Media Release: Federal and provincial governments to spend $170.3 billion in Ontario in response to the COVID-19 pandemic

FOR IMMEDIATE RELEASE

[La version française suit le texte anglais.]

FEDERAL AND PROVINCIAL GOVERNMENTS TO SPEND $170.3 BILLION IN ONTARIO IN RESPONSE TO THE COVID-19 PANDEMIC

TORONTO, October 6, 2021 - Today, the Financial Accountability Office of Ontario (FAO) released a report that provides an updated summary of the measures implemented in Ontario by the Government of Ontario (the Province) and the Government of Canada (the federal government) in response to the COVID-19 pandemic. The report also provides information on the sources of funding for provincial measures and estimates the timing of provincial spending.

The FAO has identified 128 federal government measures and 118 provincial measures for a total of 246 COVID-19 response measures, categorized as direct support measures (increased spending and reduced revenue) and liquidity measures (tax deferrals and interest-free loans).

Federal and provincial direct support measures will provide Ontario with a net total of $170.3 billion in support from 2019-20 to 2022-23, with federal measures totalling $144.7 billion and provincial measures totalling $35.4 billion. After accounting for $9.8 billion in federal cash transfers to the Province, the federal government’s share of direct support measures is 85 per cent ($144.7 billion) and the provincial government’s share is 15 per cent ($25.6 billion).

Most of the direct support measures will benefit businesses ($66.4 billion, 39 per cent) and individuals ($65.0 billion, 38 per cent), with the remaining support allocated to the health sector ($25.3 billion, 15 per cent), municipalities ($5.1 billion, three per cent), schools and child care ($3.5 billion, two per cent), and ‘other’ areas ($5.0 billion, three per cent).

The FAO estimates that of the $35.4 billion in total provincial direct support measures, $18.5 billion (52 per cent) is new provincial spending, $9.8 billion (28 per cent) will be funded by cash transfers from the federal government, and $7.1 billion (20 per cent) is reallocated spending and savings from non-COVID-19-related provincial programs. This means that, when compared against the Province’s spending plan before the start of the COVID-19 pandemic, the net cost to the Province from its direct support measures is an estimated $18.5 billion over four years, as the remaining measures were either funded by the federal government or from reallocations and savings from other provincial program budgets.

The FAO reviewed the timing of spending for the Province’s $35.4 billion in direct support measures and found $0.2 billion (less than one per cent) was spent in 2019-20, $20.6 billion (58.2 per cent) was spent last fiscal year (2020-21), and the remaining $14.6 billion (41.2 per cent) is expected to be spent in this fiscal year and 2022-23. Looking specifically at 2020-21, the FAO found that provincial spending levels increased each quarter, with spending in the fourth quarter (January 1, 2021 to March 31, 2021) reaching an estimated $10.5 billion or 51.2 per cent of total provincial spending on direct support measures in 2020-21.

Read the full report here.

Quick facts:

  • A complete list of the 246 COVID-19 response measures identified by the FAO is available on the FAO’s website at https://bit.ly/39u0kRS.
  • Since September 2020, the net total of $170.3 billion in direct support measures has increased by $64.7 billion (61.2 per cent), with the federal government contributing nearly two-thirds of the increase ($42.6 billion) and the Province contributing over one-third ($22.0 billion).
  • The FAO has identified nine streams of federal cash transfers that will provide a total of $9.8 billion to the Province by the end of 2022-23. All nine streams have been fully allocated by the Province to provincial direct support measures.
  • For 2020-21, by quarter, the FAO estimates that provincial spending on COVID-19 direct support measures was $2.4 billion (11.5 per cent) in the first quarter, $2.8 billion (13.6 per cent) in the second quarter, $4.9 billion (23.6 per cent) in the third quarter, and $10.5 billion (51.2 per cent) in the fourth quarter.
    • In the health sector, 70 percent ($5.6 billion) of 2020-21 provincial spending on health sector COVID-19 measures occurred in the last six months of the fiscal year, reflecting the timing of health sector activity, such as hospitalizations, COVID-19 testing and vaccinations.
  • The FAO estimates that there are 20 federal and provincial liquidity measures that will provide Ontario with a net total of $78.2 billion in liquidity support, including 13 federal measures totalling an estimated $67.9 billion and seven provincial measures totalling $10.3 billion.
    • Combined with provincial direct support measures, total provincial COVID-19 response measures are estimated at $45.7 billion over four years, from 2019-20 to 2022-23. This is $5.3 billion less than the Province’s estimate of $51 billion over four years reported in the 2021 Ontario Budget.

About the FAO

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. Visit our website at http://www.fao-on.org/en/ and follow us on Twitter at https://twitter.com/InfoFAO.

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For further information, please contact:
Anna Giannini  |  647.527.2385  |  AGiannini@fao-on.org  |  fao-on.org