[La version française suit le texte anglais.]
FAO PROJECTS DEFICIT OF $8.1 BILLION IN 2021-22
TORONTO, July 19, 2022 – Today, the Financial Accountability Office of Ontario (FAO) released its Expenditure Monitor 2021-22: Q4 report. This report provides information on spending by the Province through the end of the 2021-22 fiscal year, including changes to the spending plan, unaudited spending results, an updated budget deficit projection, and the year-end status of the Province’s unallocated funds.
Over 2021-22, the Province increased its spending plan by $6.8 billion to $185.1 billion, with the largest increases to health ($4.1 billion), ‘other programs’ ($3.8 billion), and justice ($0.4 billion). The remaining sectors experienced spending plan decreases, led by children’s and social services (-$0.7 billion), postsecondary education (-$0.3 billion) and education (-$0.3 billion).
Although the Province increased its spending plan by $6.8 billion to $185.1 billion, the Province only spent $177.9 billion by March 31, 2022. All sectors spent below plan, led by ‘other programs’ (-$2.4 billion), health (-$1.8 billion) and interest on debt (-$0.6 billion). Overall, total spending was $7.2 billion (3.9 per cent) less than planned, and the net savings will be used to reduce both the budget deficit and Ontario’s net debt.
Compared to 2020-21, which marked the first year of the COVID-19 pandemic, spending in 2021-22 was down $0.8 billion (0.4 per cent). While some sectors spent more than in the previous year, including health ($4.3 billion), interest on debt ($0.5 billion) and justice ($0.2 billion), others spent less, led by ‘other programs’ (-$4.4 billion), education (-$0.9 billion) and children’s and social services (-$0.5 billion). Spending on ‘other programs’ and education was down year-over-year largely due to lower net spending on COVID-19-related programs.
Based on updated revenue and spending information, the FAO projects the 2021-22 budget deficit will decrease to $8.1 billion, a $5.4 billion improvement compared to the Province’s 2021-22 budget deficit projection of $13.5 billion in the 2022 Ontario Budget, presented on April 28, 2022. Compared to the Province’s projection, the FAO’s 2021-22 budget deficit forecast includes higher projected revenue and lower projected spending.
Find our full report on our website, here.
- Key programs with lower-than-planned spending in 2021-22 include the COVID-19 Response program ($1.1 billion or 42 per cent less than planned) and the property tax component of the Property Tax and Energy Costs Rebate Grants program ($0.2 billion or 43 per cent below plan).
- The $7.2 billion (3.9 per cent) in net savings for 2021-22 is less than the net savings recorded in 2020-21 of $10.3 billion (5.5 per cent) but higher than the pre-COVID-19 historical annual average of $3.8 billion (2.7 per cent) between 2010-11 and 2019-20.
- The Province started the 2021-22 year with a total of $2.1 billion in unallocated funds in the Contingency Fund. In the third quarter, the Province created a new fund, the Time-Limited COVID-19 Fund, and added $3.0 billion in unallocated funds.
- Net transfers from the two unallocated funds to various programs throughout the year amounted to $3.3 billion. The remaining year-end balances were $1.8 billion in the Contingency Fund and zero in the Time-Limited COVID-19 Fund.
About the FAO
Under the Financial Accountability Officer Act, 2013, the Officer 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 and follow us on Twitter and LinkedIn.