Media Release: FAO releases long-term budget outlook: 2021-2050

[La version française suit le texte anglais.]   


Ontario’s finances manageable through 2020s, constrained over longer term

TORONTO, March 10, 2022  Today, the Financial Accountability Office of Ontario (FAO) released its Long-Term Budget Outlook. The report provides a projection of Ontario’s economy and fiscal position through 2050-51, based on current and announced government policies and the outlook for underlying cost drivers.

Ontario’s budget deficits and debt burden are expected to improve in the 2020s as the province recovers from the COVID-19 pandemic and the economy rebounds strongly. However, during the 2030s and 2040s, the FAO projects a steady deterioration in Ontario’s deficits as growth in program spending and interest expense outpaces revenue gains.

Over the long term, the FAO expects the government’s fiscal flexibility will be constrained. Rising budget deficits are projected to increase Ontario’s debt burden. As interest rates rise, the province’s interest on debt as a share of revenue is projected to increase at a steady rate. This would reduce the government’s budget flexibility as a smaller share of revenue would be available to fund program spending such as health care or education.

“Our long-term budget outlook is a reference point against which future policy changes can be assessed,” said Peter Weltman, Ontario’s Financial Accountability Officer. “Any policy changes that increase program spending and/or cut taxes in the short term will impact the government’s fiscal position in the longer term.”

Find our full report on our website, here.

Quick facts:

  • The Province’s net-debt-to-GDP ratio is expected to decline from its current level of 41 per cent in 2021-22 to 35 per cent in the early 2030s. By the end of the projection, the debt burden rises to its current share of 41 per cent.
  • By 2050-51, interest on debt as a share of revenues jumps to 10.4 per cent, well above its pandemic level of 7.4 per cent.
  • The share of seniors in the population is expected to rise from 18 per cent in 2021 to 22 per cent in 2050. An aging population will contribute to a slower growth in the labour force and the overall economy, while continuing to put pressure on health care expenses.
  • Ontario’s population gains will become increasingly dependent on net migration, which is projected to account for 90 per cent of population growth by 2050, up from its historical average of 65 per cent.
  • By 2050, there will be a projected 20.6 million people living in Ontario.

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 or follow us on Twitter and LinkedIn for more information on our reports.  


For further information, please contact:
Jessica Martin l 647 527 2385 l l