[La version française suit le texte anglais.]
PROVINCE’S $17 BILLION ACTION PLAN TO PROVIDE ONLY $13.5 BILLION IN COVID-19 RESPONSE SUPPORT
TORONTO, May 28, 2020 - The FAO has released its report on the government’s 2020-21 spending plan presented in the March 2020 Economic and Fiscal Update (March 2020 Update). The report reviews how the $174.3 billion spending plan for 2020-21 has changed since the 2019 Ontario Budget and assesses the Province’s $17 billion Action Plan: Responding to COVID-19.
In the March 2020 Update, the 2020-21 spending plan is up $10.8 billion, or 6.6 per cent, from the 2019-20 spending plan in the 2019 budget. The $10.8 billion increase consists of $2.2 billion that was already accounted for at the time of the 2019 budget and $8.7 billion that was added in the March 2020 Update.
The FAO reviewed the $8.7 billion in new funding and found that $3.2 billion (or 37 per cent) was added to program budgets prior to the COVID-19 outbreak, largely to maintain existing service levels (hospitals and long-term care homes), update spending forecasts (physician payments, student enrollment and electricity price mitigation programs), and to reverse missed 2020-21 savings targets included at the time of the 2019 budget. Of the remaining funding, the FAO identified $4.1 billion (or 47 per cent) in spending for identified measures in response to the COVID-19 outbreak and unallocated funds that have been earmarked by the Province as available to support the COVID-19 outbreak response.
Finally, the FAO reviewed the Province’s $17 billion Action Plan against the new spending and revenue measures included in the March 2020 Update and found only $13.5 billion in new support related to the COVID-19 outbreak. There are two main reasons for the $3.5 billion difference: the Province included new spending in the health sector and for electricity price mitigation programs that is not related to the COVID-19 outbreak response, and the Action Plan’s revenue measures will provide less cash flow support due to the deterioration of the 2020-21 economic outlook since the time of the March 2020 Update.
- At the time of the 2019 budget, the children’s and social services, justice and other programs sectors were all projected to have year-over-year spending decreases in 2020-21, which were reversed in the March 2020 Update.
- New spending in 2020-21 includes:
- $596 million to defer and reverse program cuts included in the 2019 budget (public health, municipal ambulance services, secondary school class sizes, child care funding for municipalities, Ontario Works and Ontario Disability Support Program earnings exemptions);
- $279 million to enhance the Autism program; and
- $750 million for children’s and social services programs as a result of missed 2020-2021 savings targets introduced at the time of the 2019 budget.
- The total 2020-21 spending plan of $174.3 billion has approximately $3.4 billion in unallocated funds available for new initiatives, including $2.1 billion that has been earmarked to respond to the COVID-19 outbreak.
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 at www.fao-on.org/en and follow us on Twitter at twitter.com/InfoFAO.