Media Release: FAO projects balanced budget by 2023-24, $7.1 billion surplus by 2026-27

[La version française suit le texte anglais.] 


TORONTO, April 12, 2022  Today, the Financial Accountability Office of Ontario (FAO) released a report that provides its projection of the Ontario government’s fiscal position to 2026-27, based on information available up to March 28, 2022.

Ontario’s robust economic recovery and healthy revenue growth are expected to drive significant fiscal progress. The FAO projects that after recording a deficit of $8.7 billion in the fiscal year ending March 31, 2022, the Province will balance the budget by 2023-24 and run a surplus of $7.1 billion by 2026-27.

These budget surpluses would noticeably improve Ontario’s fiscal sustainability indicators over the projection. The province’s net debt-to-GDP ratio is expected to decline to 33.9 per cent by 2026-27, the lowest since 2009-10. Debt interest payments as a share of revenue are projected to decline from 7.4 per cent in 2020-21 to 6.2 per cent by 2026-27, the lowest since 1981-82.

Strong economic growth will support Ontario’s revenues, which are expected to grow by an average annual rate of 4.8 per cent over 2020-21 to 2026-27, a full percentage point faster than the growth recorded over the previous seven-year period.

Program spending is projected to increase by an average annual rate of 3.6 per cent over the projection, higher than the 3.4 per cent growth rate from 2013-14 to 2019-20. This increase is in part due to spending commitments for long-term care homes and the federal-provincial agreement to provide a ‘$10-a-day’ child care program.

Ontario’s economic recovery has generally been resilient, but an escalation in geopolitical conflict, renewed supply chain challenges, higher inflation or another wave of COVID-19 could lead to weaker economic and revenue growth, and upward pressure on program spending. Government policy changes in the upcoming 2022 Ontario Budget would also impact the FAO’s budget outlook. 

Find our full report on our website, here.

Quick facts:

  • Near-term economic growth is expected to be robust. Nominal GDP – which provides a broad measure of the tax base – is projected to have increased by 11.9 per cent in 2021, the strongest growth since 1984, followed by a gain of 7.2 per cent in 2022.
  • The FAO’s revenue projection has been revised up substantially over the past year, reflecting the impact of significant federal income support programs for workers and business during the pandemic and the federal-provincial agreement for a ‘$10-a-day’ child care program. By 2023-24, the FAO’s updated revenue outlook is $17.2 billion higher compared to the projection released in 2021.
  • Under current government programs and policies, the FAO projects that total program spending will reach $195.5 billion in 2026-27, an increase of $43.3 billion from 2019-20 spending levels.
  • The growth in program spending is not expected to keep pace with population growth and the elevated rate of inflation over the projection, leading to a decline in spending per Ontarian in real dollars.  

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 and follow us on Twitter and LinkedIn


For further information, please contact: 
Jessica Martin l 647.527.2385 l l