Media Release: FAO projects budget surpluses in Ontario over the next six years

[La version française suit le texte anglais.] 


TORONTO, October 27, 2022  Today, the Financial Accountability Office of Ontario (FAO) released a report that provides its projection of the Ontario government’s fiscal position over the 2022-23 to 2027-28 period, based on current policies and announced commitments.

Ontario’s strong economy and accelerating inflation drove extraordinary revenue growth in 2021-22 which led to a $2.1 billion budget surplus. While revenue growth is projected to slow over the outlook, the FAO projects that it will continue to outpace program spending increases, leading to growing budget surpluses from $0.1 billion in 2022-23 to $8.5 billion in 2027-28.

Ongoing budget surpluses are projected to improve Ontario’s fiscal sustainability indicators. The net debt-to-GDP ratio is expected to decline from 39.2 per cent in 2021-22 to 31.5 per cent by 2027-28, the lowest debt burden since 2008-09.

The pace of Ontario’s economic growth is expected to slow sharply to just 0.7 per cent in 2023, reflecting the impact of higher interest rates and ongoing inflation. However, there are significant downside risks to the economic outlook that could slow growth further and negatively affect Ontario’s fiscal outlook.

Compared to the FAO’s spending projection, the 2022 Ontario Budget contains funding shortfalls across all program sectors, totaling an estimated $40.0 billion over six years, with the largest shortfalls in health ($23.4 billion over six years), education ($6.0 billion), and children’s and social services ($4.3 billion). However, the FAO estimates that the government’s spending plan includes $44.0 billion in unallocated contingency funds. The Province will need to use these contingency funds to address the program sector shortfalls identified by the FAO, or make program changes to achieve its sector spending plan targets.

To learn more, read the full report here.

Quick Facts:

  • In 2021-22, tax revenues increased by $20.8 billion – a larger gain in a single year than the increase over the previous five years ($19.1 billion).
  • The FAO projects that the Province will spend $178.9 billion on programs in 2022-23, a 5.0 per cent increase from the $170.5 billion spent in 2021-22.
  • As a share of revenue, debt interest payments are projected to decline to 5.8 per cent in 2027-28, the lowest share on record back to the early 1980s.
  • As the economy slows, Ontario’s job market is expected to cool, with the unemployment rate rising from 5.7 per cent in 2022 to 6.4 per cent in 2023.

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


For further information, please contact: 
Jessica Martin l 647.527.2385 l l