B.1 Combined provincial and municipal financial results per capita ($, 2022) * Rest of Canada average includes all provinces except Ontario. ** Health and Education spending is calculated from Statistics Canada’s Table 10-10-0005-01 (Canadian classification of functions of government estimates) and then subtracted from Program Spending to calculate All Other Program Spending. Sources: Statistics Canada Tables 10-10-0147-01, 17-10-0005-01, 10-10-0005-01 and FAO.
  NL PE NS NB QC ON MB SK AB BC Provincial Average Rest of Canada Average*
Budget Balance -105 1,232 672 -363 -235 -115 -723 1,133 1,702 1,025 422 482
Net Debt 17,664 10,539 9,255 8,472 15,674 17,961 15,197 5,802 5,373 -1,144 10,479 9,648
                         
Total Revenue 20,509 19,212 18,790 18,022 21,022 17,045 17,868 22,959 20,625 19,144 19,520 19,794
Taxes 12,023 9,767 10,439 9,699 13,358 11,699 9,817 13,555 8,999 11,905 11,126 11,063
Federal Transfers 3,621 6,896 4,978 5,400 3,347 2,176 4,699 3,360 2,302 2,224 3,900 4,092
Other Non-tax Revenue 4,865 2,548 3,372 2,923 4,317 3,171 3,352 6,043 9,324 5,014 4,493 4,640
                         
Total Spending 20,614 17,980 18,119 18,385 21,256 17,160 18,592 21,826 18,924 18,119 19,097 19,313
Program Spending 19,265 17,053 17,415 17,466 19,291 16,129 17,098 20,895 18,348 17,570 18,053 18,267
Health** 7,143 5,383 7,001 6,869 6,148 5,379 6,319 5,837 5,538 5,859 6,147 6,233
Education** 2,842 3,260 3,101 3,134 2,674 2,987 2,869 3,508 3,013 2,483 2,987 2,987
All Other Program Spending** 9,280 8,410 7,313 7,463 10,469 7,763 7,910 11,550 9,797 9,228 8,918 9,047
Interest on Debt Payments 1,349 927 704 919 1,965 1,031 1,494 931 575 549 1,045 1,046
Table B.2 Combined provincial and municipal financial results as a share of GDP (Per Cent, 2022) * Rest of Canada average includes all provinces except Ontario. ** Health and Education spending is calculated from Statistics Canada’s Table 10-10-0005-01 (Canadian classification of functions of government estimates) and then subtracted from Program Spending to calculate All Other Program Spending. Sources: Statistics Canada Tables 10-10-0147-01, 10-10-0005-01, 36-10-0222-01 and FAO.
  NL PE NS NB QC ON MB SK AB BC Provincial Average Rest of Canada Average*
Budget Balance -0.1 2.2 1.3 -0.7 -0.4 -0.2 -1.2 1.2 1.7 1.4 0.5 0.6
Net Debt 23.1 18.8 17.5 15.4 24.9 25.9 24.8 6.0 5.3 -1.6 16.0 14.9
                         
Total Revenue 26.8 34.3 35.4 32.8 33.4 24.6 29.2 23.6 20.3 25.9 28.6 29.1
Taxes 15.7 17.4 19.7 17.6 21.2 16.9 16.0 14.0 8.8 16.1 16.4 16.3
Federal Transfers 4.7 12.3 9.4 9.8 5.3 3.1 7.7 3.5 2.3 3.0 6.1 6.4
Other Non-tax Revenue 6.4 4.5 6.4 5.3 6.9 4.6 5.5 6.2 9.2 6.8 6.2 6.3
                         
Total Spending 26.9 32.1 34.2 33.4 33.8 24.8 30.4 22.5 18.6 24.6 28.1 28.5
Program Spending 25.1 30.4 32.8 31.8 30.7 23.3 27.9 21.5 18.0 23.8 26.5 26.9
Health** 9.3 9.6 13.2 12.5 9.8 7.8 10.3 6.0 5.4 7.9 9.2 9.3
Education** 3.7 5.8 5.8 5.7 4.3 4.3 4.7 3.6 3.0 3.4 4.4 4.4
All Other Program Spending** 12.1 15.0 13.8 13.6 16.6 11.2 12.9 11.9 9.6 12.5 12.9 13.1
Interest on Debt Payments 1.8 1.7 1.3 1.7 3.1 1.5 2.4 1.0 0.6 0.7 1.6 1.6

 

Graphical Descriptions

Figure 1 Ontario’s revenue per capita was the lowest in Canada in 2022 Sources: Statistics Canada Tables: 10-10-0017-01, 17-10-0005-01, , and FAO. Return to image
  Revenue Per Capita ($,2022)
Province Revenue Per Capita Rest of Canada Average
SK 19,215 16,676
QC 18,447 16,676
NL 17,895 16,676
PE 17,231 16,676
AB 16,762 16,676
NB 15,730 16,676
NS 15,065 16,676
MB 15,032 16,676
BC 14,711 16,676
ON 12,643 16,676
Figure 2 Ontario’s tax revenue per capita was below the average of other provinces in 2022 Sources: Statistics Canada Tables 10-10-0017-01, 17-10-0005-01, 10-10-0019-01 and FAO. Return to image
  Tax Revenue Per Capita ($,2022)
Province Tax Revenue Per Capita Rest of Canada Average
SK 12,197 9,779
QC 11,965 9,779
NL 11,050 9,779
BC 10,163 9,779
ON 9,687 9,779
PE 9,313 9,779
NS 8,937 9,779
MB 8,784 9,779
NB 8,711 9,779
AB 6,891 9,779
Figure 3 Ontario’s tax revenue as a share of GDP was below the average of other provinces in 2022 Sources: Statistics Canada Tables 10-10-0017-01, 36-10-0222-01, 10-10-0019-01 and FAO. Return to image
  Tax Revenue as a Share of GDP (Per Cent, 2022)
Province Tax Revenue as a Share of GDP Rest of Canada Average
QC 19.0 14.5
NS 16.9 14.5
PE 16.6 14.5
NB 15.8 14.5
NL 14.4 14.5
MB 14.3 14.5
ON 14.0 14.5
BC 13.8 14.5
SK 12.6 14.5
AB 6.8 14.5
Figure 4 Ontario’s tax revenue as a share of economic bases compared to the average of other provinces in 2022 Note: The economic bases of personal income tax, corporations tax and sales tax revenues are labour income (total compensation of employees), corporate profits (net operating surplus of corporations) and household spending (household final consumption expenditure), respectively. All other tax revenue is compared against overall economic activity as measured by GDP. Sources: Statistics Canada Tables 10-10-0017-01, 36-10-0221-01, 36-10-0222-01, 10-10-0019-01 and FAO. Return to image
  Tax Revenue as a Share of Economic Base (Per Cent, 2022)
Tax Revenue Category Ontario Rest of Canada Average
Personal Income Tax 8.7 11.0
Corporations Tax 20.2 16.1
Sales Tax 6.6 5.9
All Other Tax 3.3 3.7
Figure 5 Ontario had the lowest federal transfers and other non-tax revenues per capita in 2022 Sources: Statistics Canada Tables 10-10-0017-01, 17-10-0005-01, 10-10-0019-01 and FAO. Return to image
Federal Transfers Per Capita ($, 2022) Other Non-tax Revenues Per Capita($, 2022)
Province Federal Transfers Per Capita Rest of Canada Average Province Other Non-tax Revenues Per Capita Rest of Canada Average
PE 6,669 3,911 AB 7,712 2,987
NB 5,290 3,911 SK 4,020 2,987
NS 4,772 3,911 NL 3,371 2,987
MB 4,537 3,911 QC 3,266 2,987
NL 3,475 3,911 BC 2,465 2,987
QC 3,216 3,911 NB 1,728 2,987
SK 2,998 3,911 MB 1,711 2,987
AB 2,159 3,911 NS 1,356 2,987
BC 2,083 3,911 PE 1,249 2,987
ON 1,984 3,911 ON 971 2,987
Figure 6 Ontario’s total spending per capita was the lowest in Canada in 2022 Sources: Statistics Canada Tables 10-10-0017-01, 17-10-0005-01, 10-10-0019-01 and FAO. Return to image
  Total Spending Per Capita ($, 2022)
Province Total Spending Per Capita Rest of Canada Average
QC 18,877 16,403
SK 18,189 16,403
NL 17,718 16,403
PE 16,896 16,403
NB 15,418 16,403
NS 15,388 16,403
BC 15,357 16,403
MB 15,232 16,403
AB 14,554 16,403
ON 13,065 16,403
Figure 7 Ontario’s program spending per capita was the lowest in Canada in 2022 Sources: Statistics Canada Tables 10-10-0017-01,17-10-0005-01, 10-10-0019-01 and FAO. Return to image
  Program Spending Per Capita ($, 2022)
Province Program Spending Per Capita Rest of Canada Average
SK 17,295 15,389
QC 16,943 15,389
NL 16,437 15,389
PE 16,029 15,389
BC 14,870 15,389
NS 14,689 15,389
NB 14,518 15,389
AB 13,871 15,389
MB 13,847 15,389
ON 12,138 15,389
Figure 8 Health spending in 2022 Sources: Statistics Canada Tables 10-10-0024-01, 17-10-0005-01 and FAO. Return to image
  Health Spending Per Capita ($, 2022)
Province Health Spending Per Capita Rest of Canada Average
NL 6,605 5,765
NS 6,291 5,765
QC 5,953 5,765
NB 5,906 5,765
BC 5,675 5,765
SK 5,596 5,765
PE 5,461 5,765
AB 5,279 5,765
MB 5,117 5,765
ON 4,889 5,765
Figure 9 Education spending in 2022 Note: Education spending includes primary, secondary and postsecondary expenses, among others. Sources: Statistics Canada Tables 10-10-0024-01, 17-10-0005-01, 10-10-0019-01 and FAO. Return to image
  Education Spending Per Capita ($, 2022)
Province Education Spending Per Capita Rest of Canada Average
QC 3,136 2,772
SK 3,071 2,772
PE 3,014 2,772
NB 2,895 2,772
ON 2,843 2,772
NL 2,804 2,772
MB 2,766 2,772
AB 2,536 2,772
NS 2,479 2,772
BC 2,247 2,772
Figure 10 All other program spending in 2022 All other program spending is calculated by subtracting health and education expenses from overall program expense. Sources: Statistics Canada Tables 10-10-0024-01, 17-10-0005-01, 10-10-0019-01 and FAO. Return to image
  All Other Program Spending Per Capita ($, 2022)
Province All Other Program Spending Per Capita Rest of Canada Average
SK 8,628 6,852
QC 7,855 6,852
PE 7,554 6,852
NL 7,028 6,852
BC 6,948 6,852
AB 6,056 6,852
MB 5,965 6,852
NS 5,919 6,852
NB 5,718 6,852
ON 4,406 6,852
Figure 11 Ontario’s interest on debt payments per capita below the average of other provinces in 2022 Sources: Statistics Canada Tables 10-10-0017-01,17-10-0005-01 and FAO. Return to image
  Interest on Debt Payments Per Capita ($, 2022)
Province Interest on Debt Payments Per Capita Rest of Canada Average
QC 1,934 1,014
MB 1,385 1,014
NL 1,281 1,014
ON 927 1,014
NB 900 1,014
SK 894 1,014
PE 867 1,014
NS 699 1,014
AB 683 1,014
BC 487 1,014
Figure 12 Ontario’s budget position was below the average of other provinces in 2022 Sources: Statistics Canada Tables 10-10-0017-01,17-10-0005-01 and FAO. Return to image
  Budget Balance Per Capita ($, 2022)
Province Budget Balance Per Capita Rest of Canada Average
AB 2,208 273
SK 1,026 273
PE 335 273
NB 311 273
NL 179 273
MB -200 273
NS -324 273
ON -422 273
QC -430 273
BC -646 273
Figure 13 Ontario’s net debt per capita above the rest of Canada average in 2022 Sources: Statistics Canada Tables 10-10-0017-01,17-10-0005-01, 36-10-0222-01 and FAO. Return to image
  Net Debt Per Capita ($, 2022)
Province Net Debt Per Capita Rest of Canada Average
ON 19,436 9,439
NL 16,195 9,439
MB 13,574 9,439
NS 11,535 9,439
PE 10,390 9,439
NB 8,902 9,439
QC 7,899 9,439
SK 7,605 9,439
AB 6,007 9,439
BC 2,847 9,439
Figure 14 Ontario’s effective interest rate on debt was below the rest of Canada average in 2022 Sources: Statistics Canada Tables 10-10-0017-01 and FAO. Return to image
  Effective Interest Rate (Per Cent, 2022)
Province Effective Interest Rate Rest of Canada Average
QC 6.6 4.0
PE 4.2 4.0
NS 4.1 4.0
NL 3.8 4.0
MB 3.6 4.0
ON 3.5 4.0
BC 3.4 4.0
SK 3.4 4.0
AB 3.3 4.0
NB 3.1 4.0

Footnotes

[1] Some GFS data are available from 2007; however, the majority of provincial data are only available from 2008.

[2] When the latest GFS data are released, data from previous years are also revised to reflect information not available at the time of the previous release. As a result, figures in this report may not align with those presented in previous reports.

[3] Ontario’s slower growth in 2022 was largely driven by a 6.8 per cent decline in personal income tax revenue per capita, which tempered a 5.4 per cent gain in corporations tax revenue per capita and a 14.4 per cent increase in sales tax revenue per capita. The stronger tax revenue per capita growth in the rest of Canada average resulted from increases in personal income tax revenue per capita of 9.3 per cent, corporations tax revenue per capita of 63.0 per cent and sales tax revenue per capita of 9.1 per cent.

[4] In the provincial economic accounts, labour income corresponds to total compensation of employees, corporate profits to net operating surplus of corporations and household spending to household final consumption expenditure.

[5] The actual tax bases for personal income tax and corporations tax are personal taxable income and corporate taxable income, respectively. These tax bases were not available for 2022 at the time of this report’s publication. The actual tax base for sales tax includes household spending in addition to taxes generated on expenditures from residential construction, businesses and governments. For simplicity, only household consumption is shown.

[6] Because there are many different bases for all other tax revenue, this category is compared against overall economic activity measured by GDP.

[7] Equalization payments are determined by a province’s fiscal capacity to raise revenues through five broad revenue categories: personal income taxes, business taxes, consumption taxes, property taxes and natural resource revenues. As of 2022-23, Ontario has received Equalization payments in only 10 years since the program’s inception in 1957.

[8] Other federal transfers were much lower in Ontario on a per capita basis ($414) compared to the rest of Canada average ($1,011). The FAO calculates other federal transfers in this report by subtracting the Canada Health Transfer, Canada Social Transfer and the Equalization Program (see Major Federal Transfers) from total transfers published in the GFS.

[9] The FAO calculates ‘other non-tax revenues’ in this report as the sum of the Social Contributions and Other Revenue categories in the GFS. These items comprise revenue from social security contributions, resource royalties, the ownership of assets, in addition to revenue generated from the sales of goods and services (including services fees), fines and penalties, and voluntary transfers as well as other miscellaneous revenues. For more information on GFS categories, see the Government Financial Statistics Manual 2014.

[10] In 2022, Ontario collected $20 in resource revenues per capita, well below the rest of Canada average of $1,169.

[11] Ontario’s ownership of assets generated $154 in revenue per capita, below the average of $537 generated in the rest of Canada. The sale of goods and services generated $462 per capita in Ontario, lower than the rest of Canada average of $734.

[12] Ontario’s interest on debt payments per capita ranked seventh highest among the provinces for the 2009 to 2017 period.

[13] The per capita surplus among the average of the rest of Canada was largely driven by Alberta which had a surplus per capita of $2,208 in 2022. Removing Alberta from the rest of Canada average results in a budget surplus of $32 per capita.

[14] During 2015 to 2017, Ontario recorded budget deficits that were smaller than the average deficit recorded in the rest of Canada.

[15] The effective interest rate is calculated as total interest paid divided by gross debt. Gross debt is calculated as the sum of debt securities and loans in Statistics Canada’s GFS Table 10-10-0017-01.

[16] Ontario’s lower effective interest rate may reflect Ontario’s large and diversified economy, high liquidity and debt management program, which are seen as credit strengths that may result in lower borrowing rates. See the FAO’s most recent credit rating report for more discussion on Ontario’s credit quality and borrowing rates.