By MPP Bobbi Ann Brady
Depending on how you look at the most recent report of Ontario’s Financial Accountability Officer (FAO), there’s bad news and perhaps good.
Keep in mind the mandate of the FAO is to provide an independent analysis of the province’s finances and trends in Ontario’s economy. The FAO was legislated in 2013 through the Financial Accountability Officer Act to provide Ontario’s taxpayers with a financial watchdog.
Peter Weltman, the Financial Accountability Officer recently released his latest report which examined the three years that the province’s Fall Economic Statement (FES) covers. Compared to what was spent on program spending in the FES, funding is $6.8 lower than planned for 2022-23. Year two program spending was $4.5 billion, and year three was $1.2 billion. The shortfalls add up to $12.5 billion in unallocated program spending.
Ultimately, the province will have $12.5 billion in excess funds over the next three years. Despite this, there’s a $5 billion shortfall in health care, a $1.1 billion shortfall in education and $0.8 billion in justice over the same three years. The government could cover these shortfalls in two of Ontario’s most critical systems and still have money to allocate to other programs.
Contingency funds are not abnormal but usually hover around $1 billion. Much of this surplus is due to a contingency fund, which is money excluded in the FAO’s projections because the purpose of those funds has yet to be announced. This year’s contingency fund sits around $3.5 billion, but forecasts for the next two years are still being determined because they are part of confidential cabinet records.
I am fiscally prudent and sometimes believe money is not the only answer. Examining where deficiencies and inefficiencies exist is vital. It’s no secret what the issues are in Ontario’s most critical ministries and systems, and I question what these monies could do for health care in the province. I also look at the possibilities in education and justice. Even the FAO report states if the government wants to support its existing programs, money will need to be moved from the contingency fund to areas identified as shortfalls.
The budget outlook for 2022-23 was for a surplus of $0.1 billion but has changed to a deficit of $2.5 billion. The $2.5 billion is less than the $12.9 billion predicted as a deficit last fall. The unspent program money is part of it, along with an increase of $1.7 billion in revenue. The budget is expected to rise into a surplus, topping $7.6 billion in 2026-27.
Overall, the province’s economy will likely slow in 2023 after rapid growth from slowdowns associated with the pandemic. Inflation and high-interest rates were blamed. The net debt forecasted for 2023-24 is $401.5 billion.
On the positive side, the net debt-to-GDP ratio is expected to hit 34.1 per cent in 2026-27. If this occurs, it will be the lowest ratio since 2010-11 and better than the government’s forecast of 42 per cent.
I am concerned about funding shortfalls identified in the report and the implications for citizens of the riding and the province. I want more transparency than seeing $12.5 billion in contingency funds that aren’t allocated – after all, it’s our money. Comparing it to personal finances, many wise financial planners have a ‘slush fund’ but not at the expense of not having enough food or letting their house fall apart.
Bobbi Ann Brady is the MPP for Haldimand-Norfolk