PROVINCIAL SPENDING $4.3 BILLION UNDER BUDGET THROUGH FIRST HALF OF 2021-22
TORONTO, November 29, 2021 - Today, the Financial Accountability Office of Ontario (FAO) released its Expenditure Monitor 2021-22: Q2 report. This report provides an update on the Province’s 2021-22 spending plan and reviews actual spending by the government over the first two quarters of the 2021-22 fiscal year (April 1, 2021 to September 30, 2021).
During the first six months of 2021-22, the Province added $692 million in planned program spending. Key second quarter spending plan increases included $97 million to support COVaxON, the Province’s vaccine administration and inventory management system, and $100 million to fight forest fires in Northern Ontario. The $692 million increase in planned program spending was offset by a $709 million drawdown from the Contingency Fund. Overall, as of September 30, 2021, the Province’s full-year 2021-22 spending plan had decreased by $16 million to $178.3 billion.
Looking at actual spending against the spending plan, the Province spent $76.9 billion over the first half of 2021-22, which was $4.3 billion (5.3 per cent) less than planned. Most sectors spent less than planned, led by ‘other programs’ ($1.5 billion), health ($1.0 billion), children’s and social services ($0.8 billion) and education ($0.7 billion). The FAO estimates that if this pace of spending continues, the Province will end the 2021-22 fiscal year with significant program spending savings, which will result in a material improvement to the Province’s current budget deficit projection of $21.5 billion.
Compared to the previous year, spending over the first half of 2021-22 was $2.6 billion (3.5 per cent) more than during the same period in 2020-21. Health sector spending was $3.1 billion (9.8 per cent) more in the first two quarters of 2021-22 compared to 2020-21, with higher spending in a number of program areas, including population and public health ($885 million), Ontario Drug Programs ($828 million), payments to physicians ($456 million), and long-term care homes operations ($373 million) and capital investments ($333 million). On the other hand, spending on children’s and social services was $0.6 billion less, largely due to lower spending for Ontario Works (-$369 million), the Ontario Disability Support Program (-$83 million) and autism services (-$137 million).
Read the full report here.
- Although, as of September 30, 2021, the Province’s 2021-22 spending plan had decreased by $16 million, in the 2021 Ontario Economic Outlook and Fiscal Review (released on November 4, 2021), the Province reported a net spending plan increase of $3.0 billion. The $3.0 billion spending plan increase will be made available in the government’s financial accounts in the third quarter and will be reviewed in the FAO’s Q3 Expenditure Monitor report.
- Key programs with below plan spending, as of September 30, 2021, include:
- In the ‘other programs’ sector, the Province did not spend any of the $1.1 billion budget for municipal transit projects under the Ministry of Transportation.
- In the health sector, the Province spent or reallocated $441 million (16.6 per cent) of the $2.7 billion budget for the COVID-19 Response program.
- In the children’s and social services sector, major programs with the lowest relative spending include Autism, Supportive Services and Ontario Works – Financial Assistance.
- In the education sector, the Province spent $20 million (1.2 per cent) of the $1.7 billion budget for the School Board Capital Grants program.
- The Province started the 2021-22 fiscal year with a total of $2.1 billion in unallocated funds in the Contingency Fund. After accounting for the $709 million in transfers from the Contingency Fund in the first and second quarters, the remaining balance in the Contingency Fund, as of September 30, 2021, was $1.4 billion.
- On November 4, 2021, the Province tabled Supplementary Estimates which created the Time-Limited COVID-19 Fund, with a starting balance of $2.7 billion, and also topped up the Contingency Fund with an additional $0.3 billion. These changes, along with any third quarter transfers from the Contingency Fund and the new Time-Limited COVID-19 Fund, will be reflected in the FAO’s Q3 Expenditure Monitor report.
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 at http://www.fao-on.org/en/ and follow us on Twitter at https://twitter.com/InfoFAO.