Category : Budgets

Economic and Budget Outlook, Spring 2019

This report provides an assessment of Ontario’s current economic outlook and the state of the provincial government’s finances.

Comparing the LIFT Credit to a Minimum Wage Increase

This commentary compares the Low-income Individuals and Families Tax (LIFT) credit to the cancelled minimum wage increase from $14 per hour to $15 per hour. The commentary estimates the change to the Province’s budget balance and reviews the impacts to individuals and families.

Ontario Health Sector: 2019 updated assessment of Ontario health spending

This report provides an updated financial assessment of the Province’s health sector and outlines the FAO’s medium-term projection for health spending in Ontario under current policies.

Expenditure Estimates: A Review of Ontario’s Proposed Spending Requirements for the 2018-19 Supply Bill

This report reviews the 2018-19 Expenditure Estimates and identifies key issues, including how the 2018-19 Expenditure Estimates compare to the government’s spending plan in the 2018 Ontario Economic Outlook and Fiscal Review. The report also reviews the largest programs funded through the Supply Bill and identifies spending trends and recent developments.

Economic and Budget Outlook, Spring 2018

This report provides the FAO’s assessment of the province’s medium-term economic performance and fiscal position, and the reasonableness and risks associated with the government’s fiscal recovery plan.

Ontario Health Sector - An Updated Assessment of Ontario Health Spending

This report provides an updated assessment of the Province’s health sector expense plan,  and compares Ontario’s planned health spending to the growth in Ontario’s key drivers of health care costs.

Ontario Service Fees in 2017-18

This backgrounder includes a list of 2017-18 service fee rate changes, a discussion of the growth rate of service fee revenue, and a review of the cost recovery ratios for a selection of service fee categories.

Hydro One: Updated Financial Analysis of the Partial Sale of Hydro One

This report provides an updated estimate of the fiscal impact of the partial sale of Hydro One and reviews key considerations surrounding the sale, such as the potential effect on electricity ratepayers in Ontario.

Economic and Fiscal Outlook, Fall 2017 Update

This report provides an updated Economic and Fiscal Outlook for Ontario based on developments since the release of the FAO’s spring outlook on May 31, 2017.

Long-term Budget Outlook 2017

This report assesses the budget implications of maintaining Ontario’s current fiscal structure through three decades of demographic transition.

Ontario’s Debt Reduction Commitment Based on Unlikely Assumptions

In the 2017 Budget, the government restated its commitment to reduce the net debt-to-GDP ratio to its pre-recession level of 27 per cent.  The Province’s commitment is based on three unlikely assumptions. If any of these assumptions fall short of expectations, the government’s debt-to-GDP target would not be achieved.

Optimistic Revenue Projection Underpins Government’s Balanced Budget Plan

The 2017 Ontario Budget projects balanced budgets beginning in 2017-18 and continuing over the next two years. Given the government’s spending plans, maintaining a balanced budget relies critically on an optimistic revenue forecast – and in particular, on very strong growth in tax revenues. However, there appears to be significant downside risk to the government’s forecast.

Economic and Fiscal Outlook Spring 2017

The FAO’s Economic and Fiscal Outlook provides an assessment of Ontario’s current economic outlook and the state of the provincial government’s finances.

The Impact of a Housing Market Correction on Ontario’s Fiscal Position

The Impact of a Housing Market Correction on Ontario’s Fiscal Position provides the FAO’s assessment of risk to Ontario’s finances from a potential housing market correction.

Understanding Provincial Cash Flows

The annual deficit is a headline number in the Provincial budget and Public Accounts, as well as in the Financial Accountability Officer’s own Economic and Fiscal Outlook. However, this number is not a cash concept. Rather, it is based on accrual accounting. This commentary reviews the importance of understanding cash flow and how the different sources and uses of Provincial cash have changed over time.

Ontario Health Sector: Expense Trends and Medium-Term Outlook Analysis

This report analyzes how the Province plans to achieve the health sector expense targets in the 2016 Ontario Budget, and investigates whether the low health sector expense growth rate required to achieve the targets is sustainable after 2018-19. As part of the analysis, the report reviews how the Province slowed the growth rate of health sector expense starting in 2012-13.

Assessing Ontario's Fiscal Outlook

Based on the FAO’s analysis of the Government’s 2016 Economic Outlook and Fiscal Review, the Province’s plan to balance the budget continues to rely on optimistic assumptions for revenue growth and program spending restraint.

Cap and Trade: An Assessment of the Fiscal Impact of Cap and Trade

This report analyzes the fiscal impact of cap and trade, i.e. how cap and trade will impact the Province’s projected surplus/deficit. Under cap and trade, the Province would sell allowances to emit greenhouse gases. It would then spend the funds raised on initiatives to further reduce greenhouse gas emissions.

Economic and Fiscal Outlook - Update, Fall 2016

This report provides an updated Economic and Fiscal Outlook for Ontario based on developments since the release of the FAO’s spring outlook on May 18, 2016.

Assessing Ontario’s Export Performance in 2016

Ontario’s international trade performance in 2016 is particularly important, since most forecasters expect exports will be a primary driver of Ontario’s economic growth. 
In current dollars, Ontario exports have grown strongly so far in 2016, rising 10%, compared to the same period in 2015.  However, real exports – a better indicator of the actual economic activity related to exports – declined 5.4% in the second quarter — the largest quarterly drop since the 2008-2009 recession. 
The relative weakness of real exports over the first half of 2016 suggests that Ontario exports are not responding as strongly as hoped to the favourable economic conditions provided by the lower dollar and a growing U.S. economy.