TORONTO, February 19, 2026 – Today, the Financial Accountability Office of Ontario (FAO) released a report that compares the FAO’s projections for the 2024-25 fiscal year for Ontario’s budget balance, revenue and spending against the actual results published in the Public Accounts of Ontario. In addition, the report reviews the FAO’s historical forecast accuracy since 2016-17 (the first year of FAO forecasting) and compares the FAO’s forecasts against the Government of Ontario’s (the government’s) forecasts in Ontario Budgets. This review is intended to provide transparency and information to Members of Provincial Parliament as they use the FAO’s work, and to assist the FAO in improving on the quality of its projections.
In the FAO’s Spring 2024 Economic and Budget Outlook, released on May 15, 2024, the FAO projected a $6.4 billion budget deficit for 2024-25, which was $5.3 billion below the $1.1 billion actual budget deficit reported in the 2024-25 Public Accounts of Ontario, released on September 26, 2025. The FAO’s revenue projection was $15.2 billion (6.7 per cent) below the actual results for 2024-25 and the FAO’s spending projection was $9.9 billion (4.4 per cent) below the actual results. These underestimates partially offset each other, leading to the $5.3 billion underestimate of the budget balance.
The FAO’s 2024-25 revenue projection was below actual largely due to an $8.8 billion underestimate of other non-tax revenue, as well as underestimates of personal income tax ($2.0 billion) and corporations tax ($3.5 billion). The FAO’s spending projection was below actual due to a combination of new policies introduced by the government during the fiscal year ($3.1 billion); unanticipated developments that affected spending, such as wage and legal settlements ($3.6 billion); and an underestimate of the cost or volume of provincial services and programs ($3.2 billion).
The report also reviewed the FAO’s one-year historical forecast accuracy since 2016-17 (the first year of FAO forecasting) by comparing the FAO’s projections in year one of its Economic and Budget Outlook (EBO) reports against the actual results in the Public Accounts of Ontario. Since 2016-17, the FAO’s one-year average absolute variance (which measures the magnitude of variance regardless of direction) for the budget balance was $8.5 billion. Excluding the pandemic years of 2020-21 and 2021-22, the FAO’s average absolute variance for the budget balance was $3.3 billion.
Finally, the FAO reviewed its three-year historical forecast accuracy by comparing the FAO’s projection in year three of the EBO outlook against the actual results in the Public Accounts of Ontario. Since 2018-19, the FAO’s three-year average absolute variance for the budget balance was $5.5 billion. Excluding the FAO’s projections for 2022-23 and 2023-24 (produced in the pandemic years of 2020-21 and 2021-22), the FAO’s average absolute variance for the budget balance in year three of the EBO outlook was $3.4 billion.
To learn more, read the full report here.
Quick Facts:
- The FAO’s projection for the 2024-25 budget balance in the Spring 2024 EBO was $5.3 billion below actual, while in the 2024 Ontario Budget, the government’s projection was $8.7 billion below actual.
- Since 2016-17, the FAO’s one-year average absolute variance for the budget balance was $8.5 billion, while the government’s average absolute variance was $10.0 billion.
- Since 2016-17, the FAO’s one-year average absolute variance for revenue was 6.1 per cent, while the government’s average absolute variance was 5.0 per cent. Both the FAO’s and the government’s one-year revenue forecasts were below actual in all nine years. By major revenue component, one-year average absolute variances were largest for corporations tax, income from government business enterprises, other non-tax revenue and personal income tax, for both the FAO and the government.
- Since 2016-17, the FAO’s one-year average absolute variance for spending was 2.8 per cent, while the government’s average absolute variance was 1.5 per cent. By sector, the FAO’s one-year average absolute variance was lower than the government’s in health; postsecondary education; children, community and social services; justice; and interest and other debt servicing charges, while the government’s average absolute variance was lower than the FAO’s in the education and ‘other programs’ sectors.
- Since 2018-19, the FAO’s three-year average absolute variance for the budget balance was $5.5 billion, while the government’s was $9.7 billion.
About the FAO:
Established by the Financial Accountability Officer Act, 2013, the Financial Accountability Office of Ontario (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.
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For further information, please contact:
Sophia Zhu l 416 931 5498 l SZhu@fao-on.org l fao-on.org