FORM 18-K
For Foreign Governments and Political Subdivisions Thereof
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL REPORT
of
PROVINCE OF ONTARIO
(Canada)
(Name of Registrant)
Date of end of last fiscal year: March 31, 2005
SECURITIES REGISTERED*
(As of the close of the fiscal year)
Title of Issue Amounts as to which Names of exchanges
registration is effective on which registered
N/A N/A N/A
Name and address of persons authorized to receive notices and
communications from the Securities and Exchange Commission:
Ariel Delouya
Counsellor
Canadian Embassy
501 Pennsylvania Avenue N.W.
Washington, D.C. 20001
Copies to:
Christopher J. Cummings
Shearman & Sterling
Commerce Court West, 199 Bay Street
Suite 4405, P.O. Box 247
Toronto, Ontario, Canada M5L IE8
* The Registrant is filing this annual report on a voluntary basis.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this annual report to be signed on its behalf by the
undersigned, thereunto duly authorized, at Toronto, Ontario.
PROVINCE OF ONTARIO
(Name of registrant)
December 9, 2005 By: /s/ Michael D. Manning
-------------------------------------------------
Name: Michael D. Manning
Title: Executive Director
Capital Markets Division
Ontario Financing Authority
Exhibit Index
Exhibit (a): None
Exhibit (b): None
Exhibit (c): The 2005 Ontario Budget (incorporated by reference to
Amendment No. 3 on Form 18-K/A dated May 11, 2005 to the
Annual Report of the Province of Ontario)
Exhibit (d): Province of Ontario - Description
EXHIBIT (d)
[ ONTARIO LOGO ]
This description of the Province of Ontario
is dated December 9, 2005 and appears as
Exhibit (d) to the Province of Ontario's
Annual Report on Form 18-K to the
U.S. Securities and Exchange Commission for
the fiscal year ended March 31, 2005.
THE DELIVERY OF THIS DOCUMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE. THIS DOCUMENT (OTHERWISE THAN AS PART OF A PROSPECTUS CONTAINED IN A REGISTRATION STATEMENT FILED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED) IS FOR INFORMATION PURPOSES ONLY AND IS NOT INTENDED TO BE USED OR RELIED UPON IN CONNECTION WITH THE PURCHASE
OR SALE OF ANY SECURITIES OF THE PROVINCE OF ONTARIO, IS NOT A PROSPECTUS, INFORMATION MEMORANDUM OR SIMILAR DOCUMENT AND IS NOT AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OF THE PROVINCE OF ONTARIO.
TABLE OF CONTENTS
Page
PROVINCE OF ONTARIO SUMMARY INFORMATION....................................................................................... 3
1. OVERVIEW.................................................................................................................. 4
2. ECONOMY................................................................................................................... 6
MAJOR ECONOMIC INDICATORS................................................................................................ 6
RECENT ECONOMIC DEVELOPMENTS............................................................................................. 8
STRUCTURE OF THE ECONOMY................................................................................................. 9
LABOUR FORCE............................................................................................................. 11
SOCIAL SECURITY SYSTEM................................................................................................... 12
GOVERNMENT RESPONSIBILITIES AND RELATIONSHIPS............................................................................ 13
3. PUBLIC FINANCE............................................................................................................ 15
FINANCIAL REPORTING...................................................................................................... 15
FISCAL POSITION.......................................................................................................... 18
REVENUE.................................................................................................................. 20
EXPENSE.................................................................................................................. 26
OUTLINE OF PRINCIPAL PROVINCIAL INSTITUTIONS............................................................................. 32
SINKING FUNDS............................................................................................................ 32
4. PUBLIC DEBT............................................................................................................... 33
DEBT..................................................................................................................... 33
ASSETS AND LIABILITIES................................................................................................... 34
CONSOLIDATED DEBT OF THE ONTARIO PUBLIC SECTOR........................................................................... 45
SELECTED DEBT STATISTICS................................................................................................. 46
FINANCIAL TABLES......................................................................................................... 47
_______________
In this document, unless otherwise specified or the context otherwise requires, all dollar amounts are expressed in Canadian
dollars. All foreign currency conversions are reported at statement date exchange rates, unless otherwise specified. The inverse of
the noon buying rate in New York City on December 9, 2005 for cable transfers in Canadian dollars, as certified for customs purposes
by the Federal Reserve Bank of New York was $1.00 = $0.8636 (U.S.). See “4. Public Debt — (4) Selected Debt Statistics — The Canadian
Dollar.”
_______________
In this document, statistics for the economy of the Province of Ontario (“Ontario” or the “Province”) are set forth on a calendar
year basis at market prices, except as otherwise indicated. Economic statistics for recent years frequently are estimates or
preliminary figures which are subject to adjustment. Financial statistics for the Province are set forth on a fiscal year basis (from
April 1 to March 31 of the succeeding year), unless otherwise noted.
_______________
In this document, unless otherwise specified, references to average growth rates refer to the average annual compound rate of
growth. This is computed by expressing the amount of growth during the period as a constant annual rate of growth compounded
annually. The computational procedure used is the geometric average of the annual rates from the first to the last year's observation
of the variables.
_______________
This document appears as an exhibit to the Province's Annual Report to the U.S. Securities and Exchange Commission on Form 18-K
for the fiscal year ended March 31, 2005. Additional information with respect to the Province is available in such Annual Report and
in amendments thereto. Such Annual Report, exhibits and amendments are available to the public on the Internet on the SEC's web site
located at http://www.sec.gov. and can be read and copied at the public reference facilities maintained by the Commission at
100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information about the public
reference room and the applicable copy charges. Copies of such documents may also be obtained without charge from the Province of
Ontario, Ontario Financing Authority, Capital Markets Division, One Dundas Street West, 14th Floor, Toronto, Ontario M7A 1Y7,
telephone (416) 325-8128.
_______________
PROVINCE OF ONTARIO SUMMARY INFORMATION
The following information is a summary only and is qualified in its entirety by the detailed information elsewhere in this
document. Unless otherwise indicated, all dollar amounts are expressed in Canadian dollars.
Year ended December 31,
2000 2001 2002 2003 2004
(in millions unless otherwise indicated)
Economy(1)
Gross Domestic Product at Market Prices.................... $ 440,759 $ 453,701 $ 478,141 $ 493,345 $ 517,407
Personal Income............................................ 347,653 361,187 370,599 382,211 396,757
Consumer Price Index (annual change)....................... 2.9% 3.1% 2.0% 2.7% 1.9%
Unemployment (average annual rate)......................... 5.8% 6.3% 7.1% 7.0% 6.8%
Current
Outlook
2001-02 2002-03 2003-04 2004-05 2005-06(2)
(in millions)
Government Finances
Revenue.............................................................. $ 66,534 $ 68,891 $ 68,400 $ 77,841 $ 82,132
Expense
Programs........................................................... 53,932 57,204 62,104 67,009 71,257
Capital(3)......................................................... 1,890 1,876 2,175 3,019 2,673
Interest on Debt................................................... 10,337 9,694 9,604 9,368 9,571
Total Expense........................................................ 66,159 68,774 73,883 79,396 83,501
Surplus/(Deficit) Before Reserve..................................... $ 375 $ 117 $ (5,483) $ (1,555) $ (1,369)
Reserve.............................................................. $ — $ — $ — $ — $ 1,000
Surplus/(Deficit).................................................... $ 375 $ 117 $ (5,483) $ (1,555) $ (2,369)
Net Debt(4).......................................................... 132,121 132,647 138,557 140,662 144,024
Accumulated Deficit(4)............................................... $ 132,121 $ 118,705 $ 124,188 $ 125,743 $ 128,112
As at March 31,
2001 2002 2003 2004 2005
(in millions)
Public Sector Debt
Net Debt(4).......................................................... $ 132,496 $ 132,121 $ 132,647 $ 138,557 $ 140,662
Obligations Guaranteed............................................... 2,816 2,788 4,100 3,400 3,200
Other Public Sector Debt............................................. 7,234 7,212 9,704 10,828 12,863
Total.................................................................. $ 142,546 $ 142,121 $ 146,451 $ 152,785 $ 156,725
__________
(1) See “2. Economy — (2) Recent Economic Developments” for the most recently available economic indicators.
(2) Second-quarter fiscal forecast as at September 30, 2005.
(3) Starting in 2002-03, major tangible capital assets owned by Provincial ministries (land, buildings and transportation
infrastructure) are accounted for on a full accrual accounting basis. Other tangible capital assets owned by Provincial
ministries will continue to be accounted for as expense in the year of acquisition or construction. All capital assets owned by
consolidated government organizations are accounted for on a full accrual basis.
(4) Net Debt is calculated as the difference between liabilities and financial assets. The annual change in Net Debt is equal to the
Surplus/Deficit plus the change in tangible capital assets. Accumulated Deficit is calculated as the difference between
liabilities and financial and tangible capital assets. The annual change in the Accumulated Deficit is equal to the
Surplus/Deficit.
Sources: Ontario Ministry of Finance and Statistics Canada.
1. OVERVIEW
Area and Population
The Province of Ontario covers an area of approximately 1,076,395 square kilometers (415,598 square miles), about 10.8% of Canada,
and is about 11.0% as large as the United States. The estimated population of Ontario on July 1, 2005 was 12.5 million, or 38.9% of
Canada's population of 32.3 million. Since 1992, the populations of Ontario and Canada have increased at average annual rates of 1.3%
and 1.0%, respectively. Although it constitutes only 12% of the area of the Province, Southern Ontario contains approximately 93.5%
of the Province's population. The population of the Greater Toronto Area, the largest metropolitan area in Canada, was estimated to
be 5.65 million on July 1, 2004.
Government
Canada is a federation with a parliamentary system of government. Constitutional responsibilities are divided between the federal
government, the 10 provinces and the 3 territories.
The Premier of the Province of Ontario (“Premier”) is traditionally the leader of the political party with the greatest number of
members elected to the legislative assembly of the Province (“Legislative Assembly”). The Cabinet through the Lieutenant Governor,
who represents the Crown, formally exercises executive power. Cabinet ministers are usually nominated from among members of the
Premier's party.
The Legislative Assembly consists of 103 seats, each representing a specified territorial division of the Province, and is elected
for a five-year term. A dissolution of the Legislative Assembly prior to the end of the five-year term may be requested by the
Premier at the Premier's own volition or if the government loses the confidence of the Legislative Assembly by being defeated on an
important vote.
The last Provincial election was held on October 2, 2003. Present party standings in the Legislative Assembly are: Liberal Party
of Ontario, 71 seats; Progressive Conservative Party of Ontario, 22 seats; New Democratic Party of Ontario, 7 seats and vacant,
3 seats. The current government of the Province is formed by the Liberal Party.
Economic Setting
Gross Domestic Product (“GDP”) at current market prices in 2004 was $517,407 million, representing 40.1% of the Canadian GDP.
Personal income per capita in 2004 was $31,978, or 5.4% above the national average.
An indication of the Province's importance in several areas of Canadian economic activity is illustrated below.
Ontario's Share Of Canadian Economic Activity, 2004
Total
Canadian
Economic Ontario's Share of
Activity Canadian Total
(in millions) (%)
Gross Domestic Product............................................................................ $ 1,290,185 40.1
Business Investment............................................................................... 225,867 35.1
Exports........................................................................................... 492,580 46.3
Consumption....................................................................................... 721,235 40.2
Personal Income................................................................................... 970,198 40.9
__________
Sources: Statistics Canada and Ontario Ministry of Finance.
The Provincial economy displays many of the characteristics of a mature economy, including substantial secondary and service
sectors. In broad terms, the primary sector is composed of agriculture, mining and forestry, while manufacturing, utilities and
construction form the secondary sector. The remaining categories, such as transportation, communication, wholesale and retail trade
and business and public service, make up the service sector. Ontario shows a stronger concentration in manufacturing than both the
United States and the whole of Canada.
Percentage Distribution Of Real Gross Domestic Product By
Industry, 2004
(at 1997 Prices)
Ontario Canada United States(1)
(%) (%) (%)
Primary Sector...................................................................................... 1.9 6.1 2.3
Secondary Sector.................................................................................... 28.3 25.6 19.4
Service Sector...................................................................................... 69.8 68.3 78.3
Total............................................................................................... 100.0 100.0 100.0
__________
Sources: Ontario Ministry of Finance, Statistics Canada and the United States Department of Commerce.
(1) GDP in current dollars
Foreign Relations
The Province has no direct diplomatic relations with foreign countries, but has developed a high degree of international activity
in order to facilitate investment in Ontario.
2. ECONOMY
(1) Major Economic Indicators
Overview
Ontario's GDP at current market prices in 2004 was $517,407 million. GDP in constant 1997 dollars (“Real GDP”) was
$470,026 million in 2004, an increase of 2.7% over 2003. The five-year average annual growth rate of real GDP from 2000 to 2004 was
3.0%. Real GDP in 2004 increased at a quarterly rate of 0.3% in the first quarter, 1.5% in the second quarter, 1.5% in the third
quarter and 0.7% in the fourth quarter.
Ontario's economy grew by 2.7% in 2004, rebounding from a series of shocks that slowed growth to 1.6% in 2003. Economic growth was
fuelled by strong domestic demand in 2004 with Ontario households and businesses benefiting from low interest rates and healthy after
tax incomes. Consumer spending grew by 3.2% while housing construction advanced 4.1%. Business investment in machinery and equipment
was up a strong 8.2%, partially offset by slower non-residential construction investment which declined by 7.1%. Despite a high
Canadian dollar, Ontario exports also rebounded in 2004, growing by 5.6% after a 0.8% decline in 2003.
The following table provides a summary of major economic indicators for Ontario from 2000 to 2004. For the most recently available
economic indicators, See “2. Economy — (2) Recent Economic Developments”.
Major Economic Indicators
Average
Annual
Rate of
Year ended December 31, Growth
2000 2001 2002 2003 2004 2000-2004
(in millions unless otherwise indicated) (%)
Personal Expenditure on Consumer Goods and Services........ $ 239,681 $ 250,261 $ 264,838 $ 277,351 $ 290,235 5.4
Government Expenditure on Goods and Services............... 82,335 87,206 92,915 100,202 105,394 6.6
Business Gross Fixed Capital Formation..................... 68,135 70,520 72,155 74,890 79,352 4.0
Exports of Goods and Services.............................. 320,536 315,422 322,473 307,945 324,267 2.1
Imports of Goods and Services.............................. 274,513 267,797 274,629 270,010 284,774 2.7
Adjustment for Inventory Changes........................... 3,983 -1,446 610 2,895 2,560 —
Statistical Discrepancy and Other Transactions............. 602 -461 -220 72 374 —
Gross Domestic Product at Market Prices.................... 440,759 453,701 478,141 493,345 517,407 4.8
Gross Domestic Product in Constant 1997 Prices............. 429,105 436,762 450,636 457,649 470,026 3.0
Gross Domestic Product Price Deflator (Index).............. 102.7 103.9 106.1 107.8 110.1 1.7
Personal Income (Ontario).................................. 347,653 361,187 370,599 382,211 396,757 4.3
Personal Income (Canada)................................... 840,382 876,471 899,282 930,093 970,198 4.4
Personal Income per Capita (July Population):
Ontario (in dollars)..................................... 29,751 30,358 30,623 31,177 31,978 2.7
Canada (in dollars)...................................... 27,384 28,254 28,665 29,369 30,343 3.3
Population (July in thousands):
Ontario.................................................. 11,685 11,898 12,102 12,260 12,407 1.4
Canada................................................... 30,689 31,021 31,373 31,669 31,974 1.0
Year ended December 31,
Average
2000 2001 2002 2003 2004 2000-2004
Consumer Price Index (annual Change):
Ontario........................................................................... 2.9% 3.1% 2.0% 2.7% 1.9% 2.5%
Canada............................................................................ 2.7% 2.6% 2.2% 2.8% 1.9% 2.4%
Unemployment (average annual Rate):
Ontario........................................................................... 5.8% 6.3% 7.1% 7.0% 6.8% 6.6%
Canada............................................................................ 6.8% 7.2% 7.7% 7.6% 7.2% 7.3%
__________
Totals may not add due to rounding.
Sources: Ontario Ministry of Finance and Statistics Canada.
Personal Expenditure
In 2004, personal expenditure on consumer goods and services, the largest component of GDP, increased 4.6% over 2003. From 2000
through 2004, personal expenditure increased at an average annual rate of 5.4%.
Government Expenditure
Expenditure by the federal, provincial and municipal governments in Ontario (excluding transfer payments and subsidies) comprised
20.4% of provincial output in 2004.(1) From 2000 through 2004, government expenditure increased at an average annual rate of 6.6%.
Capital Expenditure
In 2004, total capital expenditure was $92,818 million, or 17.9% of GDP, up 5.3% from $88,126 million in 2003. The major sources
of total capital expenditure were housing (31.8%), trade, finance, commercial and information and cultural industries (26.6%),
institutional services and government departments (15.7%), manufacturing (10.6%), transportation, warehousing and utilities (8.8%),
primary and construction industries (4.8%) and professional, scientific and technical services (1.7%). From 2000 through 2004, total
capital expenditure increased at an average annual rate of 4.6%.
Business gross fixed capital formation in 2004 was $79,352 million. This accounted for 85.5% of total capital expenditure and
15.3% of GDP at current market prices.
Exports and Imports
In 2004, Ontario's exports of goods and services totaled $324,267 million, the equivalent of 62.7% of Ontario's nominal GDP, of
which 70.3% were international exports and 29.7% were interprovincial exports. By comparison, Ontario international exports
represented 46.3% of Canada's total exports. Ontario's imports of goods and services totaled $284,774 million in 2004, resulting in a
positive overall trade balance of $39,493 million.
Ontario's international goods exports include: motor vehicles and parts, which accounted for 45.7% of its total value of
merchandise exports in 2004; capital equipment such as machinery, electrical and electronic goods, and scientific and professional
equipment, which accounted for 19.8%; industrial materials such as steel, chemicals, plastics and rubber, which accounted for 18.1%;
agricultural, forestry, energy and mining-related products, which accounted for 9.9%; and consumer goods such as furniture, drugs and
clothing, which accounted for 4.1%.
Ontario's leading interprovincial exports include financial, insurance and real estate services, wholesale trade, food products,
transportation equipment, chemicals and electrical equipment.
Under the Free Trade Agreement (“FTA”), which came into force on January 1, 1989, tariffs between the United States and Canada
were phased out entirely on January 1, 1999. The North American Free Trade Agreement (“NAFTA”) between Canada, Mexico and the United
States, which came into effect on January 1, 1994, liberalizes trade with Mexico and improves on many of the provisions of the FTA. A
bilateral free-trade agreement between Canada and Chile came into force on July 5, 1997. Canada-Chile agreement, which provides for
the liberalization of trade and investment between the two countries, was negotiated to serve as an interim step to bridge Chile's
accession to NAFTA. In addition, a new World Trade Organization Agreement (“WTO”) (formerly the General Agreement on Trade and
Tariffs) was implemented on January 1, 1995. It has resulted in a 40% reduction in average tariffs worldwide and makes major advances
in rules governing trade in agriculture, services and intellectual property.
(2) Recent Economic Developments
Real output in the Ontario economy grew by 0.4% (1.6% annualized) in the second quarter of 2005, measured in 1997 dollars, down
from a 0.5% pace (2.2% annualized) in the first quarter of 2005. In current dollars, nominal GDP grew by 1.0% to reach an annualized
level of $539.4 billion.
Real economic growth in the second quarter was supported by Ontario consumer spending which grew by 0.5%. Final domestic demand
increased by 0.4% (1.7% annualized) in real terms.
Over the first eleven months of 2005, Ontario employment is up by 83,200 jobs or 1.3%, compared to the same period in 2004. The
unemployment rate was 6.1% in November, the lowest rate in more than four years.
In October 2005, the Ontario Consumer Price Index (“CPI”) inflation rate was 2.5%.
Economic Outlook: 2005 to 2008
The 2005 Ontario Economic Outlook and Fiscal Review, released on November 1, 2005, presented the forecast for the Ontario economy
for 2005 to 2008.
During the first half of 2005, the Ontario economy demonstrated considerable resilience in the face of higher oil prices and the
strong Canadian dollar. Real GDP is forecast to increase 2.2% in 2005, following a 2.7% rise in 2004. The sharp increases in oil
prices and the Canadian dollar since Hurricanes Katrina and Rita have affected the province's growth prospects for the future. Over
the medium term, Ontario's real GDP is forecast to grow by 2.6% in 2006, 3.2% in 2007 and 3.3% in 2008. Nominal GDP growth is
expected to be 4.1% in 2005, 4.5% in 2006, 4.8% in 2007 and 5.0% in 2008.
The Ontario CPI inflation rate is expected to average 2.3% in 2005. Energy prices have been the major contributor to inflation
this year. The 2006 inflation rate is projected to be 2.2%. Over the 2007 to 2008 period, inflation is projected to average 1.9%
annually. Ontario's unemployment rate is expected to trend down, declining from an estimated 6.7% in 2005 to 6.1% in 2008.
External factors have a significant bearing on the performance of the Ontario economy and deviations from their projected path can
cause the province's growth to be slower or faster. As a result, the Economic Outlook and Fiscal Review is based on assumptions about
key features of the external environment, including interest rates, oil prices, the exchange rate and the U.S. economy. According to
the Ministry of Finance's survey of financial markets (October 2005), the Canadian three-month treasury bill rate is expected to
average 2.7% in 2005, 3.5% in 2006, 4.0% in 2007 and 4.3% in 2008. The 10-year Government of Canada Bond Rate is expected to average
4.1% in 2005, 4.5% in 2006, 5.3% in 2007 and 5.7% in 2008. High oil prices are expected to persist, with crude oil projected to be
$62.00 US per barrel in January 2006, easing to $57.30 US in October 2006. The average private-sector forecast expects the Canadian
dollar to average 82.4 cents US in 2005 and 84.4 cents US in 2006. The assumptions underlying the Economic Outlook and Fiscal Review
projection is that the exchange rate will average 82.4 cents US in 2005, 85.3 cents US in 2006, 85.8 cents US in 2007 and
86.0 cents US in 2008.
The strength and composition of the U.S. expansion are key determinants of the pace of growth in Ontario. The U.S. economy is
Ontario's largest export market. Economists expect U.S. economic growth to moderate, but still remain healthy. According to the
October Blue Chip Economic Indicators survey, the U.S. economy is forecast to grow 3.5% in 2005, easing from a gain of 4.2% in 2004.
The survey calls for U.S. real GDP growth of 3.3% in 2006 and 3.2% in both 2007 and 2008.
(3) Structure of the Economy
Secondary Industries
Manufacturing. Ontario is Canada's leading manufacturing province. In 2004, Ontario's manufacturing volume of output (measured in
1997 dollars) totaled about $90.7 billion, or 50.4% of the national total. The contribution of manufacturing output to Ontario's
total GDP (measured in 1997 dollars) was 21.0%.
Manufacturing Real Gross Domestic Product
(Chained 1997 dollars)
Year ended December 31,
2000 2001 2002 2003 2004
(in millions)
Transportation Equipment...................................................... $ 20,332 $ 18,309 $ 18,781 $ 18,771 $ 20,029
Machinery, Electrical, Electronics & Computer................................. 17,447 14,014 13,600 13,528 14,048
Primary & Fabricated Metal.................................................... 12,658 12,219 12,961 13,072 13,471
Food, Beverage & Tobacco...................................................... 9,394 9,748 9,635 9,663 10,184
Chemicals, Petroleum & Coal Production........................................ 7,451 8,104 8,625 8,642 9,224
Plastics & Rubber............................................................. 5,867 5,576 6,065 6,078 6,206
Paper and Wood................................................................ 5,599 5,543 5,917 6,132 5,947
Printing...................................................................... 2,635 2,932 2,755 2,774 2,819
Non-Metallic Mineral Products................................................. 2,260 2,359 2,397 2,488 2,549
Furniture Products............................................................ 2,794 2,862 2,820 2,794 2,889
Textiles, Clothing, Leather & Allied Product.................................. 2,216 2,026 1,865 1,726 1,616
Miscellaneous Manufacturing................................................... 1,544 1,574 1,736 1,718 1,711
Manufacturing Total(1)........................................................ $ 89,873 $ 85,316 $ 87,281 $ 87,414 $ 90,749
__________
Source: Statistics Canada.
(1) Totals may not add due to rounding and chained GDP data.
Transportation equipment is Ontario's largest manufacturing industry measured by output. In 2004, output in this sector totaled
$20.0 billion, or 22.1% of total Ontario manufacturing output. Ontario accounted for 93.0% of Canadian-manufactured motor vehicles,
parts and accessories GDP, and 16.7% of North America's motor vehicle assembly. Ontario's international trade surplus in automotive
products was $18 billion in 2004. Capital investment in Ontario's transportation equipment industry totaled $3.2 billion in 2004 and
capital investment intentions for 2005, according to the latest survey from Statistics Canada, are $3.3 billion.
In 2004, 57.5% of Canada's machinery, electrical, electronic and computer products were produced in Ontario. A number of firms
with worldwide reputations in the design, manufacture and distribution of high technology products are based in the Province. Ontario
manufacturers as a whole conducted $4.5 billion worth of industrial research and development in 2002, and accounted for 59.0% of
total Canadian manufacturing industrial research and development.
Construction. Ontario's capital spending on construction includes buildings, roads and other facilities. Construction spending
intentions, according to the latest survey from Statistics Canada, indicate an expected rise of 3.7% in 2005 to $50.1 billion. The
highest increase is in business at 9.3%, followed by government and institutions at 7.5%. In 2005, capital spending intentions on
housing construction constitutes the largest share, representing 54.0% of the total.
Ontario Construction Capital Expenditure
Year ended December 31,
2000 2001 2002 2003 2004 2005(1)
(in millions)
Housing............................................................ $ 18,290 $ 20,554 $ 23,387 $ 25,233 $ 27,259 $ 27,250
Business........................................................... 10,803 10,999 11,220 11,344 11,458 12,529
Government and Institutions........................................ 6,360 7,443 8,755 9,739 9,573 10,289
Total.............................................................. $ 35,453 $ 38,996 $ 43,362 $ 46,316 $ 48,290 $ 50,068
__________
Source: Statistics Canada.
(1) 2005 intentions.
Primary Industries
Agriculture. Ontario has a large and highly diversified agricultural sector. Agricultural activity can be found in most areas of
the Province, but production is concentrated in southwestern Ontario, which is located at roughly the same latitude as Northern
California and has a climate moderated by the Great Lakes. Provincial agricultural production, based on farm cash receipts, was
valued at $7.96 billion in 2004, or 25.1% of the Canadian total. Of this, total livestock receipts were $4.35 billion, and crop
receipts were $3.61 billion.
Agricultural Production
Year ended December 31,
2000 2001 2002 2003 2004
(in millions)
Agricultural Production(1).......................................................... $ 7,450 $ 7,776 $ 7,889 $ 7,898 $ 7,960
__________
Source: Statistics Canada.
(1) Farm cash receipt; excluding government program payments.
Mining. Ontario's value of mineral production was $7,222 million in 2004. Ontario accounted for 29.9% of Canadian mineral
production in 2004, excluding oil and gas. The Province's most important minerals in terms of 2004 value of production were: nickel,
$2,133 million; gold, $1,225 million; cement, $659 million; stone, $5,623 million and sand and gravel, $457 million. Most of the
increase in Ontario's value of mineral production in 2004 was due to a substantial increase in the quantity and price of nickel
mineral.
Mineral Production
Year ended December 31,
2000 2001 2002 2003 2004
(in millions)
Mineral Production.................................................................. $ 5,711 $ 5,635 $ 5,937 $ 5,690 $ 7,222
__________
Source: Natural Resources Canada.
Forestry. Ontario has about 557,000 square kilometers of productive forestland representing 56% of Ontario's total land area.
Timber harvests from this forest base amounted to approximately 24.8 million cubic meters in 2004. This supported various wood and
paper industries in the Province whose value of shipments totaled $17.0 billion in 2004, and equaled 24.1% of the Canadian total.
__________
Energy
In 2003, the composition of Ontario's primary energy consumption was: crude oil 30.8%, natural gas and liquids 34.8%, coal 15.1%,
nuclear 6.5%, hydro-generated electricity 3.8%, biomass 2.5%, and net inflow of secondary energy 6.4%.
Total primary energy consumption in 2003 was 3,435 Petajoules, an increase of 1.1% from 3,396 Petajoules in 2002. There were small
declines in the use of crude oil and coal, and no change in the use of natural gas and natural gas liquids. Net secondary inflows
increased from 165 Petajoules to 221 Petajoules. Secondary inflows consist mainly of automotive fuels of which Ontario is a net
importer, plus adjustments such as inventory changes.
Service Sector
The service sector is the largest component of Ontario's economy, accounting for approximately 70.0% of Ontario's GDP (measured in
1997 dollars) in 2004. Ontario has a modern and diversified services sector. It includes a wide variety of industries serving
businesses, individuals and governments.
Services Producing Industries Real Gross Domestic Product
(measured in 1997 dollars)
Year ended December 31,
2000 2001 2002 2003 2004
(in millions)
Finance, Insurance and Real Estate(1).................................. $ 52,703 $ 55,999 $ 57,150 $ 58,064 $ 60,414
Wholesale and Retail Trade............................................. 46,207 47,376 49,685 51,564 53,769
Professional, Scientific & Technical Services.......................... 21,045 20,996 21,335 21,756 22,034
Information and Cultural Industries.................................... 15,959 17,289 17,753 18,082 18,164
Transportation and Warehousing......................................... 16,077 16,615 16,637 16,735 17,358
Administrative & Other Support Services................................ 9,152 9,635 10,576 11,040 11,279
Accommodation and Food Services........................................ 8,694 8,775 8,864 8,115 8,265
Arts, Entertainment and Recreation..................................... 3,562 3,774 3,834 4,010 4,018
Health Care and Social Assistance...................................... 21,476 21,699 22,233 23,127 23,715
Government Services.................................................... 19,165 19,674 20,222 21,006 21,396
Educational Services................................................... 17,006 17,069 17,409 17,554 17,853
Owner-Occupied Housing................................................. 30,473 31,305 32,247 33,413 34,297
Other Services......................................................... 8,975 9,433 9,843 9,919 10,049
Total(2)............................................................... $ 270,494 $ 279,639 $ 287,788 $ 294,385 $ 302,610
__________
Source: Statistics Canada.
(1) Excluding owner-occupied housing.
(2) Totals may not add due to rounding.
Finance, insurance and real estate are the largest component of Ontario's service sector output. In 2004, Ontario's share
accounted for 48.8% of Canada's finance, insurance and real estate output, the highest share of any province.
Ontario's sizable financial services sector is a by-product of the large number of head offices of industrial and financial
companies located in the Toronto area. The Toronto Stock Exchange (“TSX”) is Canada's premiere stock exchange with a value of trading
of $833.9 billion in 2004.
Ontario also has strong professional, scientific and technical services output, accounting for 48.6% of the Canadian total.
Wholesale and retail trade help support the spending of business and consumers, including investment and imports. Ontario accounts
for 44.2% of Canada's wholesale and retail trade output and 42.8% of Canada's information and cultural services.
(4) Labour Force
From 1999 to 2004, Ontario's labour force increased at an average annual rate of 2.4%, while Canada's increased at an average
annual rate of 2.0%. During 2004, the Ontario labour force averaged approximately 6.8 million persons. In 2004, the Ontario
participation rate of 68.5% was 0.9 percentage points higher than the Canadian rate. Reflecting the industrial structure of the
Province, 98.8% of employment was in the non-agricultural sector. The service sector, which has been a major source of employment
growth, accounted for 73.9% of Ontario's employment, while manufacturing and construction accounted for 23.4% and agriculture,
utilities and other primary industries accounted for 2.7%. In 2004, the unemployment rate averaged 6.8%, 0.4 percentage points below
the national average of 7.2%.
Labour Force
2000 2001 2002 2003 2004
The Ontario Labour Force
Labour Force (thousands)..................................................... 6,169.9 6,326.6 6,498.6 6,672.2 6,775.3
Employed (thousands)......................................................... 5,814.0 5,925.6 6,035.2 6,208.3 6,316.3
Unemployment Rate (%)........................................................ 5.8 6.3 7.1 7.0 6.8
Participation Rate((1) )(%).................................................. 67.0 67.3 67.8 68.5 68.5
The Canadian Labour Force Unemployment Rate (%)................................ 6.8 7.2 7.7 7.6 7.2
Participation Rate((1) )(%).................................................. 65.8 65.9 66.9 67.5 67.6
__________
Source: Statistics Canada.
(1) The percentage of working age population in the labour force.
Ontario Employment by Industry — 2004
Thousands % Of Total
Agriculture.................................................................................................. 79 1.2
Other Primary Industries..................................................................................... 35 0.5
Manufacturing................................................................................................ 1,109 17.6
Construction................................................................................................. 369 5.8
Utilities.................................................................................................... 58 0.9
Service Sector............................................................................................... 4,667 73.9
Total........................................................................................................ 6,316 100.0
__________
Totals may not add due to rounding.
Sources: Statistics Canada and Ontario Ministry of Finance.
(5) Social Security System
The Province provides a wide range of health care, social services and income security assistance to Ontarians. Until 1995-96, the
Province received funding for health care from the Federal Government under the Established Programs Financing (“EPF”) arrangements.
This national funding arrangement provided support for the provision of provincial health care programs as well as postsecondary
education.
The Province also provides income security assistance to individuals and families to replace earnings or provide income support.
Until 1995-96, income supplementation related to defined needs was provided, when necessary, on a cost-shared basis with the Federal
Government under the Canada Assistance Plan (“CAP”). In its 1995 budget, the Federal Government announced major cutbacks to social
transfers to the provincial and territorial governments. Beginning in 1996-97, the EPF arrangements and CAP were replaced by the
Canada Health and Social Transfer (“CHST”). Effective April 1, 2004, the CHST was split into two separate transfers: the Canada
Health Transfer (“CHT”), designated specifically for health care; and the Canada Social Transfer (“CST”) for postsecondary education
and social services. See “3. Public Finance — (3) Revenue — Federal Government Payments”.
The Federal Government also administers the Employment Insurance (“EI”) program, a national, contributory unemployment insurance
scheme, and the Canada Pension Plan (“CPP”), a national, contributory earnings-related pension system. CPP benefits include
retirement pensions, disability pensions, survivor benefits, orphans' benefits and death benefits. In 2004, Ontario residents
received about $11.9 billion in benefits from the CPP and about $4.4 billion in total benefits from EI. Both of these programs are
financed through payroll taxes paid by employers and employees. The EI Account is included in the federal budget and is administered
through a federal ministry. The CPP Account is separate from the federal budget, managed independently by the CPP Investment Board
and invested in marketable and non-marketable securities.
The Federal Government also provides universal and income-tested support for senior citizens through Old Age Security (“OAS”)
pensions, the Guaranteed Income Supplement (“GIS”) program and Spouse's Allowance. The Ontario government provides an income-tested
supplement for seniors, the Guaranteed Annual Income System (“GAINS”), which is paid to GIS recipients with low incomes. In 2004,
seniors in Ontario received a total of about $10.1 billion from these federal programs and about $98 million from GAINS.
In addition, the federal and provincial governments provide cash transfers to families raising children. The federally
administered Canada Child Tax Benefit (“CCTB”) and National Child Benefit (“NCB”) Supplement provide basic benefits to most families
with children and targeted benefits to low-income families with children. In the 2003-04 benefit year, Ontario families received
about $3.0 billion in benefits from these programs. The Ontario government provides children's benefits through the Ontario Child
Care Supplement (“OCCS”) for Working Families. The OCCS provides approximately $200 million annually in tax-free benefits to low- to
middle-income working families with young children.
The Ontario government and municipalities jointly share responsibility for providing income support to individuals and families
whose income is insufficient to meet their basic needs. In 2004-05, the Province provided about $4.7 billion through social
assistance and related programs. Twenty per cent of the expenditure in respect of financial assistance for persons with disabilities
and drug benefits for all recipients was recovered from municipalities in the same year.
(6) Government Responsibilities and Relationships
Constitutional Framework
Canada is a federation and its constitution (“Constitution”) provides for a division of responsibilities between the federal and
provincial governments. Each province and the Federal Government have supremacy within its respective sphere of assigned
responsibilities. Jurisdiction over the establishment and operation of municipalities is granted exclusively to the provinces.
The Federal Government is empowered to raise money by any mode or system of taxation. It has exclusive jurisdiction over such
matters as the regulation of trade and commerce, currency and coinage, banks and banking, national defence, foreign affairs, postal
services, railways and navigation, as well as those areas not exclusively assigned to the provinces. Each province has authority to
raise revenue through direct taxation within the province. Areas of provincial constitutional authority include health care,
education, social services, municipal institutions, property and civil rights and natural resources.
The Constitution of Canada was amended in 1982. The Constitution Act, 1982(“Constitution Act”) established a Charter of Rights and
Freedoms and a procedure for amending the Constitution. Nothing in the Constitution Act diminishes the taxing or spending authority
of the provinces.
Operational Framework
Ontario administers its constitutional responsibilities through government ministries and provincially created bodies such as
government-owned corporations (“Crown corporations”), agencies, boards, commissions, municipalities, school boards and hospital
boards. The use of these quasi-independent bodies decentralizes the administration of provincial responsibilities. However, the
Province has elected to centralize the financing of these bodies by retaining the major taxing and borrowing powers at the provincial
level. Some municipalities borrow in their own names in various capital markets (See “4. Public Debt — (3) Consolidated Debt of the
Ontario Public Sector”) as did Ontario Hydro prior to its restructuring in April 1999 (See “4. Public Debt — (2) Assets and
Liabilities, (iii) Liabilities — Ontario Electricity Industry”).
Implications for Provincial Financial Statements
The provinces have been assisted with their responsibilities in areas such as health, postsecondary education and social
assistance by transfer payment arrangements between the federal and provincial governments. Through these arrangements, the Federal
Government provides revenues to provincial governments to finance programs under provincial jurisdiction.
Federal-provincial funding arrangements create extensive financial interrelationships between the Province, the Federal Government
and provincially-created bodies. These financial interrelationships are important in understanding the revenue, expense and financing
activity of the Province. For example, in fiscal 2005-06, approximately 16% of the Province's revenue is expected to come from the
Federal Government.
Investing in provincially-created bodies has an impact on the reporting of assets. As at March 31, 2004, approximately 38.5% of
the Financial Assets of the Province could be attributed to these intermediary activities. (See “4. Public Debt — (2) Assets and
Liabilities”).
3. PUBLIC FINANCE
(1) Financial Reporting
Annually, the Province publishes its Public Accounts, which include the Annual Report and Consolidated Financial Statements for
the fiscal year ended March 31, together with ministry statements, detailed schedules of ministry expenses, financial statements of
significant provincial corporations, boards and commissions that are part of the government reporting entity and other miscellaneous
financial statements. The Auditor General examines the Public Accounts of the Province and provides an opinion on the Consolidated
Financial Statements to the Legislative Assembly. In addition, the Auditor General is required to submit an annual report to the
Legislative Assembly.
Summary of Significant Accounting Policies
Basis of Accounting
The Consolidated Financial Statements are prepared in accordance with the accounting principles for governments recommended by the
Public Sector Accounting Board (“PSAB”) of the Canadian Institute of Chartered Accountants (“CICA”) and, where applicable, the
recommendations of the Accounting Standards Board (“AcSB”) of the CICA.
Reporting Entity
These financial statements report the activities of the Consolidated Revenue Fund combined with those organizations that are
accountable for the administration of their financial affairs and resources; either to a minister of the government or directly to
the Legislature, and that are owned or controlled by the government. These government organizations are individually consolidated
provided they meet one of the following criteria: i) their revenues, expenses, assets or liabilities are greater than $50 million, or
ii) their outside sources of revenues, deficit or surplus are greater than $10 million. The activities of all other organizations are
reflected in these financial statements through the accounts of the ministries responsible for them. Trusts administered by the
government on behalf of other parties are excluded from the reporting entity.
Principles of Consolidation
Government organizations, except for government business enterprises, are consolidated on a line-by-line basis with the
Consolidated Revenue Fund in these financial statements. Where necessary, adjustments are made to present the accounts of these
organizations on a basis consistent with the accounting policies described below, and to eliminate significant inter-organization
accounts and transactions.
Government business enterprises are defined as those government organizations that i) have the financial and operating authority
to carry on a business, ii) have as their principal activity and source of revenue the selling of goods and services to individuals
and non-government organizations and iii) are able to maintain their operations and meet their obligations from revenues generated
outside the government reporting entity. The activities of government business enterprises are recorded in the financial statements
using the modified equity method. Under this method, government business enterprises are reported in accordance with the accounting
principles generally accepted for business enterprises. Their combined net assets are included in the financial statements as
Investment in Government Business Enterprises on the Consolidated Statement of Financial Position and their combined net income is
shown as a separate item on the Consolidated Statement of Operations.
Measurement Uncertainty
Uncertainty in the determination of the amount at which an item is recognized in the financial statements is known as measurement
uncertainty. Such uncertainty exists when it is reasonably possible that there could be a material variance between the recognized
amount and another reasonably possible amount.
Revenues
Revenues are recognized in the fiscal year that the events giving rise to the revenues occur and they are earned. Amounts received
or receivable prior to the end of the year, which relate to revenues that will be earned in a subsequent fiscal year, are deferred
and reported as liabilities.
Expenses
Expenses are recognized in the fiscal year that the events giving rise to the expense occur and resources are consumed. Expenses
include:
• The incurrence of liabilities for goods or services consumed,
• Transfer payments authorized and owing to recipients,
• Interest accruing on debt,
• Pension and other employee future benefits,
• The amortization of tangible capital assets, and
• Losses in the value of assets.
Transfer payments are recognized in the year during which the payment is authorized, all eligibility criteria are met and a
reasonable estimate of the amount can be made.
Interest on Debt includes the following: i) interest on outstanding debt net of interest income on investments and loans;
ii) amortization of foreign exchange gains or losses; iii) amortization of debt discounts, premiums and commissions; and
iv) amortization of deferred hedging gains and losses.
Employee future benefits such as pensions, other retirement benefits and entitlements upon termination are recognized as expenses
over the years in which the benefits are earned by employees. These expenses are the government's share of the cost of benefits
including the current year's cost of benefits, interest on the net benefits liability or surplus, amortization of actuarial gains or
losses, cost of or gain on plan amendment and other adjustments.
Other employee future benefits are either recognized in the period the event that obligates the government occurs or when the
benefits are earned and accumulated by employees.
The costs of buildings and transportation infrastructure owned by the Province are amortized and recognized as expenses over their
estimated useful lives on a straight-line basis. Amortization of tangible capital assets owned by government organizations
consolidated in these financial statements is also included in expenses.
The Province is phasing in the implementation of PSAB recommendations on tangible capital assets. Consequently, the costs of
acquisition of other tangible capital assets owned by the Province, such as furniture and vehicles, are recorded as expenses. Also,
for significant capital leases entered into by the Province, an amount equal to the present value of the minimum lease payments
required over the term of the lease is recorded as an expense at the inception of the lease, with an offsetting liability recorded
for the lease obligation.
Liabilities
Liabilities are recorded to the extent that they represent present obligations of the government to outside parties as a result of
events and transactions occurring prior to the end of the fiscal year. The settlement of liabilities will result in sacrifice of
economic benefits in the future.
Liabilities include probable losses on loan guarantees issued by the government, and contingencies when it is likely that a loss
will be realized and the amount can be reasonably determined.
Liabilities also include obligations to government business enterprises.
Debt
Debt is comprised of treasury bills, commercial paper, medium and long-term notes, savings bonds, debentures and loans.
Debt denominated in foreign currencies that has been hedged is recorded at the Canadian dollar equivalent using the rates of
exchange established by the terms of the hedge agreements. Other foreign currency debt, liabilities and assets are translated to
Canadian dollars at year-end rates of exchange and any exchange gains or losses are amortized over the remaining term to maturity.
The Province uses derivative financial instruments (“derivatives”) for the purposes of minimizing interest costs and to manage
risk. The Province does not use derivatives for speculative purposes. Derivatives are financial contracts, the value of which is
derived from underlying instruments. Gains or losses arising from derivative transactions are deferred and amortized over the
remaining life of the related debt issue.
Pensions and Other Employee Future Benefits
The liabilities for pensions and other employee future benefits are calculated on an actuarial basis using the government's best
estimates of future inflation rates, investment returns, employee salary levels and other underlying assumptions, and where
applicable, the government's borrowing rate. When actual plan experience of pensions, other retirement benefits and termination pay
differs from that expected, or when assumptions are revised, actuarial gains and losses arise. These gains and losses are amortized
over the expected average remaining service life of plan members.
The liabilities for selected Employee Future Benefits (such as pensions, other retirement benefits and termination pay) represent
the government's share of the actuarial present values of benefits attributed to services rendered by employees and former employees,
less its share of the assets of the plans. In addition, the liability includes the Province's share of the unamortized balance of
actuarial gains or losses, and other adjustments primarily for differences between the fiscal year-ends of the pension plans and the
Province.
Assets
Assets are resources controlled by the government from which it will derive future benefits. Assets are recognized in the year the
events giving rise to the government's control of the benefit occur.
Financial Assets
Financial assets are resources that can be used to discharge existing liabilities or finance future operations. They include cash,
temporary investments, accounts receivable, loans receivable, advances, and investments in government business enterprises.
Temporary investments are recorded at the lower of cost or fair value.
Accounts receivables are recorded at cost. Valuation allowances are made when collectibility is considered doubtful.
Loans receivable with significant concessionary terms are considered in part as grants and are recorded on the date of issuance at
face value discounted by the amount of the grant portion. The grant portion is recognized as an expense at the date of issuance of
the loan. The amount of the loan discount is amortized to revenue over the term of the loan. Loans receivable include amounts owing
from government business enterprises.
Investment in Government Business Enterprises represents the net assets of government business enterprises recorded on the
modified equity basis as described under Principles of Consolidation.
Tangible Capital Assets
Tangible capital assets are non-financial assets. Non-financial assets are resources which will be consumed in the normal course
of operations or in the delivery of government services.
Tangible capital assets are recorded at historical cost. Historical cost includes the costs directly related to the acquisition,
design, construction, development, improvement or betterment of tangible capital assets. Cost includes overheads directly
attributable to construction and development but excludes interest. Estimated historical cost was used to record existing tangible
capital assets if actual cost was unknown when the Province first implemented tangible capital assets accounting.
As the Province is phasing in the implementation of PSAB recommendations on tangible capital assets, the following categories are
included under tangible capital assets and recorded at historical cost: land, buildings and transportation infrastructure owned by
the Province; and all tangible capital assets owned by government organizations that are consolidated in these financial statements.
Maintenance and repair costs are recognized as an expense when incurred. Betterments or improvements that significantly increase
or prolong the service life or capacity of a tangible capital asset are capitalized.
Trust Funds
Trust funds that have been deposited into the Consolidated Revenue Fund are included in Other Liabilities on the Consolidated
Statement of Financial Position.
The Budget
Traditionally, a Budget is tabled each year by the Ontario Minister of Finance in the Legislative Assembly, setting out the
expense and revenue forecast for activities to be undertaken for Provincial purposes. In addition, a publication entitled “Ontario
Finances” provides a quarterly update to reflect in-year developments, budget performance and policy actions and the “Ontario
Economic Outlook and Fiscal Review” traditionally provides a more comprehensive update of second quarter numbers.
(2) Fiscal Position
The following table provides an overview of the Province's revenue, expense and annual surplus (deficit) for each of the fiscal
years in the five-year period ending March 31, 2005 plus the current outlook for 2005-06 as presented in the 2005 Ontario Budget and
updated in the 2005 Ontario Economic Outlook and Fiscal Review. The difference between revenue and expense is the annual “surplus” or
annual “deficit” with adjustments for the reserve.
Ontario's Fiscal Position
Current Rate of Growth
Actual Outlook(1) 2004-05 to
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2005-06
(%)
(in millions)
Revenue
Taxation Revenue.................................. $ 49,476 $ 48,025 $ 49,551 $ 49,148 $ 55,975 $ 58,171 3.9
Government of Canada............................ 6,129 7,754 8,894 9,893 11,882 13,173 10.9
Income from Investment In Government
Business Enterprises.......................... 3,855 3,345 3,942 3,070 3,578 4,019 12.3
Other Revenue................................... 6,834 7,410 6,504 6,289 6,406 6,769 5.7
Total Revenue..................................... 66,294 66,534 68,891 68,400 77,841 82,132 5.5
Expense
Programs........................................ 51,396 53,932 57,204 62,104 67,009 71,257 6.3
Capital(2)...................................... 2,123 1,890 1,876 2,175 3,019 2,673 (11.5)
Interest on Debt................................ 10,873 10,337 9,694 9,604 9,368 9,571 2.2
Total Expense..................................... 64,392 66,159 68,774 73,883 79,396 83,501 5.2
Surplus/(Deficit) Before Reserve.................. 1,902 375 117 (5,483) (1,555) (1,369) (12.0)
Reserve........................................... — — — — — 1,000 —
Surplus/(Deficit)................................. $ 1,902 $ 375 $ 117 $ (5,483) $ (1,555)$ (2,369) 52.3
__________
Source: Ontario Ministry of Finance.
(1) Current Outlook 2005-06 refers to the information presented in the 2005 Ontario Budget and updated in the 2005 Ontario Economic
Outlook and Fiscal Review.
(2) Starting in 2002-03, major tangible capital assets owned by Provincial ministries (land, buildings and transportation
infrastructure) are accounted for on a full accrual accounting basis. Other tangible capital assets owned by Provincial
ministries will continue to be accounted for as expense in the year of acquisition or construction. All capital assets owned by
consolidated government organizations are accounted for on a full accrual basis.
Fiscal Outlook 2005-06
Ontario is currently projecting a deficit of $2,369 million for 2005-06. This represents an in-year improvement of $427 million
from the deficit target set out in the 2005 Ontario Budget of $2.8 billion. The 2005-06 fiscal outlook includes a $1.0 billion
reserve which is designed to protect the fiscal plan against unexpected and adverse changes in the economic and fiscal outlook. If
the reserve is not required this year, the deficit is projected to be $1.4 billion.
The 2004-05 actual and 2005-06 current outlook presented below are extracts from material presented in the 2005 Ontario Budget and
updated in the 2005 Ontario Economic Outlook and Fiscal Review.
Fiscal Summary
Current
Outlook
2004-05 2005-06(1)
(in billions)
Revenue......................................................................................................... $ 77.8 $ 82.1
Expense
Programs...................................................................................................... 67.0 71.3
Capital....................................................................................................... 3.0 2.7
Interest on Debt.............................................................................................. 9.4 9.6
Total Expense................................................................................................... 79.4 83.5
Surplus/(Deficit) Before Reserve................................................................................ (1.6) (1.4)
Reserve......................................................................................................... — 1.0
Surplus/(Deficit)............................................................................................... $ (1.6) $ (2.4)
__________
Source: Ontario Ministry of Finance.
(1) Current Outlook 2005-06 refers to the information presented in the 2005 Ontario Budget and updated in the 2005 Ontario Economic
Outlook and Fiscal Review.
Revenues
Total revenue is projected at $82,132 million in 2005-06, up $4,291 million or 5.5% from the estimate for 2004-05. About half of
the increase, or $2,196 million, is due to higher taxation revenues driven by economic growth and maturing impacts of past measures,
most significantly the Ontario Health Premium (“OHP”). $1,291 million of the revenue increase is due to higher federal transfer
payments. The remaining $805 million increase largely arises from revenues related to the electricity sector.
Personal Income Tax (“PIT”) revenue in 2005-06 is projected to increase by $931 million, or 4.8% in 2005-06. This increase
reflects the growth in employment (1.2%) and personal income (4.1%) forecast for the Ontario economy in 2005.
Retail Sales Tax (“RST”) revenue is expected to increase by $620 million or 4.2% in 2005-06. Retail Sales Tax growth is lower than
2005 retail sales growth of 5.0 per cent largely due to gasoline pump purchases, that are not subject to RST, being included in
Retail Sales.
Corporations Tax (“CT”) revenue in 2005-06 is expected to be $395 million or 4.0% lower in 2005-06. This decrease is mostly
because of one-time revenues included in 2004-05 and cautious growth projections in 2005-06. Excluding the one-time revenues and
impact of revenue measures, 2005-06 CT revenues would be projected to fall by only 0.3 per cent, which reflects the cautious approach
adopted for the revenue outlook presented in the 2005 Ontario Economic Outlook and Fiscal Review due to the historic volatility of
corporate profits and corporate tax revenues. The one-time revenues included in 2004-05 consist of a $410 million positive adjustment
corresponding to the under-estimation of revenues in the 2003-04 Public Accounts.
Ontario Heath Premium revenue is expected to increase $685 million or 39.4% to $2.4 billion in 2005-06. This is due to the program
being in place for the entire 2005-06 fiscal year, whereas it was only in effect for three quarters of 2004-05.
Revenue from all other taxation revenue sources combined is expected to rise by $355 million, or 3.5%. The largest contribution to
the change comes from an increase in Electricity Payments-in-Lieu of Taxes.
Federal payments are expected to rise by $1,291 million or 10.9% in 2005-06. This increase is mainly due to increased health and
social transfers. This projection incorporates the additional revenues provided under the 2004 First Ministers' health care agreement.
Income from Investment in Government Business Enterprises is expected to rise by $442 million in 2005-06, or 12.3%. This increase
is due mainly to an increase in projected net income from Ontario Power Generation (“OPG”) arising from the Government's electricity
reforms under the Electricity Restructuring Act, 2004, including fair and stable prices for electricity provided by OPG.
Other Non-Tax Revenue is expected to rise by $363 million, or 5.7% in 2005-06. This is due primarily to an increase in revenues
from power sales as a result of the full cost of power purchase agreements being passed through to consumers starting on January 1,
2005. Other factors include higher reimbursements from municipalities related to provincial expenditures on social services and an
increase in the draw-down of the power purchase contract liability related to revised accounting treatment with respect to the
elimination of the liability as of January 1, 2005.
Expense
Total expense in 2005-06 is projected at $83,501 million, an increase of $4,105 million from the 2004-05 Actual level of
$79,396 million. This increase in expense is primarily due to higher levels of spending on health care, education, postsecondary
education and social services as well as higher retirement benefits expense and interest-on-debt expense.
While the Province supports a wide range of services to the public, funding for health care and education accounts for the largest
share of spending. In 2005-06, total health care spending of $33.3 billion is expected to account for 40% of total Provincial
spending. Education and Training, which includes Provincial spending in support of school boards and Provincial grants for colleges,
universities and training totals $16.5 billion (including Teachers' Pension Plan) or 20% of total Provincial spending. Funding for
the Children and Social Services sector represents $9.9 billion, or 12% of total Provincial spending.
(3) Revenue
Overview
The following table sets forth historical revenue information for each of the fiscal years in the five-year period ended March 31,
2005 and 2005-06 forecast information presented in the 2005 Ontario Budget and updated in the 2005 Ontario Economic Outlook and
Fiscal Review.
Total revenue in fiscal 2005-06 is projected to be $82,132 million. Tax revenue is projected at $58,171 million or 70.8% of total
revenue. Federal transfers, at $13,173 million, are 16.0% of total revenue. Income from Investment in Government Business Enterprises
is projected to be $4,019 million, 4.9% of total revenue. All Other Non-Tax Revenues are projected to be $6,769 million, 8.2% of
total revenue.
Ontario's Revenue
Current % of Total
Outlook Revenue
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06* 2005-06
(in millions)
Taxation Revenue
Personal Income Tax................................... $ 17,911 $ 19,097 $ 18,195 $ 18,301 $ 19,320 $ 20,251 24.7
Retail Sales Tax...................................... 13,735 13,803 14,183 14,258 14,855 15,475 18.8
Corporations Tax...................................... 9,200 6,646 7,459 6,658 9,883 9,488 11.6
Employer Health Tax................................... 3,424 3,502 3,589 3,753 3,886 4,033 4.9
Ontario Health Premium................................ — — — — 1,737 2,422 2.9
Gasoline & Fuel Taxes................................. 2,820 2,851 2,988 2,945 3,004 3,021 3.7
Tobacco Tax........................................... 504 703 1,183 1,350 1,453 1,511 1.8
Land Transfer Tax..................................... 642 665 814 909 1,043 1,056 1.3
Electricity
Payments-In-Lieu of Taxes............................. 907 387 711 627 511 656 0.8
Other Taxation........................................ 333 371 429 347 283 258 0.3
49,476 48,025 49,551 49,148 55,975 58,171 70.8
Income from Investment In Government Business
Enterprises........................................... 3,855 3,345 3,942 3,070 3,578 4,019 4.9
Other Revenue
Reimbursements........................................ 1,809 1,592 1,111 1,206 1,241 1,319 1.6
Electricity Debt Retirement Charge.................... — — 889 1,000 997 1,018 1.2
Vehicle and Driver Registration Fees.................. 929 941 982 985 976 1,017 1.2
Power Sales........................................... 695 815 635 510 610 961 1.2
Other Fees and Licences............................... 503 474 606 594 506 510 0.6
Liquor Licence Revenue................................ 525 530 530 488 489 502 0.6
Net Reduction of Power Purchase Contract Liability.... — — 161 104 236 396 0.5
Sales and Rentals..................................... 637 344 560 532 352 369 0.4
Royalties............................................. 235 224 304 248 278 236 0.3
Miscellaneous Other Non-Tax Revenue................... 1,501 2,490 726 622 721 441 0.5
6,834 7,410 6,504 6,289 6,406 6,769 8.2
Government of Canada**
Canada Health and Social Transfer (CHST).............. 4,138 5,831 7,346 7,345 — — —
Canada Health Transfer (CHT).......................... — — — — 5,640 7,127 8.7
Canada Social Transfer (CST)***....................... — — — — 2,912 3,311 4.0
CHST Supplements...................................... 757 380 191 577 775 584 0.7
Other Federal Payments................................ 1,234 1,543 1,357 1,971 2,555 2,151 2.6
6,129 7,754 8,894 9,893 11,882 13,173 16.0
Total Revenue........................................... $ 66,294 $ 66,534 $ 68,891 $ 68,400 $ 77,841 $ 82,132 100.0
__________
Source: Ontario Ministry of Finance.
Totals may not add due to rounding.
* Second-quarter fiscal forecast as at September 30, 2005.
** Health Reform Fund included in CHST in 2003-04 and CHT in 2004-05.
*** Includes 2005 Federal Budget additional Early Learning and Child Care revenues of $272 million in 2005-06.
Taxation
The Constitution provides for a division of taxation authority between the federal and provincial governments. Local governments
derive their taxing powers from the Province. In accordance with its policy of centralized financing, the Province has delegated its
taxing powers respecting real property taxes to local governments.
Personal Income Tax. Ontario and the Federal Government impose a personal income tax (“PIT”) on individuals resident in Ontario.
This tax is the Province's largest single source of revenue.
Ontario basic PIT is calculated as a percentage of taxable income. It is collected by the Federal Government on Ontario's behalf.
The tax rates for 2005 are as follows: 6.05% of the first $34,010 of taxable income plus 9.15% of the portion of taxable income
between $34,010 and $68,020, plus 11.16% of the portion of taxable income over $68,020. Ontario non-refundable tax credits are
provided to recognize individual and family circumstances (e.g., basic amount, spouse, medical expenses), at the rate of 6.05% in
2005 (and 11.16% for charitable donations in excess of $200), before calculating the provincial surtax or Ontario Tax Reduction.
Ontario also applies a surtax on taxpayers with higher incomes. For the 2005 taxation year, the surtax is equal to 20% of basic
Ontario PIT in excess of $3,929, plus an additional 36% of basic Ontario PIT in excess of $4,957. For taxpayers with low or moderate
incomes, the Ontario Tax Reduction reduces or eliminates Ontario PIT.
The Ontario Health Premium (“OHP”) is payable by individuals resident in Ontario on the last day of their taxation year and is
based on taxable income. There are five OHP levels, with phase-in rates between levels. No one with taxable income of $20,000 or less
pays the OHP. For 2005, the initial OHP level of $300 is phased in at the rate of 6% of taxable income in excess of $20,000, reaching
the full amount at a taxable income of $25,000. The increase to the second OHP level of $450 is phased in at a rate of 6% of taxable
income from $36,000 to $38,500. Each subsequent increase to the next OHP level is phased in at the rate of 25% over the first $600 of
taxable income in the range. The maximum annual OHP amount of $900 is reached at a taxable income of $200,600. For 2004, the OHP
amounts are one-half the amounts for 2005.
Retail Sales Tax. Ontario applies an 8% retail sales tax on the purchase of most tangible personal property and certain services.
For admission fees to a place of amusement that exceed $4.00 and alcoholic beverages sold at licensed establishments the rate is 10%.
Alcoholic beverages sold through retail outlets are taxed at 12%. On transient accommodation, the rate is 5%. Insurance premiums are
generally taxed at 8%; however, individual life and health insurance premiums are exempt. The sales tax on motor vehicle insurance
premiums and on repairs and replacements made under warranty was eliminated as of April 1, 2004. There are exemptions from retail
sales tax, including those for basic groceries, prescription drugs, energy, children's clothing, farm equipment, farm building
materials and production machinery and equipment.
Under the Retail Sales Tax Act, the Tax for Fuel Conservation is applied to the purchase or lease of a new passenger vehicle or
sport utility vehicle and is based on the highway fuel efficiency rating of the vehicle. Light trucks, buses and vans are not subject
to this tax. The tax applies to all passenger vehicles with a highway fuel efficiency rating of 6.0 or more litres of gasoline or
diesel fuel per 100 kilometres and all sport utility vehicles with a highway fuel efficiency rating of 8.0 or more litres of gasoline
or diesel fuel per 100 kilometres, and increases as fuel efficiency of the vehicle declines. A $100 tax credit is given to the
purchaser of a new passenger car with a highway fuel consumption rating of less than 6.0 litres of gasoline or diesel fuel per
100 kilometres.
Corporate Income Tax. The Province taxes corporate income allocated to Ontario. The current government increased the general
corporate income tax rate to 14% from 12.5% and the M&P tax rate to 12% from 11%. These changes were effective January 1, 2004. The
M&P tax rate is the tax rate on income from manufacturing and processing, mining, logging, fishing and farming.
The tax rate for small businesses has been in effect since January 1, 2003 and continues to be 5.5%. The income threshold for this
special rate was increased to $400,000 from $320,000 effective January 1, 2004.
Ontario provides assistance for scientific research and experimental development (“SR&ED”) activities through: (1) a 10%
refundable innovation tax credit for qualified SR&ED expenses; (2) a full deduction for qualified expenses in the year they are
incurred; (3) a 20% refundable tax credit for SR&ED done through specified research institutions; and (4) a tax exemption for the
federal SR&ED investment tax credit that relates to SR&ED incurred in Ontario.
Ontario provides a number of refundable tax credits on labour expenses for certain other corporate activities carried out in
Ontario: a 25% to 30% apprenticeship tax credit for hiring qualifying apprentices (effective May 19, 2004), a 10% to 15% co-operative
education tax credit for hiring qualifying co-op students; a 30% book publishing tax credit; a 10% to 15% graduate transition tax
credit for hiring recently unemployed postsecondary graduates before July 6, 2004; a 20% computer animation and special effects tax
credit; a 20% tax credit for producing Canadian film and television productions (30% for first-time producers), with an additional
10% bonus for qualifying regional productions; an 11% film and television production services tax credit for non-Canadian
productions, with an additional 3% bonus for qualifying regional productions; a 20% interactive digital media tax credit; and a 20%
sound recording tax credit.
On December 21, 2004, Ontario announced proposed enhancements to the film and television tax credits. The tax credit rate for
Canadian film and television productions would increase from 20% to 30% for labour expenditures incurred after December 31, 2004 and
before January 1, 2010. The 10% regional bonus would continue and first-time producers would be eligible for an enhanced rate of 40%.
Also, the tax credit rate for non-Canadian film and television productions would increase from 11% to 18% for labour expenditures
incurred after December 31, 2004 and before April 1, 2006. The 3% regional bonus would be eliminated.
Ontario also provides additional deductions from income equal to 30% of the capital cost of pollution control equipment, eligible
expenditures related to childcare facilities made before January 1, 2005 and new school buses purchased before January 1, 2006 and
100% of the costs of accommodating newly hired employees with disabilities incurred before January 1, 2005. An additional 15%
deduction is provided for donations or price discounts made before January 1, 2005 to Ontario post secondary educational institutions
in respect of new teaching equipment and learning technologies.
Corporations or a group of associated corporations with total assets over $5 million or gross revenues over $10 million are
subject to a corporate minimum tax (“CMT”). The CMT is applied at a rate of 4% on accounting income less certain deductions, such as
dividend income. The CMT is reduced by regular corporate income tax payable in the year.
Insurance Premiums Tax. Insurance companies pay a 2% tax on net premiums in respect of accident, sickness and life insurance for
persons resident in Ontario. A 3% tax is levied on net premiums in respect of property and any other contract of insurance in
Ontario. Contracts in respect of property insurance also bear an additional 0.5% tax on net premiums. A 2% premiums tax is also
payable by employers in respect of uninsured benefit arrangements.
Life insurance companies are subject to a special additional tax of 1.25% on taxable paid-up capital in Ontario. The first
$10 million in paid-up capital is exempt from tax. This tax is reduced by regular income tax and any corporate minimum tax payable in
the year.
Capital Tax. The Province levies a capital tax on paid-up capital allocated to Ontario. Insurance companies do not pay this tax.
The general capital tax rate is 0.3%. Deposit taking financial institutions are subject to a capital tax of 0.6% on the first
$400 million of taxable capital and 0.9% on taxable capital in excess of $400 million. Non-deposit taking financial institutions are
subject to a capital tax of 0.6% on the first $400 million of taxable capital and 0.72% on taxable capital in excess of $400 million.
Ontario credit unions, Caisses Populaires and family farm/fishing corporations are exempt from capital tax. Regular corporations and
financial institutions are entitled to a $7.5 million deduction from taxable capital.
The 2004 Ontario Budget announced a plan to gradually eliminate the capital tax by 2012. Starting January 1, 2005, the $5 million
deduction from taxable capital will be increased by $2.5 million each year until the deduction reaches $15 million on January 1,
2008. Starting January 1, 2009, capital tax rates will be reduced each year until the capital tax is fully eliminated on January 1,
2012.
A capital tax credit is available to financial institutions that make eligible capital investments in or provide low interest rate
loans to Ontario small businesses.
Mining Tax. The Mining Tax Act levies a tax on profits from the extraction of minerals in Ontario. The tax is levied on the
operator's profit in excess of $500,000. Effective January 1, 2004, the mining tax rate is 10%. There is a three-year or $10 million
profit exemption available to new or expanded mines. To assist mines in remote areas of the Province, the three-year exemption is
extended to ten years for new remote mines. As well, the profits from remote mines are taxed at a rate of 5% after the 10-year or
$10 million profit exemption.
Employer Health Tax. Ontario levies a payroll tax on Ontario remuneration. Employers with total annual Ontario remuneration of
$200,000 or less calculate tax payable at a rate of 0.98%; employers with total annual Ontario remuneration between $200,000 and
$400,000 calculate this tax at graduated rates between 0.98% and 1.95%; and employers with total annual Ontario remuneration in
excess of $400,000 calculate tax at a rate of 1.95%. A tax exemption is provided for the first $400,000 of total annual Ontario
remuneration of private-sector employers.
Land Transfer Tax. Ontario levies a land transfer tax on the value of consideration of most registered conveyances and
unregistered dispositions of beneficial interest in land in Ontario. The land transfer tax applies at graduated rates ranging from
0.5% on the value of consideration of $55,000 or less, 1.0% on the value of consideration between $55,000 and $250,000 and 1.5% on
the value of consideration exceeding $250,000. Where the value of consideration exceeds $400,000 and the property contains one or two
single-family residences, there is an additional 0.5% (in addition to the 1.5%) tax levied on the amount exceeding $400,000. As part
of the 2000 Budget, the land transfer tax refund program for first-time buyers of newly constructed homes was made permanent.
Eligible purchasers are entitled to a refund of up to $2,000 under the program.
Other Significant Taxes. Taxes are applied to the purchases of gasoline (Gasoline Tax Act) and use of diesel fuel ( Fuel Tax Act).
The taxes apply to gasoline and diesel fuel used in on-road motor vehicles and certain off-road uses (i.e. recreational boats,
snowmobiles, lawn mowers). Under the Gasoline Tax Act, the tax rate for gasoline is 14.7 cents per litre; 4.3 cents per litre for
propane; and 2.7 cents per litre for fuel used to power aircraft. Under the Fuel Tax Act, the tax rate for diesel fuel is 14.3 cents
per litre and 4.5 cents per litre for diesel fuel used to power railroad locomotives.
Tobacco Tax. Since January 19, 2005, Ontario's tobacco tax rate is 11.725 cents per cigarette or per gram or part gram of cut
tobacco. The tax on cigars is 56.6% of the retail price.
Race Tracks Tax. Ontario also levies a racetracks tax on wagers on horse races at 0.5% on all bets.
Federal Government Payments
Approximately 16.0% of the Province's revenue in fiscal 2005-06, or $13,173 million, will be received through cash payments from
the Federal Government. These payments increased by $1,291 million, from $11,882 million in 2004-05. Federal payments are intended to
assist the Province in providing necessary services in areas of provincial jurisdiction.
Canada Health Transfer (“CHT”) and Canada Social Transfer (“CST”). The largest cash transfers from the Federal Government, in the
form of CHT and CST payments, are to assist the Province in providing health care, postsecondary education and other social programs.
In fiscal year 2004-05, CHT and CST payments to Ontario were $9,327 million, including $5,058 million in CHT, $2,912 million in CST,
$582 million from the Health Reform Fund and $775 million in CHST Supplements. In 2005-06, CHT and CST payments to Ontario are
expected to total $11,022 million, including $7,127 million in CHT, $3,311 million in CST, and $584 million in CHST Supplements.
Included in the CST is a payment of $272 million for early learning and child care.
The CHT and CST were created April 1, 2004, when the Government of Canada split the Canada Health and Social Transfer (“CHST”)
into two separate transfers: the CHT, designated specifically for health care, and the CST for postsecondary education and social
programs. The CHST was a block fund contribution by the Federal Government in respect of social programs under the Federal-Provincial
Fiscal Arrangements Act. It replaced both the Established Programs Financing (“EPF”) and Canada Assistance Plan (“CAP”) in 1996-97.
To receive the CHST cash contribution, provinces must comply with the Canada Health Act and may not impose a residency requirement in
determining eligibility for social assistance.
CHT and CST total entitlements include both cash and tax entitlements. CHT and CST tax entitlements are the value of 13.5 of each
province's personal income tax (“PIT”) points and one corporate income tax (“CIT”) point transferred to provinces in 1977-78 under
the EPF arrangements.
As of 1998-99, CHST cash entitlements, $12.5 billion nationwide, had been reduced by $6.2 billion, or 33%, from combined CAP and
EPF cash entitlements in 1994-95. The 1999 Federal Budget announced that by 2002-03, there would be a nationwide restoration of
$2.5 billion of the $6.2 billion cut previously by the Federal Government from CHST cash entitlements.
CHST Supplements. The 1999 Federal Budget also established a one-time CHST Supplement Trust for Health Care of $3.5 billion. It
was allocated among provinces on an equal per capita basis. Ontario's share, $1,323 million, was withdrawn from the Trust and was
spent by the Province on health care over three years, 1999-00, 2000-01 and 2001-02.
The 2000 Federal Budget announced another CHST Supplement Trust of $2.5 billion, which also was allocated among provinces on an
equal per capita basis. Ontario's share, $952 million, was withdrawn from the Trust and was spent on health care between 2000-01 and
2003-04.
2003 First Ministers' Meeting. At the February 2003 First Ministers' Meeting (“FMM”), the federal government announced a
$2.5 billion CHST Health Supplement, which was allocated on a per capita basis. Ontario will record its share, $967 million, over
three years: $386 million in 2003-04, $387 million in 2004-05, and $194 million in 2005-06, according to the federal draw down
schedule.
Only the portions of the CHST Supplements that were expensed have been reported as revenue in Ontario budgets, including
$755 million in 1999-00, $758 million in 2000-01, $380 million in 2001-02, $191 million in 2002-03 and $577 million in 2003-04. The
CHST Supplements reported as revenue in 2004-05, $775 million, includes $387 million from the 2003-04 CHST Supplement and
$388 million from the 2004-05 CHST Supplement.
At the same First Ministers' Meeting, a one-time $2 billion CHST “Top-Up” was created, which the federal government was expected
to make available in 2003-04. The $2 billion CHST top-up was provided at the January 2004 First Ministers Meeting. Ontario's annual
allocation is $388 million in 2004-05, and will be $390 million in 2005-06.
2004 First Ministers' Health Care Agreement. At the September 2004 FMM, the Prime Minister and Premiers agreed on a funding
framework that would provide $18 billion of funding for health care over six years. In 2005-06, Ontario will receive a $972 million
CHT base increase and $243 million from the Wait Times Reduction Fund.
Other Federal Payments. In 2004-05, the Province received $2,555 million from the Federal Government for programs other than the
CHT, CST, CHST Supplements and the Health Reform Fund.
In 2005-06, Ontario expects to receive a total of $2,151 million through other federal programs other than the CHT, CST and CHST
Supplements, including $520 million for social housing, $194 million for medical equipment, $293 million for infrastructure,
$243 million from the Wait Times Reduction Fund and $901 million in other federal transfers.
Fiscal Stabilization. An integral part of federal-provincial fiscal relations is the Federal Government's obligation to protect
provincial revenues. The Federal Government makes cash payments to any province if its revenue falls short of the previous year's
total by 5% or more due to a downturn in economic activity. The most recent payment to Ontario under this program was received in
1995-96 in respect of claims made up to and including the 1992-93 fiscal year.
Federal Payments to Ontario
Outlook
2004-05 2005-06
(in millions)
Canada Health Transfer (“CHT”)................................................................................ $ 5,640 $ 7,127
Canada Social Transfer (“CST”)................................................................................ 2,912 3,311
Canada Health and Social Transfer (CHST) Supplements.......................................................... 775 584
Medical Equipment Fund........................................................................................ 387 194
Social Housing................................................................................................ 522 520
Infrastructure................................................................................................ 209 293
Wait Times Reduction Fund..................................................................................... 242 243
Other......................................................................................................... 1,195 901
Total Federal Payments........................................................................................ $ 11,882 $ 13,173
Other Revenue
In 2005-06, approximately 13.2% of revenue is expected from sources other than taxation or federal transfers. This category
includes the net income of provincially owned Liquor Control Board of Ontario and Ontario Lottery and Gaming Corporation. Also
included is revenue from Vehicle and Driver Registration Fees and Sales and Rentals.
(4) Expense
Overview
The following table sets forth historical expense information for the fiscal year 2000-01. The table has not been updated to
reflect the new ministry structure.
Ontario's Operating Expense
Ministry 2000-01
(in
millions)
Agriculture and Food†.................................................................................................. 635
Attorney General....................................................................................................... 969
Board of Internal Economy.............................................................................................. 116
Children and Youth Services............................................................................................ 2,070
Citizenship and Immigration†........................................................................................... 66
Community and Social Services†......................................................................................... 5,800
Community Safety and Correctional Services†............................................................................ 1,419
Consumer and Business Services......................................................................................... 155
Culture................................................................................................................ 236
Economic Development and Trade†........................................................................................ 200
Education†............................................................................................................. 7,963
Teachers' Pension Plan (TPP)......................................................................................... (402)
Energy................................................................................................................. 344
Environment............................................................................................................ 190
Executive Offices...................................................................................................... 21
Finance — Own Account†................................................................................................. 1,147
Interest on Debt..................................................................................................... 10,873
Community Reinvestment Fund.......................................................................................... 561
Power Purchases...................................................................................................... 695
Health and Long-Term Care†............................................................................................. 22,701
Intergovernmental Affairs.............................................................................................. 6
Labour................................................................................................................. 104
Management Board Secretariat†.......................................................................................... 144
Retirement Benefits.................................................................................................. (33)
Municipal Affairs and Housing†......................................................................................... 1,792
Native Affairs Secretariat†............................................................................................ 17
Natural Resources...................................................................................................... 417
Northern Development and Mines......................................................................................... 69
Office of Francophone Affairs.......................................................................................... 4
Public Infrastructure Renewal.......................................................................................... 9
Tourism and Recreation................................................................................................. 124
Training, Colleges and Universities†................................................................................... 3,264
Transportation†........................................................................................................ 593
Total Operating Expense†............................................................................................... 62,269
__________
Source: Ontario Ministry of Finance.
† 2000-01 has been restated to reflect the reclassification of adjustments related to recovery of prior years' expenses from
expense to revenue consistent with the 2003-2004 Public Accounts of Ontario. This change has no impact on the Surplus/Deficit.
Starting with the 2005 Ontario Economic Outlook and Fiscal Review, 2004-05 program expense figures for the Province of Ontario
were restated to reflect the new government ministry structures. Accordingly, the 2001-02 to 2004-05 program expense figures
contained within the Financial Tables were restated to reflect the new government ministry structures, and the following table sets
forth such restated figures. The historical expense figures for the fiscal year 2000-01 are not readily available and therefore were
not restated. The following table provides an overview of the Province's expense information for each of the fiscal years from
2001-02 to 2005-06.
Ontario's Operating Expense
% of Total
Current Operating
Actual Outlook* Expense
Ministry 2001-02 2002-03 2003-04 2004-05 2005-06 2005-06
(in millions)
Agriculture, Food and Rural Affairs**..................................... 456 598 703 699 605 0.7
One-Time and Extraordinary Assistance................................... 319 18 — 458† — —
Attorney General.......................................................... 995 1,052 1,199 1,175 1,199 1.5
Board of Internal Economy................................................. 124 146 196 145 167 0.2
Children and Youth Services............................................... 2,244 2,431 2,640 2,831 3,196 4.0
Citizenship and Immigration**............................................. 61 55 55 65 76 0.1
Community and Social Services**........................................... 5,812 5,846 5,999 6,372 6,603 8.2
Community Safety and Correctional Services................................ 1,513 1,656 1,666 1,718 1,753 2.2
Culture................................................................... 279 331 303 280 275 0.3
Democratic Renewal Secretariat............................................ — — — 2 4 —
Economic Development and Trade**.......................................... 88 102 87 80 448 0.6
Education**............................................................... 8,419 9,071 9,733 10,565 11,340 14.0
Teachers' Pension Plan (TPP)............................................ 42 238 235 240 290 0.4
Energy.................................................................... 367 144 116 142 148 0.2
Environment............................................................... 265 237 261 300 314 0.4
Executive Offices......................................................... 19 20 24 19 19 —
Finance — Own Account**................................................... 1,182 1,074 1,229 1,049 1,092 1.4
Interest on Debt........................................................ 10,337 9,694 9,604 9,368 9,571 11.8
Community Reinvestment Fund/Ontario Municipal Partnership Fund.......... 557 622 651 626 662 0.8
Community Reinvestment Fund One-Time Transition Funding................. — — — 233 — —
Electricity Consumer Price Protection Fund.............................. — 665 253 — — —
Power Purchases......................................................... 815 786 797 840 961 1.2
Contingency Fund**...................................................... — — — — 450 0.6
Government Services**..................................................... 471 327 457 889 663 0.8
Pension and Other Employee Future Benefits**............................ 63 102 309 458 735 0.9
Health and Long-Term Care**............................................... 23,793 25,660 27,880 30,797 32,718 40.5
SARS-Related and Major One-Time Health Costs............................ — — 824 — — —
Health Promotion**........................................................ 143 157 172 198 254 0.3
Intergovernmental Affairs................................................. 6 9 6 13 9 —
Labour.................................................................... 110 123 117 129 146 0.2
Municipal Affairs and Housing**........................................... 1,136 636 632 701 643 0.8
Natural Resources......................................................... 438 454 516 484 584 0.7
Northern Development and Mines............................................ 75 73 76 78 116 0.1
Office of Francophone Affairs............................................. 5 3 3 3 4 —
Public Infrastructure Renewal**††......................................... (22) 89 (16) 29 51 0.1
Research and Innovation**................................................. 132 139 165 191 235 0.3
Secretariat for Aboriginal Affairs........................................ 13 16 15 19 45 0.1
Tourism**................................................................. 130 118 193 146 139 0.2
Training, Colleges and Universities**..................................... 3,218 3,392 3,808 4,187 4,688 5.8
Transportation............................................................ 664 814 800 848 975 1.2
Year-End Savings.......................................................... — — — — (350) (0.4)
Total Operating Expense................................................... 64,269 66,898 71,708 76,377 80,828 100
__________
Source: Ontario Ministry of Finance.
* Second-quarter fiscal forecast as at September 30, 2005.
** Preliminary allocations and historical restatements reflecting new ministry structure, pending finalization of restructuring
currently underway.
† One-time and Extraordinary Assistance refers to spending above “normal” levels due to unforeseen events. In 2004-05, low
commodity prices and other unforeseen events resulted in one-time assistance totalling $458 million to producers including grain
and oil seed producers and tobacco producers.
†† Credit expense amounts relate to consolidation adjustments between Ontario Realty Corporation (ORC) and ministries to reflect
the net capital spending for the year.
Social Expenses
Health Sector. Health sector spending is delivered through the Ministry of Health and Long-Term Care and the Ministry of Health
Promotion. The Health sector is the largest single component of Provincial expense, accounting for an estimated 41% of operating
expense (operating expense includes program spending plus interest on debt) in fiscal 2005-06. Approximately 69% of Ontario's health
sector operating spending will be in the form of operating payments to public hospitals ($12.0 billion in fiscal 2005-06) and Ontario
Health Insurance Plan payments to physicians and other health care practitioners and drug programs ($10.7 billion in fiscal 2005-06).
Community and Children's Services. The Province provides a wide range of social services, including social assistance, childcare,
child welfare services, housing assistance and drug benefits for social assistance recipients. The combined operating expenses of the
Ministry of Children and Youth Services and the Ministry of Community and Social Services represent approximately 12% of fiscal
2005-06 total operating expense. The social assistance program including the Ontario Drug Benefit Program is the largest program and
includes a budget of $4,809 million in fiscal 2005-06.
Municipal Affairs. The Ministry of Municipal Affairs and Housing is responsible for building a strong provincial-municipal
relationship, encouraging a viable and balanced housing market and stronger and better communities and rural development. The
Ministry's fiscal 2005-06 operating outlook of $643 million accounts for nearly 1% of Provincial operating expense.
Education and Training. The combined operating budget of the Ministry of Education and the Ministry of Training, Colleges and
Universities, which includes provincial support for primary and secondary schools, universities, colleges and training programs, will
total $16,318 million (including the Teachers' Pension Plan), and accounts for approximately 20% of total provincial operating
expense in fiscal 2005-06. Transfer payments to school boards, the largest component of education spending, are projected to total
$10,637 million in fiscal 2005-06. The operating grants for colleges and universities in fiscal 2005-06 will total $3,361 million.
Environment, Resources and Economic Development
The Ministry of Transportation has an operating budget of $975 million in fiscal 2005-06. The Ministry is responsible for the
overall safety, integrity and performance of Ontario's transportation system, GO Transit and for the licensing of drivers, vehicles
and commercial carriers.
The operating budget of the Ministry of Agriculture, Food and Rural Affairs in fiscal 2005-06 is $605 million. The Ministry's role
is to assist in enhancing a supportive business environment in order to increase investment in Ontario's agricultural and food
sectors. Through a number of programs, the Ministry also promotes value-added agriculture and increased exports of food products.
Through the Ministry of Economic Development and Trade, the Ministry of Tourism, the Ministry of Culture and the Ministry of
Research and Innovation, the Province encourages entrepreneurship and promotes investment in scientific research, innovation and
technology development. The Ministries also promote Ontario's trade, tourism and investment potential. Together the Ministries have
an operating budget of $1,097 million in fiscal 2005-06.
The Ministry of Natural Resources ensures the sustainable development of the Province's vast resources and manages Crown lands and
the provincial park system. In addition, the Ministry is responsible for ensuring the protection of these resources from natural
disasters, such as forest fires. The Ministry's operating budget in fiscal 2005-06 is $584 million.
The Ministry of Environment and the Ministry of Energy protect the quality of the natural environment and encourage conservation
of material and water resources. They also promote the development of a competitive energy sector, which is economically and
environmentally sustainable. The Ministries' operating budget in fiscal 2005-06 totals $462 million.
The following table sets forth historical expense information for the fiscal year 2000-01. The table has not been updated to
reflect the new ministry structure.
Ontario's Capital Expense
Ministry 2000-01
(in
millions)
Agriculture and Food................................................................................................... 1
Attorney General....................................................................................................... 42
Children and Youth Services............................................................................................ 10
Community and Social Services.......................................................................................... 4
Community Safety and Correctional Services............................................................................. 99
Culture................................................................................................................ 18
Education.............................................................................................................. 4
Energy................................................................................................................. 86
Environment............................................................................................................ 22
Finance................................................................................................................ 7
Health and Long-Term Care.............................................................................................. 322
Management Board Secretariat........................................................................................... 24
Native Affairs Secretariat............................................................................................. 5
Natural Resources...................................................................................................... 65
Northern Development and Mines......................................................................................... 356
Public Infrastructure Renewal.......................................................................................... 4
Tourism and Recreation................................................................................................. 14
Training, Colleges and Universities.................................................................................... 204
Transportation......................................................................................................... 836
Total Capital Expense.................................................................................................. 2,123
__________
Sources: Ontario Ministry of Finance.
Starting with the 2005 Ontario Economic Outlook and Fiscal Review, 2004-05 capital expense figures for the Province of Ontario
were restated to reflect the new government ministry structures. Accordingly, the 2001-02 to 2004-05 capital expense figures
contained within the Financial Tables were restated to reflect the new government ministry structures, and the following table sets
forth such restated figures. The historical expense figures for the fiscal year 2000-01 are not readily available and therefore were
not restated. The following table provides an overview of the Province's capital expense for each of the fiscal years from 2001-02 to
2005-06.
Ontario's Capital Expense
% of Total
Current Capital
Actual Outlook* Expense
Ministry 2001-02 2002-03 2003-04 2004-05 2005-06 2005-06
(in millions)
Agriculture, Food and Rural Affairs**.......................................... 29 68 204 243 271 10.1
Attorney General............................................................... 46 43 24 34 75 2.8
Children and Youth Services.................................................... 6 7 — 4 109 4.1
Community and Social Services**................................................ 25 16 10 20 33 1.2
Community Safety and Correctional Services..................................... 88 66 47 32 48 1.8
Culture........................................................................ 14 42 24 64 115 4.3
Economic Development and Trade**............................................... 1 2 2 5 2 0.1
Education**.................................................................... 20 13 19 54 10 0.4
Energy......................................................................... 50 46 53 52 49 1.8
Environment.................................................................... 20 13 4 7 13 0.5
Finance**...................................................................... 11 8 5 25 4 0.1
Government Services**.......................................................... 3 4 5 8 12 0.4
Health and Long-Term Care**.................................................... 205 339 358 535 339 12.7
Health Promotion**............................................................. — — — — 5 0.2
Municipal Affairs and Housing**................................................ 12 20 3 34 132 4.9
Natural Resources.............................................................. 70 72 111 79 53 2.0
Northern Development and Mines††............................................... 371 229 113 242 264 9.9
Public Infrastructure Renewal**†, †††.......................................... 25 4 (19) 43 33 1.2
Capital Contingency Fund..................................................... — — — — 117 4.4
Research and Innovation**...................................................... 18 19 29 71 80 3.0
Secretariat for Aboriginal Affairs............................................. 3 2 — 2 3 0.1
Tourism**...................................................................... 9 55 51 65 88 3.3
Training, Colleges and Universities**.......................................... 46 68 116 417 131 4.9
Transportation††............................................................... 818 740 1,016 983 837 31.3
Year-End Savings............................................................... — — — — (150) (5.6)
Total Capital Expense***....................................................... 1,890 1,876 2,175 3,019 2,673 100
__________
* Second-quarter fiscal forecast as at September 30, 2005.
** Preliminary allocations and historical restatements reflecting new ministry structure, pending finalization of restructuring
currently underway.
*** Starting in 2002-03, major tangible capital assets owned by Provincial ministries (land, buildings and transportation
infrastructure) are accounted for on a full accrual accounting basis. Other tangible capital assets owned by Provincial
ministries will continue to be accounted for as expense in the year of acquisition or construction. All capital assets owned by
consolidated government organizations are accounted for on a full accrual basis.
† Ministries' contributions for investments in Provincially owned land and buildings are recorded as an expense by the
contributing ministries. Starting in 2002-03, any resulting adjustment to expense from the capitalization and amortization of
most of these Provincially owned land and buildings is recorded in the Ministry of Public Infrastructure Renewal.
†† Prior year expenses restated to reflect the change in accounting treatment introduced in the 2004-05 Public Accounts, to
disclose spending on northern highways in the ministry that carries out these activities.
††† Credit expense amounts relate to consolidation adjustments between Ontario Realty Corporation (ORC) and ministries to reflect
the net capital spending for the year.
Sources: Ontario Ministry of Finance and Ontario Ministry of Public Infrastructure Renewal.
(5) Outline of Principal Provincial Institutions
The Province has established a number of Crown corporations, which are primarily intended to provide goods and services needed to
implement approved government policy and programs or to provide a regulatory function for operations authorized by government
legislation. Among the more prominent Ontario Crown corporations are the Liquor Control Board of Ontario, Ontario Financing
Authority, the Ontario Lottery and Gaming Corporation, the Ontario Securities Commission, the Ontario Strategic Infrastructure
Financing Authority (formerly, the Ontario Municipal Economic Infrastructure Financing Authority) and the Ontario Northland
Transportation Commission.
Until its restructuring in April 1999 and its continuation as Ontario Electricity Financial Corporation (“OEFC”), Ontario Hydro
had a mandate to generate and supply power in Ontario. For a description of Ontario Hydro, its restructuring and the operations of
its successor companies, See “4. Public Debt — (2) Assets and Liabilities, (iii) Liabilities — Ontario Electricity Industry”.
(6) Sinking Funds
The Province of Ontario does not have a sinking funds system.
4. PUBLIC DEBT
(1) Debt
The Province has met its financing requirements through a combination of public borrowing, non-public borrowing and increases in
cash and temporary investments. There is no constitutional limit on borrowing.
Publicly Held Debt
The majority of Ontario's borrowing requirements are met through public market borrowing. See “4. Public Debt — (2) Assets and
Liabilities — (iii) Liabilities — Publicly Held Debt”.
Non-Publicly Held Debt
The Public Service Pension Plan (“PSPP”), the Ontario Public Service Employees Union (“OPSEU”) Pension Plan and the Ontario
Teachers' Pension Plan (“OTPP”). Prior to January 1, 1990, PSPP and OTPP were required to invest their net cash flow in debt issued
by the Province. Legislation now allows these Plans to invest in public capital markets, and they are no longer a source of direct
financing for the Province. The OPSEU Pension Plan was created in June 1994 through legislation dividing the PSPP and creating a
separate plan for OPSEU members and for certain other unionized non-management employees. See “4. Public Debt — (2) Assets and
Liabilities — (iii) Liabilities — Non Publicly Held Debt”.
The Canada Pension Plan Investment Fund (“CPP”). CPP obtains monies from a compulsory national contributory pension plan in which
all provinces other than Quebec participate. Each month, the net cash flow is invested in non-marketable securities issued by
participating provinces, agents of the Crown and the Government of Canada. The amount available to a province is based on the
proportion of total contributions coming from that province.
Borrowing Program
Current
Actual Outlook
2002-03(1) 2003-04(1) 2004-05(1) 2005-06(2)
(in millions)
Debt Issues......................................................................... $ 19,034 $ 28,178 $ 26,141 $ 26,911
Retirements:
Publicly Held Debt................................................................ 14,851 15,625 15,861 18,632
Canada Pension Plan............................................................... 1,295 1,201 1,133 1,214
Ontario Teachers' Pension Fund.................................................... 656 900 821 1,070
Public Service Pension Fund....................................................... 132 147 166 180
Ontario Public Service Employees' Union (“OPSEU”) Pension Plan.................... 62 70 79 86
Municipal Employee Retirement Fund................................................ 235 164 — —
Other............................................................................. 39 34 13 18
17,270 18,141 18,073 21,200
Net Debt Retirements/(Issues)....................................................... (1,764) (10,037) (8,068) (5,711)
Decrease/(Increase) in Deposits with the
Province of Ontario Savings Office(3)............................................. 2,438 — — —
Other Items(4)...................................................................... (2,555) 3,240 (281) 2,249
Acquisition less Amortization of Tangible Capital Assets............................ 496 427 550 993
Increase/(Decrease) in Cash, Cash Equivalents and Temporary
Investments(5).................................................................... 1,502 887 6,244 —
Surplus/(Deficit)................................................................... $ 117 $ (5,483)$ (1,555) $ (2,369)
__________
Source: Ontario Ministry of Finance.
(1) 2002-03 to 2004-05 refers to information presented in the Public Accounts of Ontario, Consolidated Statement of Cash Flows.
(2) Current Outlook 2005-06 refers to information presented in the 2005 Ontario Budget and updated in the 2005 Ontario Economic
Outlook and Fiscal Review.
(3) The Province of Ontario Savings Office was sold for $48.5 million on March 31, 2003.
(4) Accruals, Consolidations and net borrowing on behalf of agencies and liability for retirement benefits are grouped under other
items.
(5) The Increase/(Decrease) in Cash, Cash Equivalents and Temporary Investments in 2004-05 represents $6.2 billion of pre-funding
for the 2005-06 Total Long-Term Public Borrowing Requirement.
(2) Assets and Liabilities
(i) General
Two features of Ontario's accounting and financing policies have a material effect on the reporting of assets and liabilities: the
treatment of physical assets and the intermediary aspect of centralized financing.
Starting in 2002-03, major tangible capital assets owned by the Province (land, buildings and transportation infrastructure) are
accounted for on a full accrual accounting basis. Other tangible capital assets owned by the Province will be reported in subsequent
years.
The intermediary activity of borrowing on behalf of provincially created bodies creates assets and liabilities. These would not
appear if the bodies were funded independently or through a provincial guarantee. This borrowing action increases the Province's
debt. The related asset arises because the government is funding, through loans and investments, expenses that are administered
outside a government ministry.
Activities so funded are expected to generate sufficient return to repay the principal and interest. However, the recipients of
the advances and investments are not always required to produce a profit, and some are not self-sustaining.
(ii) Assets
Summary of Assets
As at March 31, % Of
2005 Total
(in millions)
Financial Assets:
Cash and Cash Equivalents.............................................................................. $ 10,165 24.7
Temporary Investments.................................................................................. 4,188 10.2
Accounts Receivable.................................................................................... 6,316 15.4
Loans Receivable and Other Assets...................................................................... 8,180 19.9
Investment in Government Business Enterprises.......................................................... 12,243 29.8
$ 41,092 100.0
Non-Financial Assets:
Tangible Capital Assets................................................................................ $ 14,919 100.0
__________
Source: Ontario Ministry of Finance.
Cash and Temporary Investments
Temporary investments are recorded at the lower of cost or fair value and are mainly marketable, short-term securities issued or
guaranteed by Canadian chartered banks and the provincial and federal governments.
Between April 1, 2004 and March 31, 2005, the month-end level of cash and temporary investments varied from a low of approximately
$3,804 million to a high of approximately $13,114 million. The cash and temporary investments are used to accommodate differences in
revenue and expense flows during each fiscal year and to provide flexibility for debt management.
Accounts Receivable
Accounts receivable comprise taxes receivable, receivables from the Government of Canada and other receivables. Accounts
receivables are recorded at cost less a provision for doubtful accounts when collectibility is considered doubtful.
Loans Receivable and Other Assets
Loans receivable with significant concessionary terms are recorded at the date of issuance at face value discounted by the amount
of the grant portion. The grant portion is recognized as an expense at the date of issuance of the loan. The amount of the loan
discount is amortized to revenue over the term of the loan. Loans receivable include amounts owing from government business
enterprises.
Investment in Government Business Enterprises
Investment in Government Business Enterprises represents the net assets of government business enterprises recorded on the
modified equity basis as described under Principles of Consolidation.
Government business enterprises are defined as those Crown corporations, boards and commissions which have the financial and
operating authority to carry on a business, have as their principal activity and source of revenue the selling of goods and services
to individual and non-government organizations and are able to maintain their operations and meet their obligations from revenues
generated outside the government reporting entity.
The activities of government business enterprises are recorded in the financial statements under the modified equity method. Under
this method, government business enterprises are reported in accordance with accounting principles generally accepted for business
enterprises. Their combined net assets are included in the financial statements as Investment in Government Business Enterprises on
the Consolidated Statement of Financial Position and their combined net income is shown as a separate item on the Consolidated
Statement of Operations. This method does not require the elimination of inter-organizational balances.
Tangible Capital Assets
Tangible capital assets are recorded at historical cost. Historical cost includes the costs directly related to the acquisition,
design, construction, development, improvement or betterment of tangible capital assets. Cost includes overheads directly
attributable to construction and development but excludes interest. Estimated historical cost is used to record existing tangible
capital assets when actual cost is unknown.
(iii) Liabilities
Overview
Liabilities include debt issued for Provincial purposes and for Ontario Electricity Financial Corporation, accounts payable and
accrued liabilities, pension liabilities for the Public Service Pension Plan, the Ontario Public Service Employees' Union (“OPSEU”)
Pension Plan, the Ontario Teachers' Pension Plan, Power Purchase Contracts, Nuclear Funding Liability and other liabilities.
Summary of Liabilities
As at March 31,
2005 % of Total
(in millions)
Liabilities:
Publicly Held Debt(1)................................................................................ $ 130,988 72.1
Non-Publicly Held Debt
Canada Pension Plan................................................................................ 10,233 5.6
Ontario Teachers' Pension Fund..................................................................... 8,666 4.8
Canada Mortgage and Housing Corporation............................................................ 1,003 0.5
Public Service Pension Fund........................................................................ 2,886 1.6
Ontario Public Service Employees' Union (“OPSEU”) Pension Fund..................................... 1,371 0.7
Other.............................................................................................. 1,230 0.7
25,389 13.9
Total Debt Issued.................................................................................... 156,377 86.0
Accounts Payable and Other Liabilities............................................................... 18,435 10.1
Power Purchase Contracts............................................................................. 3,785 2.1
Nuclear Funding Liabilities.......................................................................... 1,410 0.8
Pensions and Other Employee Future Benefits.......................................................... 1,747 1.0
Total Liabilities.................................................................................... $ 181,754 100.0
Obligations guaranteed(2)............................................................................ $ 3,200 100.0
Total obligations guaranteed(3)...................................................................... $ 3,200 100.0
__________
Source: Ontario Ministry of Finance.
(1) All balances are expressed in Canadian dollars. The balances above reflect the effect of related derivatives contracts entered
into by the Province. See “4. Public Debt — (5) Financial Tables — I. Summary of Net Debt and Accumulated Deficit — Risk
Management and Derivative Financial Instruments”.
(2) These are outstanding loans guaranteed and other contingencies.
(3) In addition to the above reported obligations, the Province has entered into the following agreements: Social Housing Loan
Insurance Agreements.
For all non-profit housing projects in the provincial portfolio, the Province is liable to indemnify and reimburse Canada
Mortgage and Housing Corporation (“CMHC”) for any net costs, including any environmental liabilities, incurred as a result of
project defaults, directly or indirectly, through the Ministry of Municipal Affairs and Housing or the Ontario Housing
Corporation. At March 31, 2005, there were $8.8 billion (2004, $9.0 billion) of mortgage loans outstanding. As operating
subsidies provided are sufficient to ensure that all mortgage payments can be made when due, default is unlikely. To date, there
have been no claims for defaults on insured mortgage loans. Ontario Nuclear Funds Agreement. See “4. Public Debt — (2) Assets
and Liabilities, (iii) Liabilities — Ontario Electricity Industry”.
Publicly Held Debt
Publicly held debt is debt issued to the general public. As at March 31, 2005, the total publicly held debt issued was
$130,988 million, $98,695 million of which was issued in Canadian dollars (includes $3,747 million of treasury bills), $24,638 million
in U.S. dollars (which includes $269 million in U.S. commercial paper), $2,367 million in Japanese Yen, $3,472 million in Euros and
$1,816 million in other currencies.
From April 1, 2005 through November 25, 2005, the Province announced public offerings of bonds and notes totaling approximately
$11.9 billion of which $10.5 billion were for provincial purposes and $1.4 billion was debt incurred for the OEFC. The tables below
provide a summary of the publicly held debt issued by the Province from April 1, 2005 through November 25, 2005 for provincial
purposes.
Debt Issued by the Province for Provincial Purposes
Principal
Date of Issue Date of Maturity Interest Rate % Funds (in millionsReferences
04-Apr-2005 19-May-2010 4.000 Canadian $ 500.0 (1)
08-Apr-2005 06-Apr-2009 3 CBA+0.01 Canadian $ 50.0 (3) (4)
24-May-2005 02-Jun-2020 4.850 Canadian $ 25.0 (1) (5)
24-May-2005 02-Jun-2018 5.500 Canadian $ 25.0 (1) (13)
25-May-2005 02-Jun-2020 4.850 Canadian $ 41.0 (1) (5)
27-May-2005 08-Mar-2015 4.500 Canadian $ 500.0 (1) (12)
30-May-2005 02-Jun-2018 5.500 Canadian $ 25.0 (1) (13)
03-Jun-2005 02-Jun-2020 4.850 Canadian $ 48.0 (1) (5)
06-Jun-2005 02-Jun-2035 5.600 Canadian $ 500.0 (1) (14)
06-Jun-2005 02-Jun-2020 4.850 Canadian $ 44.0 (1) (5)
16-Jun-2005 16-June-2015 6.250 New Zealand $ 750.0 (1) (15)
17-Jun-2005 17-June-2007 Step-up Canadian $ 40.0 (1) (6)
20-Jun-2005 17-June-2007 Step-up Canadian $ 35.0 (7)
21-Jun-2005 Variable Variable Canadian $ 1,833.7 (17)
21-Jun-2005 21-June-2007 Step-up Canadian $ 25.0 (8)
21-Jun-2005 21-June-2007 Step-up Canadian $ 25.0 (9)
29-Jun-2005 02-June-2016 Step-up Canadian $ 200.0 (10)
29-Jun-2005 29-June-2015 2.125 Swiss Franc 200.0 (2) (16)
05-Jul-2005 02-Jun-2035 5.600 Canadian $ 500.0 (1) (14)
05-Jul-2005 05-Jul-2010 Step-up Canadian $ 75.5 (11)
22-Jul-2005 08-Mar-2015 4.500 Canadian $ 500.0 (1) (12)
09-Aug-2005 02-Jun-2018 5.500 Canadian $ 50.0 (1) (13)
10-Aug-2005 02-Jun-2018 5.500 Canadian $ 35.0 (1) (13)
12-Aug-2005 02-Jun-2035 5.600 Canadian $ 500.0 (1) (14)
17-Aug-2005 17-Aug-2015 7.75 South African Rand 300.0 (2) (18)
22-Aug-2005 22-Aug-2007 Step-up Canadian $ 45.0 (1) (19)
22-Aug-2005 02-Dec-2016 Step-up Canadian $ 100.0 (1) (20)
26-Aug-2005 08-Mar-2015 4.500 Canadian $ 500.0 (1) (12)
30-Aug-2005 02-Jun-2020 4.850 Canadian $ 25.0 (1) (5)
31-Aug-2005 02-Jun-2045 4.500 Canadian $ 25.0 (1)
08-Sep-2005 08-Sep-2014 2.000 Swiss Franc 200.0 (2)
09-Sep-2005 19-Nov-2008 4.400 Canadian $ 250.0 (1)
12-Sep-2005 02-Dec-2039 5.700 Canadian $ 100.0 (1) (21)
13-Sep-2005 02-Jun-2035 5.600 Canadian $ 500.0 (1) (14)
21-Sep-2005 21-Sep-2007 Step-up Canadian $ 35.0 (1) (22)
21-Sep-2005 13-Jul-2034 Step-up Canadian $ 47.5 (1) (23)
22-Sep-2005 22-Sep-2007 Step-up Canadian $ 25.0 (24)
22-Sep-2005 13-Jul-2040 6.200 Canadian $ 50.0 (1)
26-Sep-2005 26-Sep-2007 Step-up Canadian $ 25.0 (1) (25)
05-Oct-2005 02-Oct-2010 Step-up Canadian $ 200.0 (1) (20)
05-Oct-2005 02-Dec-2016 5.700 Canadian $ 100.0 (1) (21)
12-Oct-2005 12-Dec-2039 6.375 New Zealand $ 250.0 (2)
21-Oct-2005 21-Oct-2015 3 CBA+0.03 Canadian $ 250.0 (3) (26)
28-Oct-2005 02-Jun-2045 4.500 Canadian $ 75.0 (1)
28-Oct-2005 02-Dec-2039 5.700 Canadian $ 100.3 (1) (21)
31-Oct-2005 02-Jun-2045 4.500 Canadian $ 50.0 (1)
31-Oct-2005 31-Oct-2007 Step-up Canadian $ 50.0 (1) (27)
04-Nov-2005 04-Nov-2007 Step-up Canadian $ 35.0 (1) (28)
15-Nov-2005 01-Dec-2010 4.000 Canadian $ 200.0 (2)
18-Nov-2005 02-Dec-2039 5.700 Canadian $ 100.0 (1) (21)
18-Nov-2005 02-Jun-2018 5.500 Canadian $ 50.0 (1) (13)
21-Nov-2005 08-Mar-2008 3.875 Canadian $ 500.0 (1)
21-Nov-2005 02-Dec-2039 5.700 Canadian $ 100.0 (1) (21)
22-Nov-2005 02-Dec-2039 5.700 Canadian $ 50.0 (1) (21)
__________
* 3 CBA is 3-month Canadian Bankers' Acceptances Rate.
(1) Interest paid semi-annually.
(2) Interest paid annually.
(3) Interest paid quarterly.
(4) During the 2005-06 fiscal year, Series DMTN143 was re-opened once, bringing the total issue size to $550 million. In addition,
the Province entered into interest rate agreements that effectively converted the interest rate obligation on this debt to a
fixed rate of 4.57%.
(5) During the 2005-06 fiscal year, Series DMTN140 was re-opened five times, bringing the total issue size to $354 million.
(6) Bonds are extendible at the option of the Province on the initial maturity date of June 17, 2007 and on each extended maturity
date thereafter to the final maturity date of June 17, 2017. Interest is payable semi-annually at 4.0% in year 1-2, 4.05% in
year 3-4, 4.1% in year 5-6, 4.15% in year 7-8, 4.2% in year 9, 4.25% in year 10, 4.75% in year 11 and 5.25% in final year. In
addition, the Province entered into interest rate agreements that effectively converted the interest rate obligation on this
debt to a fixed rate of 3.13%.
(7) Bonds are extendible at the option of the Province on the initial maturity date of June 20, 2007 and on each extended maturity
date thereafter to the final maturity date of June 20, 2017. Interest is payable semi-annually at 4.0% in year 1-3, 4.2% in
year 4-5, 4.25% in year 6-7, 4.3% in year 8-9, 4.5% in year 10, 5.0% in year 11 and 5.5% in final year. In addition, the
Province entered into interest rate agreements that effectively converted the interest rate obligation on this debt to a fixed
rate of 3.09%.
(8) Bonds are extendible at the option of the Province on the initial maturity date of June 21, 2007 and on each extended maturity
date thereafter to the final maturity date of June 21, 2010. Interest is payable semi-annually at 3.05% in year 1-2, 3.7% in
year 3, 4.0% in year 4 and 4.5% in final year. In addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligation on this debt to a fixed rate of 3.13%.
(9) Bonds are extendible at the option of the Province on the initial maturity date of June 21, 2007 and on each extended maturity
date thereafter to the final maturity date of June 21, 2010. Interest is payable semi-annually at 3.1% in year 1-2, 3.3% in
year 3, 4.0% in year 4 and 4.7% in final year. In addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligation on this debt to a fixed rate of 3.13%.
(10) Bonds are extendible at the option of the bond holders on June 2, 2016 to the final maturity date of June 2, 2035 and
exchangeable for Series DMTN119. Interest is payable semi-annually at 3.6% until June 2, 2016 and 4.8%, thereafter if
extended. In addition, the Province entered into interest rate agreements that effectively converted the interest rate
obligation on this debt to a fixed rate of 4.67%.
(11) Bonds are callable at the option of the Province on July 5, 2007. Interest is payable semi-annually at 3.05% in year 1-2 and
4.2% thereafter. In addition, the Province entered into interest rate agreements that effectively converted the interest rate
obligation to a fixed rate of 3.13%.
(12) During the 2005-06 fiscal year, Series DMTN135 was re-opened three times, bringing the total issue size to $2,000 million.
(13) During the 2005-06 fiscal year, Series DMTN79 was re-opened six times, bringing the total issue size to $395 million including
$60 million for OEFC.
(14) During the 2005-06 fiscal year, Series DMTN119 was re-opened four times, bringing the total issue size to $5,423 million.
(15) The Province entered into currency exchange agreements that effectively converted these New Zealand dollar obligations to
Canadian dollar obligations at an exchange rate of 0.88973. In addition, the Province entered into interest rate agreements
that effectively converted the interest rate obligation to a fixed rate of 4.26%.
(16) The Province entered into currency exchange agreements that effectively converted 174.5 million Swiss franc obligations to
Canadian dollar obligations at an exchange rate of 0.99342. In addition, the Province entered into interest rate agreements
that effectively converted the interest rate obligations to a fixed rate of 3.72%.
(17) Ontario Savings Bonds Series 2005 were available in various types, maturities and interest rates. This was eleventh issue of
provincial savings bonds and the total proceeds from this issue were $1,833.7 million.
(18) The Province entered into currency exchange agreements that effectively converted these South African rand obligations to
Canadian dollar obligations at an exchange rate of 0.18027. In addition, the Province entered into interest rate agreements
that effectively converted the interest rate obligations to a fixed rate of 4.20%.
(19) Bonds are extendible at the option of the Province on the initial maturity date of August 22, 2007 and on each extended
maturity date thereafter to final maturity date of August 22, 2017. Interest is payable semi-annually at 4.1% in year 1-2 and
4.2% in year 3, 4.25% in year 4, 4.3% in year 5, 4.4% in year 6, 4.5% in year 7, 4.6% in year 8, 4.75% in year 9, 5.0% in year
10 and 5.5% in final year. In addition, the Province entered into interest rate agreements that effectively converted the
interest rate obligation to a fixed rate of 3.25%.
(20) Registered bond holder has the right to extend the bond on the maturity date of December 2, 2016 to June 2, 2035 and/or
exchange the bond for Series DMTN119 at par. Interest is payable semi-annually at 3.75% until the maturity and thereafter at
4.75% if extended.
(21) During the 2005-06 fiscal year, Series NE was re-opened six times, bringing the total issue size to $1,324 million.
(22) Bonds are extendible at the option of the Province on the initial maturity date of September 21, 2007 and on each extended
maturity date thereafter to final maturity date of September 21,2017. Interest is payable semi-annually at 4.0% in year 1-2
and 4.1% in year 3-4, 4.2% in year 5-6, 4.3% in year 7-8, 4.5% in year 9, 4.6% in year 10, 5.0% in year 11, 5.25% in final
year. In addition, the Province entered into interest rate agreements that effectively converted the interest rate obligation
to a fixed rate of 3.19%.
(23) Interest is payable semi-annually at 15.0% until January 13, 2006 and thereafter at 5.0%.
(24) Bonds are extendible at the option of the Province on the initial maturity date of September 22, 2007 and on each extended
maturity date thereafter to final maturity date of September 22, 2010. Interest is payable monthly at 3.25% in year 1-2 and
3.5% in year 3, 3.75% in year 4 and thereafter at 4.0% until final maturity date. In addition, the Province entered into
interest rate agreements that effectively converted the interest rate obligation to a fixed rate of 3.2%.
(25) Bonds are extendible at the option of the Province on the initial maturity date of September 26, 2007 and on each extended
maturity date thereafter to final maturity date of September 26, 2013. Interest is payable monthly at 3.75% in year 1-2 and
3.85% in year 3-4, 3.95% in year 5, 4.05% in year 6, 4.15% in year 7, 4.25% in year 8, 4.5 % in year 9, 5.0% in year 10, 5.5%
in year 11 and 6.0% in final year. In addition, the Province entered into interest rate agreements that effectively converted
the interest rate obligation to a fixed rate of 3.26%.
(26) The Province entered into interest rate agreements that effectively converted the interest rate obligation to a fixed rate of
4.34%.
(27) Bonds are extendible at the option of the Province on the initial maturity date of October 31, 2007 and on each extended
maturity date thereafter to final maturity date of April 30, 2013. Interest is payable semi-annually at 4.0% in year 1-2 and
4.1% in year 3, 4.2% in year 4, 4.3% in year 5, 4.4% in year 6, 4.5% in year 7, 4.6% in year 8, 4.75% in year 9, 5.0% in year
10, 5.5% in year 11 and 6.0% in final year. In addition, the Province entered into interest rate agreements that effectively
converted the interest rate obligation to a fixed rate of 3.55%.
(28) Bonds are extendible at the option of the Province on the initial maturity date of November 7, 2007 and on each extended
maturity date thereafter to final maturity date of November 4, 2010. Interest is payable semi-annually at 3.7% in year 1-2 and
3.85% in year 3, 4.1% in year 4, 4.5% in final year.
Debt Issued by the Province for Ontario Electricity
Financial Corporation (“OEFC”)
Principal
Date of Issue Date of Maturity Interest Rate % Funds (in millions)References
24-May-2005 19-May-2009 4.000 Canadian $ 500.0 (1)
06-Jun-2005 02-Jun-2018 5.500 Canadian $ 60.0 (1)
13-Jul-2005 13-Jul-2012 5.500 Australian $ 125.0 (2)
04-Oct-2005 01-Dec-2036 2.000 Canadian $ 700.0 (1) (3)
22-Nov-2005 22-Nov-2010 7.750 South African Rand 300.0 (2)
__________
(1) Interest paid semi-annually.
(2) Interest paid annually.
(3) This is a Real Return Bond linked to Canadian Consumer Price Index (“CCPI”), issued at base index of 127.54893. Principal amount
payable will be indexed on redemption date. Interest is payable semi-annually at 2.0% on notional value calculated based on CCPI
over base index on each coupon date.
Ontario Electricity Industry
OEFC is the continued Ontario Hydro corporation, a Crown agency, responsible for the management of the debt and other liabilities
of the former Ontario Hydro that were not transferred to successor companies as part of the restructuring of Ontario Hydro in 1999
and includes the administration of certain power purchase agreements with non-utility generators. As at March 31, 2005, OEFC had
total debt of $27.518 billion (2004, $27.553 billion), excluding short-term overnight lending from the Province. $16.8 billion of
OEFC's debt as at March 31, 2005 (2004, $16.4 billion) is held by the Province and included in total debt and other liabilities.
Ontario Hydro's successor companies include Ontario Power Generation Inc., (“OPG”), a generation business, and Hydro One Inc.,
(“Hydro One”), a transmission and distribution business, both of which are wholly-owned by the Province. In addition, the Independent
Electricity System Operator (“IESO”, formerly, until December 2004, the Independent Electricity Market Operator, or “IMO”) is the
electricity system and market operator and the Electrical Safety Authority is responsible for electricity safety inspection. Pursuant
to various transfer orders (“Transfer Orders”), assets of the former Ontario Hydro were transferred to OPG, Hydro One and the IESO in
exchange for debt. The Province assumed a portion of OPG's and Hydro One's debt in exchange for equity, in order to provide them with
commercially acceptable capital structures. As of March 31, 2005, OEFC held notes receivable in the amount of $3.3 billion from OPG,
$78 million from the IESO and $8.9 billion from the Province.
The Electricity Act, 1998 (“Electricity Act”) defines “stranded debt” as the amount of OEFC's debt and other liabilities that, in
the opinion of the Minister of Finance, cannot reasonably be serviced and retired in a competitive electricity market. On April 1,
1999, the Ministry of Finance estimated the stranded debt at approximately $20.9 billion. OEFC's unfunded liability is the net
deficiency of OEFC's assets over its liabilities. Unfunded liability represents the stranded debt adjusted for $1.5 billion of
additional assets transferred to OEFC on April 1, 1999, at which time the unfunded liability was $19.433 billion. OEFC's unfunded
liability at March 31, 2005 is $20.363 billion.
As part of the restructuring of the electricity sector, a long-term plan was put in place which provides for certain dedicated
revenue streams for servicing and repayment of OEFC's debt and other liabilities. These revenue streams are established under the
Electricity Act and include payments-in-lieu of property taxes and federal and provincial corporate income and capital taxes paid by
OPG, Hydro One and the municipal electric utilities.
The Province receives dividend payments on its investments in OPG and Hydro One. Pursuant to the government's commitment to keep
electricity income in the electricity sector, the combined net income of OPG and Hydro One in excess of the Province's interest
expenditure on its investment in the companies is allocated to OEFC for purposes of debt retirement.
Residual stranded debt is the portion of OEFC's stranded debt that cannot be serviced by the foregoing dedicated revenue streams.
The residual stranded debt was estimated at $7.8 billion on April 1, 1999. The Electricity Act provides for a debt retirement charge
of 0.7 cents per kilowatt hour to be levied on Ontario electricity users. This charge, collected by the IESO, distributors and
retailers, is payable to OEFC until residual stranded debt is retired.
The Electricity Act and the Ontario Energy Board Act, 1998 (“OEB Act”) set out the legislative framework for Ontario's competitive
electricity market and restructuring of Ontario Hydro. Open, non-discriminatory access to transmission and distribution systems
commenced May 1, 2002. Effective December 1, 2002, amendments to the OEB Act fixed the commodity price payable by low volume and
designated consumers. OEFC was responsible for covering any shortfall between that price and the market price until December 31,
2004, when that responsibility was assumed by the newly-created Ontario Power Authority (“OPA”). As of April 1, 2005, the Ontario
Energy Board (“OEB”) assumed responsibility for setting the commodity price payable by low volume and designated consumers under the
Regulated Price Plan (“RPP”). The OPA finances any shortfall between OEB regulated prices under the RPP and market prices, with any
shortfall to be recovered through the setting of RPP prices in the following period.
During fiscal year 2001-02, the Province, OPG and certain subsidiaries of OPG entered into the Ontario Nuclear Funds Agreement
(“ONFA”) to establish, fund and manage segregated funds to ensure that sufficient funds are available to pay for costs of managing and
disposing of nuclear waste and decommissioning nuclear generating stations. ONFA became effective on July 24, 2003. Under ONFA, OPG
is required to make quarterly payments to the funds that, together with income earned and a contribution made by OEFC, would cover
all currently estimated costs. The Province is liable to make payments should the cost estimate for nuclear used fuel management rise
above specified thresholds, for a fixed volume of used fuel. The Province is also obligated under ONFA to make additional
contributions to the used fuel fund if that fund earns less than 3.25% over the Ontario consumer price index. If the earnings on the
assets in the fund exceed the specified rate, the Province is entitled to the excess.
Effective July 31, 2003, two agreements came into effect to satisfy the Canadian Nuclear Safety Commission (“CNSC”) licensing
requirements for financial guarantees in respect of OPG's nuclear decommissioning and waste management obligations. One agreement,
between the Province, OPG and the CNSC, gives the CNSC access to the segregated funds established under ONFA. The Province also
provided a direct provincial guarantee to the CNSC of the cost of OPG's nuclear decommissioning and waste management in an amount up
to $1.51 billion which relates to the portion of the costs not funded by the segregated funds. OPG pays the Province a guarantee fee
of 0.5% of the amount guaranteed by the Province on an annual basis.
Subject to deductibles of $20 million and $10 million respectively, OEFC has agreed to indemnify OPG and Hydro One in respect of:
(i) the failure of the Transfer Orders to transfer any asset, right or thing, or any interest therein related to their business;
(ii) any adverse claims or interests, including those of the Crown, subject to certain exclusions, or any deficiency or lack of title
in respect of any asset, right or thing or any interest therein, which was intended to be transferred; and (iii) the creation,
treatment, payment to or from or other dealing with any equity account of Ontario Hydro, including with respect to certain litigation
relating thereto. The Province has guaranteed the obligations of OEFC under the indemnity.
Non-Publicly Held Debt
Non-publicly held debt is debt issued to certain public sector pension plans or the Federal Government and its agencies. As of
March 31, 2005, approximately 14.6% of total liabilities were in the form of non-publicly held debt. Non-publicly held debt is
composed almost exclusively of debt to pension plans, the two largest components being Ontario Teachers' Pension Fund debt (5.0% of
total liabilities) and CPP debt (5.9% of total liabilities).
Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities comprise transfer payments, interest on publicly held debt, salaries, wages, benefits,
materials, supplies, and deferred revenue.
Pensions and Other Employee Future Benefits
As at March 31,
Pensions and Other Employee Future Benefits Liability (Asset) 2005 2004
(in millions)
Obligation for benefits................................................................................... $ 59,566 $ 55,782
Less: plan fund assets.................................................................................... (60,389) (57,863)
Unamortized actuarial gains/(losses)...................................................................... 1,170 2,518
Adjustments(1)............................................................................................ 1,400 1,363
Total..................................................................................................... $ 1,747 $ 1,800
__________
(1) Adjustments consist of: i) differences for amounts reported by the pension plans at December 31, instead of the Province's
year-end of March 31; ii) unamortized difference between employer and employee contributions for jointly sponsored pension
plans; iii) unamortized employee contribution reductions for solely sponsored plans; iv) unamortized initial unfunded
liabilities of jointly sponsored plans; and v) amounts payable by the Province that are reflected as contributions in the
pension plan assets.
Pensions
The Province sponsors several pension plans. It is the sole sponsor of the Public Service Pension Plan (“PSPP”) and joint sponsor
of the Ontario Public Service Employees Union (“OPSEU”) Pension Plan, and the Ontario Teachers' Pension Plan (“OTPP”).
These three plans are contributory defined benefit plans that provide Ontario government employees and elementary and secondary
school teachers and administrators with a guaranteed amount of retirement income. Benefits are based primarily on the best five-year
average salary of members and their length of service, and are indexed to changes in the Consumer Price Index to provide protection
against inflation. Plan members normally contribute between 7 and 9 per cent of their salary to these plans. The Province matches
these contributions.
Funding of these plans is based on statutory actuarial funding valuations undertaken at least every three years. The Province
contributed $708 million to the OTPP in 2004-05 (2003-04, $683 million), $124 million to the PSPP (2003-04, $108 million) and
$135 million to the OPSEU Pension Plan (2003-04, $118 million). During calendar year 2004, the OTPP paid benefits, including transfers
to other plans of $3.4 billion (2003, $3.2 billion), the PSPP paid $799 million (2003, $770 million) and the OPSEU Pension Plan paid
$493 million (2003, $476 million). Under agreements between the Province and OPSEU, and between the Province and the Ontario
Teachers' Federation (“OTF”), gains and losses arising from statutory actuarial funding valuations are shared by the co-sponsors.
The government's best estimate of the future annual inflation rate used in the pension and other employee future benefits
calculations is 2.5 per cent, the salary escalation rate is 3.5 per cent, the discount rate and the expected rate of return on
pension plan assets are 7 per cent for OTPP, 6.5 per cent for PSPP and 6.75 per cent for OPSEU Pension Plan. Actuarial gains or
losses are amortized over periods of 10 to 13 years.
The Province is also responsible for sponsoring the Ontario Teachers' Retirement Compensation Arrangement and the Public Service
Supplementary Benefits Plan. Expenses and liabilities of these plans are included in the Pensions Expense and Pensions Liability
reported in the financial statements.
Other Employee Future Benefits
Other Employee Future Benefits includes non-pension retirement benefits, post-employment benefits and compensated absences. The
discount rate used in the Other Employee Future Benefits (except retirement benefits) calculation for 2004-05 is 5.25 per cent.
PSAB has issued recommendations on post-employment benefits, compensated absences and termination benefits with an implementation
date for fiscal years beginning after January 1, 2004. Consequently, in 2004-05, the Province refined its method of calculating the
liability and expense of termination pay and workers' compensation benefits in accordance with PSAB's recommendations. Also, starting
with 2004-05, liabilities for long-term disability benefits, continuation of benefits for employees on long-term disability and/or
workers' compensation, and compensated absences that can be carried over more than one year are now accrued in the Province's
financial statements, calculated on an actuarial basis using the government's borrowing rate as the discount rate.
The cumulative effect of these changes has resulted in a $255 million increase in the Pensions and Other Employee Future Benefits
Liability as at April 1, 2004 with a corresponding increase in the 2004-05 Pensions and Other Employee Future Benefits Expense.
Other Employee Future Benefits — Retirement Benefits
The Province provides dental, basic life insurance, supplementary health and hospital benefits to retired employees through a
self-insured, unfunded defined benefit plan. The Province paid $95 million for benefits under the plan in 2004-05 (2003-04,
$97 million). The liability for non-pension retirement benefits of $2.1 billion as at March 31, 2005 (2004, $2.0 billion) is included
in the Other Employee Future Benefits Liability. The expense for 2004-05 of $221 million (2003-04, $162 million) is included in the
Other Employee Future Benefits Expense.
The discount rate used in the other retirement benefits calculation for 2004-05 is 5.75 per cent (2003-04, 5.60 per cent).
Subsequent to March 31, 2005, the Province entered into an agreement with OPSEU to change various supplemental health benefits. The
cost of these changes of $211 million will be included in the 2005-06 Other Employee Future Benefits Expense.
Other Employee Future Benefits — Post-Employment Benefits
The Province provides employees who have completed 5 years of service, termination pay equal to one week's salary for each year of
service up to a maximum of 50 per cent of their annual salary. Employees who have completed one year of service but less than 5 years
are also entitled to termination pay in the event of death, retirement or release from employment. The termination pay benefits are
unfunded and are administered by the Province. The Province paid out $43 million in termination pay in 2004-05. The liability for
termination pay of $777 million as at March 31, 2005 (2004, $858 million) is included in the Other Employee Future Benefits
Liability. The expense for 2004-05 of ($39 million) (2003-04, $54 million), including a $112 million reduction in the liability as a
result of a change in estimation method, is included in the Other Employee Future Benefits Expense.
The Province also provides on a self-insured basis workers' compensation benefits, long-term disability benefits and regular
benefits to employees who are on workers' compensation and/or long-term disability. The liability for workers' compensation of
$349 million as at March 31, 2005 (2004, $268 million) net of deposits of $3 million (2004, $5 million) is included in the Other
Employee Future Benefits Liability. The expense for 2004-05 of $120 million (2003-04, $73 million) including a $39 million payment
made in 2004-05 (2003-04, $45 million) is included in the Other Employee Future Benefits Expense. The 2004-05 expense also includes a
$92 million increase in the liability as a result of a change in estimation method.
The unfunded liability for long-term disability benefits of $183 million as at March 31, 2005 is net of deposits of $321 million,
and is included in the Other Employee Future Benefits Liability. The 2004-05 expense of $232 million included a $47 million payment
for long-term disability benefits in 2004-05 (2003-04, $45 million) and the impact of compliance with PSAB recommendations on
long-term disability benefits.
Other Liabilities
Other Liabilities include deferred revenues, Electricity Consumer Price Protection Fund (estimated surplus for the period April 1,
2004 to March 31, 2005 to be returned to eligible consumers), pension and benefit funds related to the Provincial Judges' Pension
Fund and the Deputy Ministers' Supplementary Benefit Account, externally restricted funds and other miscellaneous liabilities.
Claims Against the Crown
Of the claims outstanding against the Crown in Right of Ontario as at March 31, 2005, 78 were for amounts over $50 million each —
See “Volume 1, 2004-2005 Public Accounts of Ontario, Section 4” (82 including claims over $50 million against Crown agencies as
reported in the Consolidated Financial Statements contained in the 2004-2005 Public Accounts of Ontario). These claims arise from
legal action, either in progress or threatened, in respect of aboriginal land claims, breach of contract, damages to persons and
property and like items. As of December 2, 2005 there were 83 claims outstanding against the Crown in Right of Ontario, which were
for amounts over $50 million each. The cost to the Province, if any, cannot be determined because the outcome of these actions is
uncertain.
Debt
Selected Characteristics by Type of Issue
As at March 31, 2005
Average
Average Annual Cost Average Annual
As a PercentageTerm to to the Rate of Growth
of Total Maturity Province 2001-2005
(%) (Years) (%) (%)
Debt
Publicly Held Debt
Debentures & Bonds(1)....................................................... 70.0 9.8 5.7 5.1
Treasury Bills.............................................................. 2.1 0.3 3.2 (7.9)
Non-Publicly Held Debt
Canada Pension Plan......................................................... 5.6 8.9 8.6 (4.8)
Ontario Teacher's Pension Fund.............................................. 4.8 3.4 11.7 (6.7)
Ontario Public Service Employees' Union Pension Plan (“OPSEU”).............. 0.7 6.0 12.1 (4.0)
Public Service Pension Fund................................................. 1.6 6.0 12.1 (4.0)
Canada Mortgage and Housing Corporation..................................... 0.5 14.9 7.3 (3.2)
Ontario Municipal Employees' Retirement Fund................................ 0.1 1.8 9.8 (30.2)
Other....................................................................... 0.6 22.7 4.9 64.4
86.0 9.2 6.4
Other Liabilities............................................................. 14.0 N/A — (3.6)
Total......................................................................... 100.0 N/A N/A 1.6
__________
(1) All balances are expressed in Canadian dollars. The balances above reflect the effect of related derivatives contracts entered
into by the Province. See “4. Public Debt — (5) Financial Tables — I. Summary of Net Debt and Accumulated Deficit — Risk
Management and Derivative Financial Instruments”.
Debt Record
The Province has never defaulted on the payment of principal or interest on any of its obligations. Payments have been made when
due, subject during wartime to any applicable laws and regulations forbidding such payments.
Debt Maturity and Interest Charges
As at March 31, 2005, approximately 53.6% of the total debt issued for provincial purposes and OEFC Program was scheduled to
mature within the next five years and 72.1% within the next 10 years. Interest charges on total debt were $9,368 million for 2004-05
and are estimated to be $9,571 million for fiscal 2005-06 on an accrual and consolidation basis of accounting.
Debt Maturity Schedule
As at March 31, 2005
Total Debt(1)
Publicly HelNon-Publicly
Year Ending March 31, Debt Held Debt Total % Of Total
(in millions)
2006.............................................................................. $ 21,456 $ 2,617 $ 24,073 15.4
2007.............................................................................. 12,821 2,043 14,864 9.5
2008.............................................................................. 9,941 2,836 12,777 8.2
2009.............................................................................. 16,734 2,542 19,276 12.3
2010.............................................................................. 9,813 2,945 12,758 8.2
2006-2010......................................................................... 70,765 12,983 83,748 53.6
2011-15........................................................................... 21,623 7,371 28,994 18.5
2016-20........................................................................... 1,620 1,376 2,996 1.9
2021-25........................................................................... 6,903 3,253 10,156 6.5
2026-30........................................................................... 14,775 218 14,993 9.6
2031-55........................................................................... 15,302 188 15,490 9.9
$ 130,988 $ 25,389 $ 156,377 100.0
__________
(1) All balances are expressed in Canadian dollars. The balances above reflect the effect of related derivatives contracts entered
into by the Province. See “4. Public Debt — (5) Financial Tables — I. Summary of Net Debt and Accumulated Deficit — Risk
Management and Derivative Financial Instruments”.
(3) Consolidated Debt of the Ontario Public Sector
Overview
While centralized financing is prominent in Ontario, not all funding of the public sector is shown on the Province's financial
statements. Since the responsibilities assigned to the Canadian provinces by the Constitution are uniform (although not all provinces
have chosen to assume the same set of responsibilities), interprovincial comparisons are more clearly facilitated by the presentation
of the consolidated debt. This method of presenting public sector debt is not affected by the degree of centralization or
decentralization of Provincial public sector financing. Included in the total is the debt of municipalities with separate revenue
sources, and all of the sector's revenue sources under provincial jurisdiction.
Consolidated Debt of the Ontario Public Sector
As at
March 31, 2005 % Of Total
(in millions)
Net Debt(1).......................................................................................... $ 140,662 90.5
Obligations Guaranteed(2)............................................................................ 3,200 2.1
Other Public Sector Debt(3).......................................................................... 12,863 7.4
Total Consolidated Debt of the Ontario Public Sector................................................. $ 156,725 100.00
__________
Source: Ontario Ministry of Finance.
(1) Net debt represents the difference between liabilities and financial assets. Net debt does not take into account tangible
capital assets of $14,919 million as at March 31, 2005 (2004, $14,369 million) as these assets are used to provide services and
are not available to discharge liabilities.
(2) A provision of $409 million as at March 31, 2005 (2004, $397 million) based on an estimate of the likely loss arising from
guarantees under the Ontario Student Support Program has been expensed and is reflected in the accrued liabilities for transfer
payments.
(3) Other Public Sector Debt comprises local government debt of $6,822 million and schools', colleges', universities' and hospitals'
debt of $6,041 million.
(4) Selected Debt Statistics
The following table examines the Consolidated Debt of the Ontario Public Sector in absolute terms and in relation to certain
provincial economic indicators.
Consolidated Debt of the Ontario Public Sector
Average
Annual
Rate of
Growth
As at March 31, 2001-2005
2001 2002 2003 2004 2005 %
(in millions unless otherwise indicated)
Consolidated Debt............................................. $ 142,546 $ 142,121 $ 146,451 $ 151,661 $ 156,725 1.6
Consolidated Debt per Capita.................................. 12,186 11,948 12,135 12,393 12,632 0.1
Consolidated Debt/Personal Income (%)......................... 41.1 39.5 39.5 39.8 39.6 (2.4)
Consolidated Debt/GDP (%)..................................... 32.9 32.0 31.4 30.7 30.3 (3.1)
__________
Sources: Ontario Ministry of Finance.
The Canadian Dollar
Recent high and low exchange rates for the Canadian dollar in terms of United States cents are as follows:
Jan 1-
Nov 25
2000 2001 2002 2003 2004 2005
High.................................................................................. 69.02 66.95 66.18 77.38 84.93 86.13
Low................................................................................... 64.84 62.42 61.99 63.31 71.59 78.72
__________
Source: Bank of Canada.
(5) Financial Tables
I. Summary of Net Debt and Accumulated Deficit
As at March 31,
2001 2002 2003 2004 2005
(in millions)
Non-Publicly Held Debt
Minister of Finance of Canada:
Canada Pension Plan............................................. $ 12,709 $ 11,944 $ 10,746 $ 10,233 $ 10,233
Ontario Teachers' Pension Fund.........................................11,535 11,043 10,387 9,487 8,666
Canada Mortgage and Housing Corporation.................................1,147 1,116 1,078 1,047 1,003
Public Service Pension Fund.............................................3,446 3,331 3,200 3,052 2,886
Ontario Public Service Employees' Union (“OPSEU”)
Pension Fund..........................................................1,637 1,582 1,520 1,450 1,371
Other................................................................... 657 581 356 1,096 1,230
$ 31,131 $ 29,597 $ 27,287 $ 26,365 $ 25,389
Publicly Held Debt
Debentures and Bonds(1)...........................................$....99,008 $ 99,990 $ 102,958 $ 116,732 $ 125,280
Treasury Bills..........................................................4,814 5,108 6,274 3,359 3,747
U.S. Commercial Paper(1)................................................ 959 1,566 1,515 1,156 269
Ontario Strategic Financing Authority (“OSIFA”)......................... — — — 323 1,288
Other................................................................... 447 447 438 422 404
Deposits with the Province of Ontario Savings Office
(“POSO”)(2)..........................................................2,482 2,438 — — —
$ 107,710 $ 109,549 $ 111,185 $ 121,992 $ 130,988
Total Debt..........................................................$...138,841 $ 139,146 $ 138,472 $ 148,357 $ 156,377(5)
Other Net (Assets)/Liabilities(3)........................................(6,345) (7,025) (5,825) (9,800) (15,715)
Net Debt............................................................$...132,496 $ 132,121 $ 132,647 $ 138,557 $ 140,662
Less: Tangible Capital Assets(4).......................................... — — (13,942) (14,369) (14,919)
Accumulated Deficit.................................................$...132,496 $ 132,121 $ 118,705 $ 124,188 $ 125,743
__________
Source: Ontario Ministry of Finance
(1) All balances are expressed in Canadian dollars. The balances above reflect the effect of related derivative contracts entered
into by the Province. See “4. Public Debt — (5) Financial Tables — I. Summary of Net Debt and Accumulated Deficit — Risk
Management and Derivative Financial Instruments”.
(2) The Province of Ontario Savings Office was sold for $48.5 million on March 31, 2003.
(3) Other Net (Assets)/Liabilities include Accounts Receivable, Loan Receivable (including municipal loans by OSIFA), Advances and
Investments in Government business enterprises, Accounts Payable, Accrued Liabilities, and the elimination of the liability for
Power Purchase Agreements with non-utility generators.
(4) Starting with fiscal year 2002-03, Tangible Capital Asset are capitalized and amortized over their estimated useful lives. In
2001-02 and prior years, the costs of Tangible Capital Assets were recognized as expenditures.
(5) See “4. Public Debt — (5) Financial Tables — Public Accounts, 2004-2005 — Volume 1 — II. Outstanding Debt Issued”.
Risk Management and Derivative Financial Instruments
The Province employs various risk management strategies and operates within strict risk exposure limits to ensure exposure to risk
is managed in a prudent and cost effective manner. A variety of strategies are used, including the use of derivatives.
Derivatives are financial contracts, the value of which is derived from underlying instruments. The Province uses derivatives to
hedge and to minimize interest costs. Hedges are created primarily through swaps, which are legal arrangements under which the
Province agrees with another party to exchange cash flows based upon one or more notional amounts using stipulated reference interest
rates for a specified period. Swaps allow the Province to offset its existing obligations and thereby effectively convert them into
obligations with more desirable characteristics. Other derivative instruments used by the Province include forward foreign exchange
contracts, forward rate agreements, futures, options, caps and floors.
Foreign exchange or currency risk is the risk that foreign currency debt principal and interest payments and foreign currency
transactions will vary in Canadian dollar terms due to fluctuations in foreign exchange rates. To manage currency risk, the Province
uses derivative contracts including foreign exchange forward contracts, futures, options and swaps to convert foreign currency cash
flows into Canadian dollar denominated cash flows. Most of the derivative contracts hedge the underlying debt by matching all the
critical terms to achieve effectiveness. In the instances where the term of foreign exchange forward contracts used for hedging is
shorter than the term of the underlying debt, the effectiveness is maintained by continuously rolling the foreign exchange forward
contract over the remaining term of the underlying debt, or until replaced with a long-term derivative contract.
The current policy allows the net amount of unhedged foreign currency debt principal payments and foreign currency holdings to
reach a maximum of 5 per cent of Debt Issued for Provincial Purposes and OEFC debt. At March 31, 2005, the respective unhedged levels
were 0.8 and 0.1 per cent (2004, 1.2 and 0.1 per cent). For every one-cent increase in the Canadian dollar versus the U.S. dollar,
there would be an increase in debt amount of $3 million (2004, $6 million) and an increase in Interest on Debt of $1.4 million (2004,
$2 million). For every one Japanese yen decrease versus the Canadian dollar, there would be an increase in debt amount of $9 million
(2004, $11 million) and an increase in Interest on Debt of $2.1 million (2004, $2.5 million). Total foreign exchange gains recognized
in the Statement of Operations for 2004-05 were $56 million (2003-04, $42 million).
Debt servicing costs may also vary as a result of changes in interest rates. In respect of Debt Issued for Provincial Purposes,
the risk is measured as interest rate resetting risk which is the net amount of floating rate exposure, liquid reserves and fixed
rate debt maturing within the next 12-month period as a percentage of Debt Issued for Provincial Purposes. In respect of OEFC debt,
the risk is the floating rate exposure as a percentage of OEFC debt. Depending on market conditions, the Province creates or reduces
its exposure to interest rate changes by issuing or retiring short-term debt, or by entering into or closing out derivative
positions. The current policy limits interest rate resetting risk for Debt Issued for Provincial Purposes to a maximum of 25 per cent
and floating rate risk for OEFC debt to a maximum of 20 per cent.
As at March 31, 2005, interest rate resetting risk for Debt Issued for Provincial Purposes was 10.2 per cent (2004, 11.4 per cent)
while floating rate risk for OEFC debt was 8.5 per cent (2004, 8.0 per cent). Based on floating rate interest-bearing financial
instruments on hand at the balance sheet date plus planned issues for the coming year, a one per cent (100 basis points) increase in
interest rates would result in an increase in Interest on Debt of $250 million compared to $150 million a year ago.
Liquidity risk is the risk that the Province will not be able to meet its current short-term financial obligations. To reduce
liquidity risk, the Province maintains liquid reserves, that is, cash and temporary investments, at levels that will meet future cash
requirements and will give the Province flexibility in the timing of issuing debt. In addition, the Province has short-term note
programs as alternative sources of liquidity.
The table below presents a maturity schedule of the Province's derivatives, by type, outstanding at March 31, 2005, based on the
notional amounts of the contracts. Notional amounts represent the volume of outstanding derivative contracts and are not indicative
of credit risk, market risk or actual cash flows.
Derivative Portfolio Notional Value
As at March 31,
6-10 Over 10 2005 2004
Maturity in Fiscal Year 2006 2007 2008 2009 2010 Years Years Total Total
(in millions)
Swaps:
Interest Rate.......................$. 13,567 $ 7,710 $ 10,747 $ 11,055 $ 7,803 $ 15,072 $ 3,162 $ 69,116 $ 55,013
Cross Currency........................ 8,903 4,625 4,469 4,635 4,482 3,833 — 30,947 30,622
Forward Foreign Exchange Contracts...... 5,241 — — — — — — 5,241 2,755
Caps and Floors......................... 275 398 — — 88 — — 761 480
Futures................................. 62 — — — — — — 62 62
Options................................. — — — — — — — — 90
TOTAL.................................$. 28,048 $ 12,733 $ 15,216 $ 15,690 $ 12,373 $ 18,905 $ 3,162 $ 106,127 $ 89,022
The use of derivatives introduces credit risk, which is the risk of a counterparty defaulting on contractual derivative
obligations in which the Province has an unrealized gain. The table below presents the credit risk associated with the derivative
financial instrument portfolio, measured through the replacement value of derivative contracts, at March 31, 2005.
Credit Risk Exposure
As at March 31,
2005 2004
(in millions)
Gross Credit Risk Exposure(1)................................................................................ $ 1,865 $ 2,625
Less: Netting(2)............................................................................................. (1,618) (2,264)
Net Credit Risk Exposure..................................................................................... $ 247 $ 361
__________
Note:
(1) Gross credit risk exposure is the gross credit exposure to counterparties with net positive exposures (that is, the Province has
an unrealized gain).
(2) “Netting” is the gross negative credit exposure to counterparties with net positive credit exposures covered by master
agreements providing for close out netting when contracts do not have co-terminus settlement dates.
The Province manages its credit risk exposure from derivatives by, among other things, dealing only with high credit quality
counterparties and regularly monitoring compliance to credit limits. In addition, the Province enters into contractual agreements
(“master agreements”) that provide for termination netting and if applicable payment netting with virtually all of its counterparties.
Gross credit risk exposure represents the loss that the Province would incur if every counterparty to which the Province had credit
risk exposure were to default at the same time, and the contracted netting provisions were not exercised or could not be enforced.
Net credit risk exposure is the loss including the mitigating impact of these netting provisions.
PUBLIC ACCOUNTS, 2004-2005 — VOLUME 1
II. OUTSTANDING DEBT ISSUED
As at March 31, 2005
Date of Date of Interest
Maturity Issue Series Rate Outstanding Reference
% $
Debt Issued for Provincial Purposes
PAYABLE IN CANADA IN CANADIAN DOLLARS
NON-PUBLICLY HELD DEBT
To Ontario Teachers' Pension Fund:
Year ending March 31
2006 1985-1991 TI 11.07 to 14.40 1,070,000,000
2007 1985-1991 TI 10.26 to 13.01 1,185,000,000
2008 1983-1991 TI 10.15 to 15.38 1,945,000,000
2009 1986-1991 TI 10.98 to 11.50 1,465,000,000
2010 1986-1991 TI 10.22 to 11.24 1,236,000,000
2011 1987 TI 10.11 to 10.32 560,000,000
2012 1988-1991 TI 10.68 to 11.24 580,000,000
2013 1989-1991 TI 11.06 to 11.31 625,000,000
8,666,000,000
To Minister of Finance of Canada
Canada Pension Plan Investment Fund:
Year ending March 31
2006 1986 CPP 10.58 to 12.57 1,213,502,000
2007 1987 CPP 9.36 to 10.17 232,269,000
2008 1988 CPP 10.79 42,300,000
2012 1992 CPP 9.81 to 10.04 987,249,000
2013 1993 CPP 9.17 to 9.45 700,137,000
2019 1999 CPP 5.81 to 5.84 45,270,000
2020 1999 CPP 5.50 to 6.91 869,889,000
2021 2000 CPP 6.33 to 6.67 609,834,000
2022 2001 CPP 6.17 to 6.47 330,994,000
2024 2004 CPP 5.26 to 5.97 688,007,000
2025 2005 CPP 5.15 to 5.79 1,133,182,000
6,852,633,000 (5)
To Public Service Pension Fund:
Year ending March 31
2006 1997 OPB 11.05 to 13.33 86,106,258
2007 1997 OPB 11.16 to 13.33 188,766,466
2008 1997 OPB 15.38 218,362,903
2009 1997 OPB 12.79 264,512,886
2010 1997 OPB 12.88 273,669,452
2011 1997 OPB 13.33 282,994,558
2012 1997 OPB 11.55 336,229,108
2013 1997 OPB 10.38 374,479,804
2014 1997 OPB 11.10 409,677,031
2015 1997 OPB 11.19 450,938,707
2,885,737,174 (65)
To Public Service Employees' Union Pension Fund:
Year ending March 31
2006 1997 OPPT 11.05 to 13.33 40,905,175
2007 1997 OPPT 11.16 to 13.33 89,674,381
2008 1997 OPPT 15.38 103,734,305
2009 1997 OPPT 12.79 125,658,067
2010 1997 OPPT 12.88 130,007,936
2011 1997 OPPT 13.33 134,437,870
2012 1997 OPPT 11.55 159,727,189
2013 1997 OPPT 10.38 177,898,359
2014 1997 OPPT 11.10 194,618,964
2015 1997 OPPT 11.19 214,220,513
1,370,882,759 (65)
To Ontario Housing Corporation:
Year ending March 31
2010 1994 OHC 8.264 to 9.215 422,388,939
2011 1994 to 1995 OHC 8.242 to 9.898 694,880,091
2012 1995 OHC 9.655 33,382,267
2013 1995 OHC 9.655 6,561,000
1,157,212,297 (96)
To Canada Mortgage and Housing Corporation:
Year ending March 31
2000-2006 1973 to 1976 CMHC 5.125 to 10.375 195,429
2000-2007 1974 to 1977 CMHC 5.375 to 10.375 1,096,628
2000-2010 1970 to 1975 CMHC 5.75 to 6.875 1,147,635
2000-2011 1971 to 1976 CMHC 5.375 to 8.25 2,278,202
2000-2012 1972 CMHC 6.875 to 8.25 3,042,528
2000-2013 1973 CMHC 7.25 to 8.25 599,232
2000-2014 1974 CMHC 6.125 to 8.25 9,843,879
2000-2015 1975 CMHC 7.50 to 10.375 6,346,708
2000-2016 1976 CMHC 5.375 to 10.75 13,885,252
2000-2017 1977 CMHC 7.625 to 10.75 10,542,446
2000-2018 1977 to 1978 CMHC 7.625 to 13.00 27,614,998
2000-2019 1977 to 1980 CMHC 7.625 to 15.25 31,810,528
2000-2020 1978 to 1980 CMHC 7.625 to 15.75 51,327,166
2000-2021 1981 CMHC 9.50 to 15.75 24,927,660
2000-2022 1982 CMHC 9.75 to 15.75 1,000,150
185,658,441 (7)
To Ontario Municipal Employees Retirement Fund:
Year ending March 31
2007 1996 MER 9.77 102,675,000
102,675,000
To Ontario Immigrant Investor Corporation:
Year ending March 31
2006 2005 OIIC 62 1 CBA-0.09 800,000
2006 2003 OIIC 04-14 Zero 6,480,212 (123)
2007 2003 OIIC 15-25 Zero 17,760,419 (123)
2008 2003 OIIC 26-38 Zero 21,319,044 (123)
2009 2004 OIIC 39-51 Zero 21,625,522 (123)
2010 2005 OIIC 52-63 Zero 125,949,904 (123)
193,935,101
To Colleges of Applied Arts & Technology Pension Plan:
Year ending March 31
2007 1996 CAAT 9.77 18,625,000
18,625,000
To Ryerson Retirement Pension Plan:
Year ending March 31
2006 1995 RRPF 11.16 1,464,199
2007 1995 RRPF 9.64 1,618,485
3,082,684
TOTAL NON-PUBLICLY HELD DEBT........................................................................................... 21,436,441,456
PAYABLE IN CANADA IN CANADIAN DOLLARS
PUBLICLY HELD DEBT
Apr. 18, 2005 Apr. 17, 2003 DMTN64 Step-up 25,000,000 (11)
Apr. 25, 2005 Apr. 25, 2003 DMTN65 Step-up 25,000,000 (6)
May 20, 2005 May 20, 2003 DMTN66 Step-up 25,000,000 (18)
May 26, 2005 May 26, 2003 DMTN68 Step-up 40,000,000 (22)
June 2, 2005 June 2, 2003 DMTN67 Step-up 25,000,000 (25)
June 27, 2005 June 27, 2003 DMTN71 Step-up 25,000,000 (31)
July 18, 2005 July 18, 2003 DMTN75 Step-up 135,000,000 (42)
Aug. 5, 2005 Aug. 5, 2003 DMTN74 Step-up 45,000,000 (44)
Aug. 25, 2005 Aug. 25, 2003 DMTN77 Step-up 30,000,000 (49)
Sep. 4, 2005 Sep. 4, 2003 DMTN80 Step-up 28,000,000 (32)
Sep. 10, 2005 Sep. 10, 2003 DMTN81 Step-up 25,000,000 (36)
Sep. 26, 2005 Sep. 26, 2003 DMTN84 Step-up 43,000,000 (52)
Nov. 21, 2005 Nov. 20, 2001 DMTN24 Step-up 100,000,000 (95)
Dec. 1, 2005 Sep. 13, 1995 JP 8.25 1,000,000,000
Dec. 1, 2005 Dec. 1, 2003 DMTN88 Step-up 35,000,000 (71)
Dec. 5, 2005 Dec. 5, 2001 DMTN30 Step-up 50,000,000 (110)
Jan. 16, 2006 Jan. 16, 2004 DMTN94 3 CBA+0.1 100,000,000 (73)
Jan. 20, 2006 Jan. 20, 2004 DMTN95 3 CBA+0.1 75,000,000 (74)
Jan. 26, 2006 Jan. 26, 2004 DMTN91 Step-up 25,000,000 (75)
Jan. 27, 2006 Jan. 27, 2004 DMTN92 Step-up 28,000,000 (77)
Feb. 1, 2006 Feb. 1, 1999 MJ 5.00 90,000,000
Feb. 1, 2006 Feb. 1, 2002 DMTN34 3 CBA+0.03 600,000,000 (105)
Feb. 12, 2006 Feb. 12, 2004 DMTN98 Step-up 25,000,000 (78)
Feb. 20, 2006 Feb. 20, 1996 JZ 17.25 107,000,000 (40)
Mar. 8, 2006 Oct. 26, 2000 NL 5.90 1,000,000,000
Mar. 19, 2006 Mar. 19, 2004 DMTN101 Step-up 30,000,000 (87)
Mar. 24, 2006 Mar. 24, 2004 DMTN104 Step-up 64,000,000 (94)
Mar. 26, 2006 Mar. 26, 2004 DMTN103 Step-up 30,000,000 (101)
May 1, 2006 Sep. 22, 2004 DMTN76 3 CBA 650,000,000
May 3, 2006 May 3, 2004 DMTN108 Step-up 25,000,000 (132)
May 5, 2006 May 5, 2004 DMTN107 Step-up 60,000,000 (133)
May 30, 2006 Oct. 2, 2003 DMTN86 3 CBA 58,000,000 (16)
July 2, 2006 July 2, 2004 DMTN115 Step-up 35,000,000 (102)
July 7, 2006 July 7, 2004 DMTN114 Step-up 26,000,000 (100)
July 24, 2006 July 24, 1996 KE 7.75 700,000,000
Sep. 7, 2006 Sep. 7, 2004 DMTN118 Step-up 31,000,000 (85)
Sep. 8, 2006 Aug. 17, 2004 DMTN78 3.50 500,000,000
Sep. 20, 2006 Sep. 20, 2004 DMTN121 Step-up 25,000,000 (120)
Sep. 22, 2006 Sep. 22, 2004 DMTN122 3 CBA-0.02 50,000,000 (113)
Sep. 27, 2006 Sep. 27, 2004 DMTN124 1 CBA-0.01 250,000,000 (86)
Oct. 1, 2006 Oct. 1, 2004 DMTN123 Step-up 25,000,000 (76)
Oct. 14, 2006 Oct. 14, 2004 DMTN127 Step-up 25,000,000 (33)
Oct. 27, 2006 Oct. 27, 2004 DMTN125 Step-up 25,000,000 (99)
Oct. 27, 2006 Oct. 27, 2004 DMTN128 Step-up 25,000,000 (2)
Oct. 29, 2006 Oct. 29, 2004 DMTN129 Step-up 35,000,000 (3)
Dec. 15, 2006 Dec. 15, 2003 DMTN90 3 CBA+0.12 50,000,000 (103)
Jan. 12, 2007 Jan. 12, 1995 JF 9.50 132,950,000 (21)
Jan. 19, 2007 Jan. 19, 2005 DMTN134 Step-up 35,000,000 (48)
Jan. 29, 2007 Jan. 29, 2004 DMTN97 3 CBA+0.155 155,000,000 (104)
Jan. 28, 2007 Jan. 31, 2005 DMTN137 Step-up 30,000,000 (26)
Feb. 25, 2007 Feb. 25, 2005 DMTN139 Step-up 25,000,000 (81)
Mar. 8, 2007 Sep. 11, 2001 DMTN16 5.20 2,000,000,000 (72)
June 18, 2007 Jan. 26, 2004 DMTN96 3 CBA 150,000,000 (106)
Sep. 12, 2007 Sep. 12, 1997 LE 6.125 1,660,000,000 (130)
Dec. 10, 2007 Dec. 10, 1997 LH 5.875 66,475,000
Jan. 25, 2008 Jan. 25, 2005 DMTN136 3 CBA+0.19 50,000,000 (50)
May 30, 2008 May 30, 2003 DMTN70 3 CBA+0.03 1,025,000,000 (53)
June 3, 2008 June 3, 1999 MN 5.75 50,000,000 (46)
July 15, 2008 Feb. 6, 1998 LM 5.50 75,000,000
Sep. 4, 2008 Sep. 4, 1998 LW 6.30 50,000,000
Sep. 12, 2008 Sep. 12, 2003 DMTN82 4.935 62,000,000 (119)
Oct. 1, 2008 Oct. 1, 2003 DMTN85 3 CBA+0.03 1,860,000,000 (68)(107)
Nov. 19, 2008 Nov. 12, 2003 DMTN87 4.40 500,000,000
Dec. 1, 2008 Sep. 15, 1998 LZ 5.70 1,550,000,000
Dec. 1, 2008 Mar. 5, 2002 DMTN39 3 CBA+0.59 150,000,000 (116)
Mar. 2, 2009 Mar. 2, 2004 DMTN100 3 CBA+0.025 275,000,000
Mar. 8, 2009 Mar. 11, 2004 DMTN102 Step-up 174,000,000 (128)
April 6, 2009 Mar. 24, 2005 DMTN143 3 CBA+0.01 500,000,000
May 19, 2009 Apr. 20, 2004 DMTN106 4.00 750,000,000
Aug. 13, 2009 Mar. 2, 2004 DMTN99 3.21 124,644,389 (124)
Nov. 7, 2009 Nov. 9, 2004 DMTN130 3 CBA 900,000,000
Nov. 19, 2009 Mar. 19, 1999 MU 6.20 900,000,000
Dec. 14, 2009 Mar. 14, 2005 DMTN142 3 CBA+0.25 88,000,000 (108)
Nov. 19, 2010 Nov. 24, 2000 NK 6.10 1,620,000,000 (111)
Dec. 2, 2011 Feb. 27, 2002 DMTN08 6.10 1,000,000,000 (97)
July 7, 2012 May 8, 2002 DMTN46 Zero 10,330,561 (60)(98)
Dec. 2, 2012 Dec. 2, 2002 DMTN53 5.375 2,000,000,000
June 2, 2013 Sep. 22, 2003 DMTN69 4.75 1,030,000,000 (127)
Sep. 8, 2013 July 23, 2004 DMTN116 Step-up 100,000,000 (56)
Mar. 8, 2014 Jan. 12, 2004 DMTN93 5.00 2,500,000,000 (109)
Dec. 2, 2014 Dec. 2, 2004 MW 6.80 11,450,000 (34)
Mar. 8, 2015 Mar. 9, 2005 DMTN135 4.50 500,000,000 (135)
Sep. 1, 2015 Sep. 1, 2000 DMTN1 6.25 34,000,000 (45)
Dec. 2, 2016 Dec. 7, 2004 DMTN132 4.875 200,000,000
June 2, 2018 Aug. 28, 2003 DMTN79 5.50 150,000,000
June 2, 2019 Apr. 19, 2004 DMTN105 5.35 100,000,000
June 2, 2020 Feb. 22, 2005 DMTN140 4.85 171,000,000 (92)
Sep. 4, 2020 Sep. 4, 1998 LY 6.30 50,000,000
July 13, 2022 July 13, 1992 HC 9.50 1,590,438,000
Sep. 8, 2023 Sep. 8, 1993 HP 8.10 940,570,000 (59)
June 2, 2025 Dec. 20, 1994 JE 9.50 500,000,000
Dec. 2, 2025 Oct. 5, 1995 JQ 8.50 1,000,000,000
Feb. 6, 2026 Feb. 6, 1996 JY 8.00 12,500,000
June 2, 2026 Dec. 21, 1995 JU 8.00 1,000,000,000
Dec. 2, 2026 Feb. 13, 1997 KR 8.00 386,500,000
Dec. 2, 2026 Jan. 20, 1999 MH 7.00 124,584,000 (90)
Feb. 3, 2027 Aug. 5, 1997 KN 7.50 58,220,000
Feb. 3, 2027 Aug. 5, 1997 KT 6.95 8,726,000
Feb. 3, 2027 Aug. 1, 1997 KY 7.50 11,549,000
Feb. 3, 2027 Dec. 4, 1998 LA 7.50 5,507,000
Feb. 4, 2027 Feb. 4, 1998 KQ 7.375 990,000
June 2, 2027 Oct. 17, 1996 KJ 7.60 4,734,700,000 (61)
Aug. 25, 2028 Feb. 25, 1998 LQ 6.25 2,020,000
Mar. 8, 2029 Jan. 8, 1998 LK 6.50 4,727,000,000 (63)
Jan. 13, 2031 Sep. 8, 1995 JN 9.50 125,000,000
Jan. 15, 2031 Mar. 8, 2005 DMTN141 5.20 230,000,000
June 2, 2031 Mar. 27, 2000 NF 6.20 2,500,000,000
Mar. 8, 2033 Feb. 17, 2003 DMTN61 5.85 4,500,000,000 (58)
Mar. 8, 2033 Apr. 29, 2004 DMTN110 Step-up 200,000,000 (115)
Nov. 3, 2034 Nov. 3, 1994 HY 9.75 280,000,000
Jan. 10, 1995 to
Jan. 10, 2035 Nov. 30, 1994 HZ 9.4688 2,315,904 (24)
— — JA 9.4688 13,990,865 (24)(82)
— — JB 9.4688 8,482,324 (24)
— — JC 9.4688 4,764,354 (24)
— — JD 9.4688 3,171,134 (24)
Feb. 8, 2035 Feb. 8, 1995 JJ 9.875 73,000,000 (19)
June 2, 2035 Aug. 25, 2004 DMTN119 5.60 3,500,000,000
June 2, 2035 Jan. 12, 2005 DMTN133 Step-up 150,000,000 (38)
June 20, 2036 June 28, 1996 KC 8.25 211,000,000
Dec. 2, 2037 Feb. 1, 2005 DMTN138 5.20 100,000,000
June 2, 2038 July 28, 2004 DMTN117 10.00 75,000,000 (134)
June 20, 2038 Sep. 16, 1996 KG 8.10 120,000,000
July 13, 2038 July 29, 1998 LS 5.75 50,000,000
Aug. 25, 2038 Aug. 17, 1998 LT 6.00 100,000,000
July 13, 2039 Feb. 2, 1999 MK 5.65 300,000,000
Dec. 2, 2039 Feb. 25, 2000 NE 5.70 773,700,000 (64)
July 13, 2040 Apr. 18, 2002 DMTN44 6.20 50,000,000
Dec. 2, 2041 Aug. 15, 2001 DMTN10 6.20 290,000,000
Mar. 8, 2042 Dec. 4, 2001 DMTN29 6.00 41,000,000
June 2, 2042 Jan. 18, 2002 DMTN33 6.00 240,000,000
June 2, 2043 Feb. 24, 2003 DMTN62 5.75 50,000,000
Jan. 10, 2045 May 25, 1995 JL 8.435 35,531,176 (41)
Mar. 1, 2045 Mar. 1, 1995 JK 9.50 150,000,000 (20)
58,520,109,707
ONTARIO SAVINGS BONDS
Mar. 1, 2000 Mar. 1, 1995 Annual Variable 1,104,000 (29)
Mar. 1, 2000 Mar. 1, 1995 Compound Variable 2,218,950 (29)
June 21, 2000 June 21, 1997 Annual 5.25 198,700 (29)
June 21, 2000 June 21, 1997 Compound 5.25 96,700 (29)
June 21, 2001 June 21, 1996 Annual Step-Up 399,400 (29)
June 21, 2001 June 21, 1996 Compound Step-Up 1,144,200 (29)
June 21, 2001 June 21, 1996 Annual Variable 386,900 (29)
June 21, 2001 June 21, 1996 Compound Variable 134,100 (29)
June 21, 2001 June 21, 1998 Annual 5.25 124,000 (29)
June 21, 2001 June 21, 1998 Compound 5.25 240,100 (29)
June 21, 2002 June 21, 1999 Annual 5.50 281,300 (29)
June 21, 2002 June 21, 1999 Compound 5.50 892,100 (29)
June 21, 2003 June 21, 1998 Compound Step-Up 2,035,200 (29)
June 21, 2003 June 21, 1998 Annual Step-Up 876,600 (29)
June 21, 2003 June 21, 2000 Annual 6.50 1,015,900 (29)
June 21, 2003 June 21, 2000 Compound 6.50 1,288,400 (29)
June 21, 2004 June 21, 1997 Annual Step-Up 3,490,400 (29)
June 21, 2004 June 21, 1997 Compound Step-Up 4,234,550 (29)
June 21, 2004 June 21, 1997 Annual Variable 257,700 (29)
June 21, 2004 June 21, 1997 Compound Variable 221,700 (29)
June 21, 2004 June 21, 1999 Compound Step-Up 6,191,000 (29)
June 21, 2004 June 21, 1999 Annual Step-Up 2,766,800 (29)
June 21, 2004 June 21, 2001 Annual 5.50 5,098,600 (29)
June 21, 2004 June 21, 2001 Compound 5.50 9,599,300 (29)
June 21, 2005 June 21, 1998 Annual Variable 35,092,800 (67)
June 21, 2005 June 21, 1998 Compound Variable 46,805,100 (67)
June 21, 2005 June 21, 2000 Annual Step-Up 717,706,800 (66)
June 21, 2005 June 21, 2000 Compound Step-Up 573,683,950 (66)
June 21, 2005 June 21, 2002 Annual 4.625 540,403,000 (30)
June 21, 2005 June 21, 2002 Compound 4.625 489,335,000 (30)
June 21, 2006 June 21, 1999 Compound Variable 41,329,800 (67)
June 21, 2006 June 21, 1999 Annual Variable 24,375,300 (67)
June 21, 2006 June 21, 2001 Annual Step-Up 878,063,400 (66)
June 21, 2006 June 21, 2001 Compound Step-Up 1,026,634,400 (66)
June 21, 2006 June 21, 2003 Annual 3.45 271,910,600 (30)
June 21, 2006 June 21, 2003 Compound 3.45 241,340,700 (30)
June 21, 2007 June 21, 2000 Compound Variable 60,561,850 (67)
June 21, 2007 June 21, 2000 Annual Variable 36,688,400 (67)
June 21, 2007 June 21, 2002 Annual Step-Up 205,611,700 (66)
June 21, 2007 June 21, 2002 Compound Step-Up 227,091,200 (66)
June 21, 2007 June 21, 2004 Annual 3.30 105,262,400 (30)
June 21, 2007 June 21, 2004 Compound 3.30 93,487,700 (30)
June 21, 2008 June 21, 2001 Annual Variable 32,450,000 (67)
June 21, 2008 June 21, 2001 Compound Variable 45,985,500 (67)
June 21, 2008 June 21, 2003 Annual Step-up 560,741,700 (66)
June 21, 2008 June 21, 2003 Compound Step-up 648,776,800 (66)
June 21, 2009 June 21, 2002 Annual Variable 53,271,400 (67)
June 21, 2009 June 21, 2002 Compound Variable 56,281,200 (67)
June 21, 2009 June 21, 2004 Annual Step-Up 352,900,800 (66)
June 21, 2009 June 21, 2004 Compound Step-Up 378,451,400 (66)
June 21, 2010 June 21, 2003 Annual Variable 117,522,400 (67)
June 21, 2010 June 21, 2003 Compound Variable 102,825,900 (67)
June 21, 2011 June 21, 2004 Annual Variable 36,400,600 (67)
June 21, 2011 June 21, 2004 Compound Variable 32,993,600 (67)
8,078,282,000 (62)
TOTAL PAYABLE IN CANADA IN CANADIAN DOLLARS............................................................................ 66,598,391,707
GLOBAL MARKET PAYABLE IN CANADIAN DOLLARS
Jan. 19, 2006 Jan. 19, 1996 JV 7.50 1,250,000,000 (39)
Feb. 7, 2024 Feb. 7, 1994 HS 7.50 1,106,700,000 (70)
TOTAL PAYABLE IN THE GLOBAL MARKET IN CANADIAN DOLLARS................................................................. 2,356,700,000
PAYABLE IN EUROPE IN CANADIAN DOLLARS
Sep. 27, 2005 Sep. 27, 1993 HQ 7.25 500,000,000
Dec. 1, 2005 Dec. 1, 1999 EMTN045 6.50 375,000,000
Jan. 23, 2006 Jan. 23, 2003 EMTN053 3.50 100,000,000
Aug. 9, 2006 Aug. 9, 2001 EMTN049 5.75 100,000,000
Sep. 10, 2007 Sep. 10, 2002 EMTN052 4.375 750,000,000
Dec. 31, 2007 Jan. 16, 2002 EMTN051 5.125 350,000,000
Apr. 17, 2008 Apr. 17, 2003 EMTN58 4.50 1,000,000,000
Jan. 17, 2009 Jan. 2, 2004 EMTN62 4.00 500,000,000
Jan. 22, 2009 Jan. 27, 1999 EMTN042 5.00 350,000,000
July 27, 2011 July 27, 2004 EMTN64 4.75 250,000,000
Nov. 30, 2011 Nov. 30, 2001 EMTN050 5.25 450,000,000
Apr. 17, 2013 Apr. 17, 2003 EMTN56 5.50 320,000,000
July 13, 2034 July 13, 1994 EMTN005 9.40 300,000,000
TOTAL PAYABLE IN EUROPE IN CANADIAN DOLLARS............................................................................ 5,345,000,000
PAYABLE IN THE UNITED STATES IN CANADIAN DOLLARS
Feb. 18, 2013 Feb. 18, 1993 HJ 9.24 250,000,000
TOTAL PAYABLE IN THE UNITED STATES IN CANADIAN DOLLARS................................................................. 250,000,000
PAYABLE IN THE UNITED STATES IN U.S. DOLLARS
June 30, 2005 Mar. 13, 2002 NP 4.20 250,000,000
TOTAL PAYABLE IN THE UNITED STATES IN U.S. DOLLARS..................................................................... 250,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $1.58850................................................................... 397,125,000 (10)
GLOBAL MARKET PAYABLE IN U.S. DOLLARS
Aug. 4, 2005 Aug. 4, 1995 JM 7.00 1,250,000,000
Dec. 15, 2005 Nov. 26, 2002 NT 2.625 481,691,920 (125)
Feb. 21, 2006 Feb. 21, 1996 KA 6.00 2,050,000,000
Dec. 26, 2006 Nov. 26, 2003 PA 2.650 1,000,000,000
July 16, 2007 July 16, 2004 PB 3.35 1,000,000,000
Sep. 17, 2007 Sep. 17, 2002 NR 3.50 1,000,000,000
Jan. 15, 2008 Nov. 26, 2004 PD 3.375 1,000,000,000
May 2, 2008 May 5, 2003 NY 3.125 500,000,000
Oct. 1, 2008 Oct. 1, 1998 MB 5.50 1,750,000,000
Oct. 21, 2009 Oct. 21, 2004 PC 3.625 1,000,000,000
Dec. 15, 2009 Oct. 1, 2002 NS 3.75 300,000,000
July 17, 2012 July 17, 2002 NQ 5.125 750,000,000
Feb. 15, 2013 Feb. 7, 2003 NU 4.375 500,000,000
Feb. 3, 2015 Feb. 3, 2005 PE 4.50 500,000,000
TOTAL PAYABLE IN THE GLOBAL MARKET IN U.S. DOLLARS..................................................................... 13,081,691,920
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $1.36783................................................................... 17,893,588,134 (43)
PAYABLE IN CANADA IN U.S. DOLLARS
Apr. 24, 2005 Apr. 24, 1995 DMTN1 6 LIBOR+0.0475 100,000,000
May 1, 2005 May 1, 1995 DMTN2 6 LIBOR+0.0475 100,000,000
May 9, 2005 May 9, 1995 DMTN3 6 LIBOR+0.0475 100,000,000
May 16, 2005 May 16, 1995 DMTN4 6 LIBOR+0.0475 100,000,000
July 26, 2006 April 26, 2004 DMTN109 3 LIBOR+0.053 68,000,000
Nov. 18, 2014 Nov. 18, 2004 DMTN131 4.50 300,000,000 (89)
TOTAL PAYABLE IN CANADA IN U.S. DOLLARS................................................................................ 768,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $1.29725................................................................... 996,286,000 (9)
PAYABLE IN EUROPE IN U.S. DOLLARS
Nov. 26, 2008 Nov. 26, 2004 EMTN68 Step-Up 30,000,000
TOTAL PAYABLE IN EUROPE IN U.S. DOLLARS................................................................................ 30,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $1.24400................................................................... 37,320,000 (17)
PAYABLE IN JAPAN IN JAPANESE YEN
Aug. 31, 2005 Aug. 31, 1995 YL011 3.10 25,000,000,000
Mar. 16, 2007 Mar. 18, 1997 KU 3.10 5,000,000,000 (54)
Mar. 16, 2007 Mar. 18, 1997 KV 3.25 15,000,000,000 (55)
July 18, 2007 July 18, 1997 YL012 2.615 10,000,000,000
Nov. 12, 2009 Nov. 12, 1999 YL014 2.00 10,000,000,000
July 28, 2014 July 28, 2003 YL015 0.76 5,000,000,000
TOTAL PAYABLE IN JAPAN IN JAPANESE YEN................................................................................. 70,000,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $0.012799.................................................................. 895,974,874 (14)
GLOBAL MARKET PAYABLE IN JAPANESE YEN
Jan. 25, 2010 Jan. 25, 2000 ND 1.875 50,000,000,000
TOTAL PAYABLE IN THE GLOBAL MARKET IN JAPANESE YEN..................................................................... 50,000,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $0.011446.................................................................. 572,312,136 (122)
PAYABLE IN EUROPE IN JAPANESE YEN
Sep. 8, 2005 Mar. 23, 1998 EMTN037 6.21 10,000,000,000
Sep. 19, 2005 Sep. 4, 1998 EMTN038 6.205 10,000,000,000
Aug. 29, 2006 Aug. 29, 1996 EMTN021 4.28 10,000,000,000 (57)
Mar. 26, 2007 Apr. 3, 1997 EMTN033 3.20 10,000,000,000 (47)
June 13, 2007 June 13, 1997 EMTN034 3.58 10,000,000,000 (79)
Feb. 25, 2008 Feb. 25, 1998 EMTN036 2.60 7,100,000,000 (80)
Nov. 19, 2009 Nov. 24, 1999 EMTN046 2.00 10,000,000,000
June 24, 2013 June 24, 2003 EMTN59 0.5 5,000,000,000
TOTAL PAYABLE IN EUROPE IN JAPANESE YEN................................................................................ 72,100,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $0.012458.................................................................. 898,187,123 (15)
PAYABLE IN EUROPE IN AUSTRALIAN DOLLARS
Mar. 7, 2008 Mar. 7, 2003 EMTN054 4.75 100,000,000
Apr. 23, 2013 Apr. 23, 2003 EMTN057 5.5 100,000,000
TOTAL PAYABLE IN EUROPE IN AUSTRALIAN DOLLARS.......................................................................... 200,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $0.80982................................................................... 161,964,820 (117)
PAYABLE IN EUROPE IN EUROS
Feb. 17, 2006 Feb. 17, 1999 EMTN043 3.50 27,000,000
July 29, 2008 July 29, 1996 KD 6.875 457,347,051 (121)
July 21, 2009 July 21, 1997 EMTN035 5.875 457,347,051 (118)
Mar. 12, 2010 Mar. 12, 2003 EMTN055 3.50 400,000,000
May 14, 2013 May 7, 2003 NZ 4.125 750,000,000
TOTAL PAYABLE IN EUROPE IN EUROS....................................................................................... 2,091,694,102
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $1.65967................................................................... 3,471,511,433 (27)
PAYABLE IN EUROPE IN SWISS FRANCS
Sept. 15, 2009 Sept. 15, 2004 EMTN66 2.00 250,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $0.02143................................................................... 255,357,142 (131)
GLOBAL MARKET PAYABLE IN NEW ZEALAND DOLLARS
Mar. 3, 2008 Mar. 3, 2003 NV 5.75 250,000,000
Dec. 3, 2008 Dec. 3, 1998 MF 6.25 250,000,000
TOTAL PAYABLE IN THE GLOBAL MARKET IN NEW ZEALAND DOLLARS.............................................................. 500,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $0.75575................................................................... 377,872,750 (69)
PAYABLE IN EUROPE IN POUND STERLING
July 28, 2009 July 28, 2004 EMTN65 5.375 200,000,000
TOTAL PAYABLE IN EUROPE IN POUNDS...................................................................................... 200,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $2.43535................................................................... 487,070,000 (114)
PAYABLE IN EUROPE IN HONG KONG DOLLARS
June 26, 2013 June 12, 2003 EMTN61 4.10 500,000,000
TOTAL PAYABLE IN EUROPE IN HONG KONG DOLLAR............................................................................ 500,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $0.17410................................................................... 87,051,195 (13)
TOTAL DEBENTURES AND BONDS............................................................................................. 101,081,712,314
TREASURY BILLS......................................................................................................... 3,256,703,000 (84)
U.S. COMMERCIAL PAPER (in U.S. Dollars)................................................................................ 140,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $1.48132................................................................... 207,384,802 (91)
TOTAL PUBLICLY HELD DEBT ISSUED........................................................................................ 104,545,800,116
OTHER DEBT
SCHOOL BOARD TRUST DEBT
Year ending March 31
2037 2004 5.9 891,000,000 (23)
Less: Sinking Fund Reserve............................................................................................. (14,854,160)
876,145,840
TOTAL DEBT ISSUED FOR PROVINCIAL PURPOSES.............................................................................. 126,858,387,412(83)
Consolidation and Other Adjustments.................................................................................... 2,000,720,947
TOTAL DEBT ISSUED FOR PROVINCIAL PURPOSES AFTER CONSOLIDATION AND OTHER ADJUSTMENTS.................................... 128,859,108,359
DEBT ISSUED FOR INVESTMENT PURPOSES:*
ONTARIO POWER GENERATION INC. ..................................................................................... 5,126,000,000
HYDRO ONE INC ..................................................................................................... 3,759,000,000
TOTAL DEBT ISSUED FOR INVESTMENT PURPOSES.............................................................................. 8,885,000,000 (126)
Debt Issued for Ontario Electricity Financial Corporation (OEFC)
PAYABLE IN CANADA IN CANADIAN DOLLARS
NON-PUBLICLY HELD DEBT
Canada Pension Plan Investment Fund
2007 1986 CPP 9.64 119,000,000
2008 1988 CPP 9.13 to 9.72 388,715,000
2009 1989 CPP 9.62 to 10.31 589,319,000
2010 1990 CPP 9.61 to 10.31 650,712,000
2021 2001 CPP 6.08 19,375,000
2022 2002 CPP 6.17 to 6.29 172,961,000
2023 2003 CPP 6.16 38,130,000
TOTAL PAYABLE IN CANADA IN CANADIAN DOLLARS............................................................................ 1,978,212,000 (5)
PAYABLE IN CANADA IN CANADIAN DOLLARS
PUBLICLY HELD DEBT
Mar. 8, 2006 Mar. 8, 2001 CDB-NLA 5.90 500,000,000
May 1, 2006 Aug. 1, 2003 DMTN76 3 CBA 720,000,000
June 1, 2006 Nov. 25, 2003 DMTN89 3 CBA 100,000,000
June 2, 2006 Apr. 29, 2004 DMTN111 3 CBA+0.15 110,500,000 (4)
Sep. 8, 2006 Sep. 16, 2003 DMTN78 3.50 1,000,000,000
Sep. 27, 2006 Sep. 27, 2004 DMTN124 1 CBA-0.01 100,000,000
Oct. 1, 2008 Feb. 13, 2004 DMTN85 3 CBA+0.03 736,000,000 (28)(107)
Dec. 1, 2008 Jan. 22, 1999 HC-LZ 5.70 650,000,000
May 19, 2009 Apr. 30, 2004 DMTN112 4.00 30,000,000 (8)
May 19, 2009 May 4, 2004 DMTN113 Step-up 25,000,000 (12)
Aug. 13, 2009 Feb. 13, 2004 DMTN99 3.21 623,221,944 (124)
Oct. 1, 2009 Oct. 5, 2004 DMTN126 3 CBA+0.03 350,000,000
Nov. 19, 2009 July 26, 2000 HC-MU 6.20 500,000,000
Nov. 19, 2010 Sep. 1, 2000 HC-NK 6.10 500,000,000
Mar. 15, 2011 Mar. 15, 2001 DMTN3 Step-up 50,000,000 (37)
Dec. 2, 2011 July 20, 2001 DMTN8 6.10 500,000,000
Dec. 2, 2012 May 12, 2003 DMTN53 5.375 500,000,000
June 2, 2013 May 28, 2003 DMTN69 4.75 500,000,000 (127)
Mar. 8, 2014 Jan. 28, 2004 DMTN93 5.00 1,000,000,000 (109)
Mar. 8, 2015 Jan. 24, 2005 DMTN135 4.50 500,000,000
June 2, 2020 Feb. 22, 2005 DMTN140 4.85 29,000,000 (92)
Sep. 8, 2023 Nov. 29, 2004 HP 8.10 50,000,000 (59)
June 2, 2027 Feb. 4, 2000 HC-KJA 7.60 100,500,000 (61)
Aug. 25, 2028 Apr. 6, 1999 HC-LQA 6.25 78,600,000
June 2, 2031 Feb. 24, 2000 HC-NF 6.20 500,000,000 (51)
9,752,821,944
PAYABLE IN EUROPE IN CANADIAN DOLLARS
Apr. 17, 2013 June 3, 2003 EMTN56 5.25 150,000,000
July 8, 2014 July 8, 2004 EMTN63 3 CBA+0.07 500,000,000
Feb. 17, 2015 Feb. 17, 2005 EMTN69 4.50 200,000,000
850,000,000
PAYABLE IN EUROPE IN SWISS FRANCS
July 8, 2013 July 8, 2003 EMTN60 2.50 300,000,000
TOTAL PAYABLE IN EUROPE IN SWISS FRANCS................................................................................ 300,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $1.02348................................................................... 307,045,455 (35)
PAYABLE IN EUROPE IN AUSTRALIAN DOLLARS
Sep. 2, 2009 Sep. 2, 2004 EMTN67 5.75 150,000,000
150,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $0.92997................................................................... 139,495,400 (112)
PAYABLE IN CANADA IN U.S. DOLLARS
Sep. 15, 2006 Sep. 15, 2004 DMTN120 3 LIBOR-0.15 70,000,000
70,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $1.28900................................................................... 90,230,000 (129)
GLOBAL MARKET PAYABLE IN U.S. DOLLARS
Dec. 15, 2005 Nov. 26, 2002 GLB-NTB 2.625 268,308,080 (125)
June 30, 2006 Apr. 10, 2003 GLB-NX 2.35 500,000,000
Mar. 28, 2008 Feb. 26, 2003 GLB-NW 3.282 300,000,000 (88)
Oct. 1, 2008 Mar. 19, 2001 GLB-MBB 5.50 250,000,000
Feb. 3, 2015 Feb. 3, 2005 GLB-PE 4.50 500,000,000
TOTAL PAYABLE IN GLOBAL MARKET IN U.S. DOLLARS......................................................................... 1,818,308,080
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $1.39992................................................................... 2,545,500,000 (93)
TOTAL DEBENTURES AND BONDS............................................................................................. 13,685,092,799
TREASURY BILLS......................................................................................................... 953,000,000
U.S. COMMERCIAL PAPER (in U.S. Dollars)................................................................................ 50,000,000
CANADIAN DOLLAR EQUIVALENT EXCHANGE RATE OF $1.23263................................................................... 61,631,500
TOTAL DEBT ISSUED FOR OEFC............................................................................................. 16,677,936,299
Direct OEFC Debt....................................................................................................... 10,839,963,000
TOTAL OEFC DEBT........................................................................................................ 27,517,899,299
__________
* Debt Issued for Investment Purposes, as a result of a debt for equity swap between the Province and Ontario Power Generation Inc.
and Hydro One Inc., is eliminated upon consolidation.
References:
1. All debts are non-callable, except as noted below. CBA is Canadian Bankers' Acceptance Rate; 3 CBA is a three month floating
rate; LIBOR is London Inter-bank Offered Rate. All foreign currency debts have been converted into Canadian dollars at the
rates of the currency exchange agreements if the debts are hedged, or at year end exchange rates if unhedged. The year end
exchange rates of foreign currencies to Canadian dollars as at March 31, 2005 are: Australian dollar 0.9349, Euro 1.5689, Hong
Kong dollar 0.155092, Japanese yen 0.011283, New Zealand dollar 0.8617, U.K. pound 2.2848, Swiss franc 1.0118, and United
States dollar 1.2096.
2. Bonds are extendible at the option of the Province on the initial maturity date of October 27, 2006 and on each extended
maturity date thereafter to the final maturity date of October 27, 2011. Interest is payable semi-annually at 4.0% in year
1-2, 4.2% in year 3, 4.5% in year 4, 4.9% in year 5, 5.35% in year 6, 5.8% in the final year. In addition, the Province
entered into interest rate agreements that effectively converted the interest rate obligation on this debt to a fixed rate of
3.14%.
3. Bonds are extendible at the option of the Province on the initial maturity date of October 29, 2006 and on each extended
maturity date thereafter to the final maturity date of October 29, 2014. Interest is payable monthly at 4.2% in year 1, 4.25%
in year 2, 4.35% in year 3, 4.5% in year 4, 4.65% in year 5, 4.85% in year 6, 5.25% in year 7, 5.5% in year 8, 6.0% in year 9
and 7.0% in the final year. In addition, the Province entered into interest rate agreements that effectively converted the
interest rate obligation on this debt to a fixed rate of 3.09%.
4. Maximum reset interest rate on this debt is 4.0%.
5. Securities sold to the Canada Pension Plan Investment Fund are payable 20 years after their respective dates of issue, are not
negotiable and not transferable or assignable but are redeemable in whole or in part before maturity at the option of the
Minister of Finance of Canada, on six months' prior notice, when the Minister deems it necessary in order to meet the
requirements of the Canada Pension Plan. In the case of redemption before maturity, the Ontario Securities are to be redeemed
in the order in which they were issued and the amount of Ontario Securities to be redeemed at any time shall be proportionate
to the amount of all securities then held to the credit of the said fund represented by Ontario Securities.
6. Bonds are extendible at the option of the Province on the initial maturity date of April 25, 2005 and on every extended
maturity date thereafter, to the final maturity date of April 25, 2008. Interest is payable semi-annually at 4.3% in years
1-2, 4.7% in year 3, 5.35% in year 4 and 6.4% in the final year. In addition, the Province entered into interest rate
agreements that effectively converted the interest rate obligation to a fixed rate of 3.66%.
7. The terms of these debentures require that equal payments be made each year until their maturity. Each payment consists of
blended principal and interest.
8. Bonds are callable in full but not in part at the option of the Province on May 19, 2006 or bonds are exchangeable in whole or
in part at the option of the bond holders on May 26, 2006.
9. The Province entered into currency exchange agreements that effectively converted these U.S. dollar obligations to Canadian
dollar obligations at an exchange rate of 1.29725. In addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligation to a fixed rate of 6.73%.
10. The Province entered into currency exchange agreements that effectively converted these U.S. dollar obligations to Canadian
dollar obligations at an exchange rate of 1.58850. In addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligation to a rate of 3.70%.
11. Bonds are extendible at the option of the Province on the initial maturity date of April 18, 2005, and on every extended
maturity date thereafter, to the final maturity date of April 18, 2008. Interest is payable semi-annually at 4.30% in years
1-2, 4.70% in year 3, 5.40% in year 4, and 6.50% in the final year. In addition, the Province entered into interest rate
agreements that effectively converted the interest rate obligation to a fixed rate of 3.84%.
12. Interest is payable semi-annually at 3.5% in 1-2 years and thereafter at 4.0% until the maturity date.
13. The Province entered into currency exchange agreements that effectively converted these Hong Kong dollar obligations to
Canadian dollar obligations at an exchange rate of 0.17410. In addition, the Province entered into interest rate agreements
that effectively converted the interest rate obligation to a fixed rate of 4.99%.
14. The Province entered into currency exchange agreements that effectively converted 55 billion of these Japanese yen obligations
to Canadian dollar obligations at an exchange rate of 0.013213. In addition, the Province entered into interest rate
agreements that effectively converted the interest rate obligation on $507 million of these debt to a fixed rate of 8.11%,
$220 million to a three-month Canadian BA rate minus 0.051% and the remaining debt of $169 million is at a coupon rate of
1.59%.
15. The Province entered into currency exchange agreements that effectively converted 57 billion of these Japanese yen obligations
to Canadian dollar obligations at an exchange rate of 0.012766. In addition, the Province entered into interest rate
agreements that effectively converted the interest rate obligation on $729 million of these debts to a fixed rate of 7.49%;
the remaining debt of $169 million is at a coupon rate of 1.51%.
16. The Province entered into interest rate agreements that effectively converted the interest rate obligation to a fixed rate of
3.42%.
17. Bonds are callable at the option of the Province at par on November 16, 2005. Interest is payable annually at 3.72% in year 1,
3.87% in year 2, 4.02% in year 3 and 4.17% in the final year. The province entered into currency exchange agreements that
effectively converted these U.S. dollar obligations to Canadian dollar obligations at an exchange rate of 1.24400. In
addition, the Province entered into interest rate agreements that effectively converted the interest rate obligation to a
floating three-month US LIBOR rate minus 0.24%.
18. Bonds are extendible at the option of the Province on the initial maturity date of May 20, 2005, and on every extended
maturity date thereafter, to the final maturity date of May 20, 2008. Interest is payable semi-annually at 4.15% in years 1-2,
4.35% in year 3, 5.00% in year 4, 5.35% in year 5, and 6.00% in the final year. In addition, the Province entered into
interest rate agreements that effectively converted the interest rate obligation to a fixed rate of 3.47%.
19. Bonds are retractable in whole or in part at the option of the bond holders on February 8, 2007.
20. Bonds are retractable in whole or in part at the option of the bond holders on March 1, 2010.
21. Bonds are extendible at the option of the bond holders in whole or in part any time prior to January 12, 2007 to the final
maturity date of January 12, 2035.
22. Bonds are extendible at the option of the Province on the initial maturity date of May 26, 2005, and on each extended maturity
date thereafter to the final maturity date of May 26, 2011. Interest is payable semi-annually at 4.20% in years 1-2, 4.40% in
year 3, 4.65% in year 4, 5.00% in year 5, 5.50% in year 6, 6.50% in year 7, and 7.75% in the final year. In addition, the
Province entered into interest rate agreements that effectively converted the interest rate obligation to a fixed rate of
3.21%.
23. The School Board Trust was created in June 2003 to permanently refinance debt incurred by 55 school boards to support their
capital projects prior to the introduction of the student focused funding model in 1998. The trust issued 30-year sinking fund
debentures amounting to $891 million in June 2003. The Trust provided $882 million of the proceeds to the 55 school boards in
exchange for the irrevocable right to receive future transfer payments from the Province related to this debt. These amounts
will be reduced over the 30-year period by the transfer payments made by Ministry of Education to the Trust under the School
Board Operating Grant program. (As at March 31, 2005, the outstanding amount of $867 million advanced to School Board are
included in Other Assets and outstanding debentures of $876 million is included in Debt).
24. The terms of these debentures require unequal payments, consisting of both principal and interest, to be made at predetermined
irregular intervals. By January 10, 2035, the principal to be repaid on these debentures will be $230.8 million.
25. Bonds are extendible at the option of the Province on the initial maturity date of June 2, 2005, and on each extended maturity
date thereafter to the final maturity date of June 2, 2010. Interest is payable semi-annually at 4.05% in years 1-2, 4.25% in
year 3, 4.70% in year 4, 5.20% in year 5, 5.70% in year 6, and 6.50% in the final year. In addition, the Province entered into
interest rate agreements that effectively converted the interest rate obligation to a fixed rate of 3.27%.
26. Bonds are extendible at the option of the Province on the initial maturity date of January 28, 2007 and on each extended
maturity date thereafter to the final maturity date of January 28, 2015. Interest is payable semi-annually at 4.1% in year
1-2, 4.15% in year 3, 4.25% in year 4, 4.35% in year 5, 4.5% in year 6, 4.75% in year 7, 5.0% in year 8, 5.75% in year 9, and
6.5% in the final year. In addition, the Province entered into interest rate agreements that effectively converted the
interest rate obligation on this debt to a fixed rate of 3.39%.
27. The Province entered into currency exchange agreements that effectively converted these Euro obligations to Canadian dollar
obligations at an exchange rate of 1.65967. In addition, the Province entered into interest rate agreements that effectively
converted the interest rate obligations on $3,426 million of these debt to a rate of 5.53% and $46 million to a three-month
Canadian BA rate minus 0.055%.
28. The Province entered into interest rate agreements that effectively converted the interest rate obligation to a fixed rate of
3.60%.
29. The outstanding amounts represent bonds matured but not yet presented for redemption.
30. The Province issues fixed rate OSBs for a term of three years every year.
31. Bonds are extendible at the option of the Province on the initial maturity date of June 27, 2005, and on each extended
maturity date thereafter to the final maturity date of June 27, 2010. Interest is payable semi-annually at 3.50% in years 1-2,
3.75% in year 3, 4.00% in year 4, 4.625% in year 5, 5.50% in year 6, and 6.25% in the final year. In addition, the Province
entered into interest rate agreements that effectively converted the interest rate obligation to a fixed rate of 2.93%.
32. Bonds are extendible at the option of the Province on the initial maturity date of September 4, 2005, and on each extended
maturity date thereafter to the final maturity date of September 4, 2013. Interest is payable semi-annually at 4.35% in years
1-2, 4.50% in year 3, 4.65% in year 4, 4.90% in year 5, 5.50% in year 6, 6.00% in year 7, 6.75% in year 8, 7.50% in year 9,
and 8.00% in the final year. In addition, the Province entered into interest rate agreements that effectively converted the
interest rate obligation to a fixed rate of 3.01%.
33. Bonds are extendible at the option of the Province on the initial maturity date of October 14, 2006 and on each extended
maturity date thereafter to the final maturity date of October 14, 2009. Interest is payable annually at 4.0% in year 1-2,
4.1% in year 3, 4.4% in year 4, 5.0% in the final year. In addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligation on this debt to a fixed rate of 3.13%.
34. Registered holder exercised the right to exchange Series MV Bonds for Series MW Bonds on December 2, 2004. In addition, the
Province entered into interest rate agreements that effectively converted the interest rate obligation on this debt to a
floating three month BA rate minus 0.45%.
35. The Province entered into currency exchange agreements that effectively converted these Swiss francs obligations to Canadian
dollar obligations at an exchange rate of 1.02348. In addition, the Province entered into interest rate agreement that
effectively converted the interest rate obligation to a fixed rate of 4.99%.
36. Bonds are extendible at the option of the Province on the initial maturity date of September 10, 2005, and on each extended
maturity date thereafter to the final maturity date of September 10, 2008. Interest is payable semi-annually at 4.00% in years
1-2, 4.30% in year 3, 4.85% in year 4, and 5.45% in the final year. In addition, the Province entered into interest rate
agreements that effectively converted the interest rate obligation to a fixed rate of 3.18%.
37. Bonds are retractable in whole or in part at the option of the bond holders on March 15, 2005. Interest is payable at 5.50%
for the first four years and 6.80% for the remaining six years.
38. Bonds are retractable at the option of the bond holders on December 2, 2014, or exchangeable for series DMTN119 at par on
December 15, 2014. Interest is payable at 4.0% until December 2, 2014 and thereafter at 5.35% until final maturity date. In
addition, the Province entered into interest rate agreements that effectively converted the interest rate obligation on this
debt to a rate of 5.26%.
39. Outstanding amounts include bonds held by Agricorp, a government organization, of $10 million in Series JV.
40. No interest is payable in the first five years, thereafter interest is payable monthly at 17.25%.
41. The terms of these debentures require unequal payments, consisting of both principal and interest, to be made at predetermined
irregular intervals with the final payment on January 10, 2045. The total principal and interest to be payable over the life
of the debenture is $1,325 million in total.
42. Bonds are extendible at the option of the Province on July 18, 2005 to final maturity date of July 18, 2008. Interest is
payable semi-annually at 3.75% in years 1-2, and 5.15% thereafter, if extended. In addition, the Province entered into
interest rate agreements that effectively converted the interest rate obligation to a fixed rate of 3.15%.
43. The Province entered into currency exchange agreements that effectively converted these US dollar obligations to Canadian
dollar obligations at an exchange rate of 1.36783. In addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligations on $17,130 million of these debt to a rate of 5.32%, $193 million to three
month Canadian BA rate plus 0.024% and $570 million to one month Canadian BA rate plus 0.046%.
44. Bonds are extendible at the option of the Province on the initial maturity date of August 5, 2005, and on each extended
maturity date thereafter to the final maturity date of August 5, 2010. Interest is payable semi-annually at 4.00% in years
1-3, 4.25% in year 4, 5.00% in year 5, 5.25% in year 6, and 7.50% in the final year. In addition, the Province entered into
interest rate agreements that effectively converted the interest rate obligation to a fixed rate of 3.20%.
45. The Province entered into interest rate agreements that effectively converted the interest rate obligation to a three-month
Canadian BA rate minus 0.02%.
46. Interest is payable quarterly at a three-month Canadian BA rate plus 0.85% for the first two years, and thereafter at 5.75%
semi-annually. In addition, the Province entered into interest rate agreements that effectively converted the interest rate
obligation to a three-month Canadian BA rate minus 0.07%.
47. Proceeds of issue and repayment are in Japanese yen. Interest is payable in Australian dollars annually based on a notional
principal of Australian dollars $103.2 million at 3.2%. In addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligation to a fixed rate of 6.86%.
48. Bonds are extendible at the option of the Province on the initial maturity date of January 19, 2007 and on each extended
maturity date thereafter to the final maturity date of January 19, 2017. Interest is payable semi-annually at 4.2% in year
1-2, 4.5% in year 3-4, 4.75% in year 5, 5.0% in year 6, 5.25% in year 7, 5.5% in year 8, 5.75% in year 9, 6.0% in year 10,
6.5% in year 11 and 7.0% in the final year. In addition, the Province entered into interest rate agreements that effectively
converted the interest rate obligation on this debt to a fixed rate of 3.39%.
49. Bonds are extendible at the option of the Province on the initial maturity date of August 25, 2005, and on each extended
maturity date thereafter to the final maturity date of August 25, 2008. Interest is payable semi-annually at 4.00% in years
1-2, 4.10% in year 3, 4.60% in year 4, and 5.30% in the final year. In addition, the Province entered into interest rate
agreements that effectively converted the interest rate obligation to a fixed rate of 3.26%.
50. Interest rate on this debt is capped at 3.25% in year 1, 3.90% in year 2 and 4.65% in the final year. In addition, the
Province entered into interest rate agreements that effectively converted the interest rate obligation on this debt to a fixed
rate of 3.67%.
51. This issue has been on-lent to OEFC until June 2, 2010, after which the issue will be assumed by the Province until the
maturity date.
52. Bonds are extendible at the option of the Province on the initial maturity date of September 26, 2005, and on each extended
maturity date thereafter to the final maturity date of September 26, 2013. Interest is payable semi-annually at 4.25% in years
1-2, 4.35% in year 3, 4.50% in year 4, 4.75% in year 5, 5.25% in year 6, 5.75% in year 7, 6.25% in year 8, 7.00% in year 9,
and 8.25% in the final year. In addition, the Province entered into interest rate agreements that effectively converted the
interest rate obligation to a fixed rate of 2.98%.
53. The Province entered into interest rate agreements that effectively converted the interest rate obligation to a fixed rate of
4.02%.
54. Proceeds of issue and repayment are in Japanese yen. Interest is payable in Australian dollars, based on a notional principal
of AUD52.5 million at 3.10%. In addition, the Province entered into interest rate agreements that effectively converted the
interest rate obligation to a three-month Canadian BA rate minus 0.051%.
55. Proceeds of issue and repayment are in Japanese yen. Interest is payable in U.S. dollars, based on a notional principal of
USD120.8 million at 3.25%. In addition, the Province entered into interest rate agreements that effectively converted the
interest rate obligation to a three-month Canadian BA rate minus 0.051%.
56. Bonds are extendible at the option of the bond holders on the initial maturity date of September 8, 2013 to the final maturity
date of March 8, 2033. Interest is payable semi-annually at 4.625% until the initial maturity date and at 5.85% if extended.
In addition, the Province entered into interest rate agreements that effectively converted the interest rate obligation on
this debt to a rate of 5.08%.
57. Proceeds of issue and repayment are in Japanese yen. Interest is payable in Australian dollars based on a notional principal
of AUD121.1 million at 4.28%. In addition, the Province entered into interest rate agreements that effectively converted the
interest rate obligation to a fixed rate of 7.38%.
58. During the 2004-05 fiscal year, Series DMTN61 was re-opened once, bringing the total issue size to $4,500 million.
59. During the 2004-05 fiscal year, Series HP was re-opened twice, bringing the total issue size to $991 million, including
$50 million for OEFC.
60. During the 2004-05 fiscal year, the Province purchased for cancellation $5.9 million Series DMTN46.
61. During the 2004-05 fiscal year, Series KJ was re-opened five times, bringing the total issue size to $4,835 million, including
$101 million to OEFC.
62. 1999-2004 Series are redeemable at the option of the holder on June 21 and December 21 and also during the 14 calendar days
immediately after, with the exception of fixed rate bonds, which are redeemable at maturity only. All current outstanding OSBs
may be redeemed upon the death of the beneficial owner.
63. During the 2004-05 fiscal year, Series LK was re-opened once, bringing the total issue size to $4,727 million.
64. During the 2004-05 fiscal year, Series NE was re-opened once, bringing the total issue size to $774 million.
65. Pursuant to the Ontario Public Service Employees' Pension Act 1994 and the Asset Transfer Agreement of December 12, 1994, the
Province was obligated to re-split the debentures between the Public Service Pension Fund (“PSPF”) and the Ontario Public
Service Employees' Union Pension Plan Trust Fund (“OPSEU Fund”) based on accurate data when it was available. On June 13, 1997
a Restated Sponsorship Amendment and Asset Transfer Agreement was signed, replacing the 1994 agreement and resulting the
existing split after debt payment. The terms of these debenture require that the principal be repaid in 12 equal monthly
payment in the year preceding the date of maturity.
66. 2000 Series: Interest is payable at 5.75% in year 1, 6.25% in year 2, 6.50% in year 3, 6.75% in year 4 and 7.00% in the final
year. 2001 Series: Interest is payable at 4.25% in year 1, 5.00% in year 2, 5.75% in year 3, 6.25% in year 4 and 6.75% in the
final year. 2002 Series: Interest is payable at 2.50% in year 1, 3.75% in year 2, 4.50% in year 3, 5.00% in year 4 and 5.50%
in the final year. 2003 Series: Interest is payable at 2.75% in year 1, 3.25% in year 2, 3.5% in year 3, 4.00% in year 4 and
4.25% in the final year. 2004 Series: Interest payable at 1.7% in year 1, 3% in year 2, 3.5% in year 3, 4.5% in year 4 and 6%
in the final year.
67. The Minister of Finance will reset the interest rate every six months. Effective December 21, 2004, the interest rate was set
at 2.2%.
68. The Province entered into interest rate agreements that effectively converted the interest rate obligation on $1,560 million
of this debt to a fixed rate of 3.87%.
69. The Province entered into currency exchange agreements that effectively converted these New Zealand dollar obligations to
Canadian dollar obligations at an exchange rate of 0.75575. In addition, the Province entered into interest rate agreements
that effectively converted the interest rate obligation to a fixed rate of 5.24%.
70. During the 2004-05 fiscal year, the Province purchased for cancellation $88.1 million Series HS.
71. Bonds are extendible at the option of the Province on the initial maturity date of December 1, 2005, and on each extended
maturity date thereafter to the final maturity date of December 1, 2008. Interest is payable semi-annually at 4.00% in years
1-2, 4.20% in year 3, 4.65% in year 4, and 5.65% in the final year. In addition, the Province entered into interest rate
agreements that effectively converted the interest rate obligation to a fixed rate of 3.22%.
72. During the 2004-05 fiscal year, Series DMTN16 was re-opened once, bringing the total issue size to $2,000 million. Outstanding
amount includes bonds held by Legal Aid, a government organization, of $3.6 million.
73. The Province entered into interest rate agreement that effectively converted the interest rate obligation to a fixed rate of
3.08%.
74. The Province entered into interest rate agreement that effectively converted the interest rate obligation to a fixed rate of
2.91%.
75. Bonds are extendible at the option of the Province on the initial maturity date of January 26, 2006, and on each extended
maturity date thereafter to the final maturity date of January 26, 2009. Interest is payable semi-annually at 3.75% in years
1-2, 3.90% and 4.05% for the two payments in year 3, 4.20% and 4.45% for the two payments in year 4, and 5.25% and 6.00% for
the two payments in the final year. In addition, the Province entered into interest rate agreements that effectively converted
the interest rate obligation to a fixed rate of 2.70%.
76. Bonds are extendible at the option of the Province on the initial maturity date of October 1, 2006 and on each extended
maturity date thereafter to the final maturity date of October 1, 2010. Interest is payable semi-annually at 4.0% in year 1-2,
4.1% in year 3, 4.3% in year 4, 4.9% in year 5, 5.75% in the final year. In addition, the Province entered into interest rate
agreements that effectively converted the interest rate obligation on this debt to a fixed rate of 3.12%.
77. Bonds are extendible at the option of the Province on the initial maturity date of January 27, 2006, and on each extended
maturity date thereafter to the final maturity date of January 27, 2011. Interest is payable semi-annually at 4.00% in years
1-2, 4.20% in year 3, 4.40% in year 4, 5.00% in year 5, 5.20% in year 6, and 6.00% in the final year. In addition, the
Province entered into interest rate agreements that effectively converted the interest rate obligation to a fixed rate of
2.71%.
78. Bonds are extendible at the option of the Province on the initial maturity date of February 12, 2006, and on each extended
maturity date thereafter to the final maturity date of February 12, 2009. Interest is payable semi-annually at 3.25% in years
1-2, 3.40% and 3.60% for the two payments in year 3, 3.80% and 4.30% for the two payments in year 4, and 5.00% and 6.00% for
the two payments in the final year. In addition, the Province entered into interest rate agreements that effectively converted
the interest rate obligation to a fixed rate of 2.49%.
79. Proceeds of issue and repayment of principal are in Japanese yen. Interest is payable in U.S. dollars annually based on a
notional principal of USD 86.3 million at 3.58%. In addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligation to a fixed rate of 6.35%.
80. Proceeds of issue and repayment of principal are in Japanese yen. Interest is payable in US dollars semi-annually based on a
notional principal of USD57.1 million at 2.6%. In addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligation to a fixed rate of 5.57%.
81. Bonds are extendible at the option of the Province on the initial maturity date of February 25, 2007 and on each extended
maturity date thereafter to the final maturity date of February 25, 2010. Interest is payable annually at 3.25% in year 1-2,
3.6% in year 3, 4.25% in year 4, and 5.0% in the final year. In addition, the Province entered into interest rate agreements
that effectively converted the interest rate obligation on this debt to a fixed rate of 3.42%.
82. During the 2004-05 fiscal year, the Province purchased for cancellation $1.3 million of Series JA.
83. Total Debt Issued for Provincial Purposes does not include the following debt issued by government organizations:
$2,140.5 million by Ontario Housing Corporation, $79 million by Ontario Municipal Improvement Corporation, $404 million by
Toronto Area Transit Operating Authority (Go Transit), $1,288 million by Ontario Strategic Infrastructure Financing Authority
and debt of Royal Ontario Museum of $25.6 million.
84. The treasury bill balance includes the following treasury bill holdings by government organizations: $191 million held by the
Northern Ontario Heritage Fund Corporation, $105 million held by Ontario Trillium Foundation, $132 million held by Ontario
Reality Corporation and $33 million held by Ontario Securities Commission.
85. Bonds are extendible at the option of the Province on the initial maturity date of September 7, 2006 and on each extended
maturity date thereafter to the final maturity date of September 7, 2011. Interest is payable semi-annually at 4.1% in year
1-2, 4.25% in year 3, 4.6% in year 4, 4.85% in year 5, 5.0% in year 6 and 6.0% in the final year. In addition, the Province
entered into interest rate agreements that effectively converted the interest rate obligation on this debt to a fixed rate of
3.11%.
86. The Province entered into interest rate agreements that effectively converted the interest rate obligation on this debt to a
fixed rate of 3.31%.
87. Bonds are extendible at the option of the Province on the initial maturity date of March 19, 2006, and on each extended
maturity date thereafter to the final maturity date of March 19, 2011. Interest is payable monthly at 3.25% in years 1-2,
3.30% in year 3, 3.90% in year 4, 5.00% in year 5, 5.40% in year 6, and 6.35% in the final year. In addition, the Province
entered into interest rate agreements that effectively converted the interest rate obligation to a fixed rate of 2.31%.
88. Bonds are callable in full but not in part at the option of the Province on September 7, 2005 and every six months thereafter
to final maturity date of March 28, 2008.
89. During the 2004-05 fiscal year, Series DMTN131 was re-opened once, bringing the total issue size to USD 300 million.
90. The terms of these debentures require that a special one-time interest payment of $31.1 million be made at maturity.
91. U.S. Commercial Paper issues are non-interest bearing with maturities up to 92 days.
92. During fiscal year 2004-05, Series DMTN140 was re-opened three times, bringing the total issue size to $200 million, including
$29 million for OEFC.
93. The Province entered into currency exchange agreements that effectively converted these U.S. dollar obligations to Canadian
dollar obligations at an exchange rate of 1.39992. In addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligations on $2,171 million of these debt to a fixed rate of 4.96% and $374 million
to a floating three month U.S. LIBOR rate minus 0.1%.
94. Bonds are extendible at the option of the Province on March 24, 2006 to the final maturity date of March 24, 2011. Interest is
payable semi-annually at 3.00% in years 1-2, and 5.05% if extended. In addition, the Province entered into interest rate
agreements that effectively converted the interest rate obligation to a fixed rate of 2.40%.
95. Bonds were extended at the option of the bond holders on the initial maturity date of November 20, 2002, and are extendible
annually on each extended maturity date thereafter to the final maturity date of February 20, 2007. Interest is payable
quarterly at a three-month Canadian BA rate minus 0.05% in year 1, three-month Canadian BA rate minus 0.01% in year 2,
three-month Canadian BA rate plus 0.03% in year 3, three-month Canadian BA rate plus 0.05% in year 4, and three-month Canadian
BA rate plus 0.07% for the remaining term.
96. Debentures issued to the Ontario Housing Corporation (OHC) are not negotiable and not transferrable or assignable but are
redeemable in whole or in part at the option of the OHC, on six months prior written notice.
97. Outstanding amounts include bonds held by government organizations: Legal Aid of $4.6 million and Agricorp of $9 million.
98. This is a variable payment, zero coupon bond with a yield of 4.54%.
99. Bonds are extendible at the option of the Province on the initial maturity date of October 27, 2006 and on each extended
maturity date thereafter to the final maturity date of October 27, 2014. Interest is payable semi-annually at 4.45% in year
1-2, 4.55% in year 3, 4.65% in year 4, 4.75% in year 5, 4.85% in year 6, 5.0% in year 7, 5.25% in year 8, 6.0% in year 9 and
7.0% in the final year. In addition, the Province entered into interest rate agreements that effectively converted the
interest rate obligation on this debt to a fixed rate of 3.14%.
100. Bonds are extendible at the option of the Province on the initial maturity date of July 7, 2006 and on each extended maturity
date thereafter to the final maturity date of July 7, 2009. Interest is payable annually at 4.2% in year 1-2, 4.55% in year 3,
5.0% in year 4, and 5.5% in the final year. In addition, the Province entered into interest rate agreements that effectively
converted the interest rate obligation on this debt to a fixed rate of 3.18%.
101. Bonds are extendible at the option of the Province on the initial maturity date of March 26, 2006, and on each extended
maturity date thereafter to the final maturity date of March 26, 2014. Interest is payable semi-annually at 4.00% in years
1-2, 4.10% in year 3, 4.15% in year 4, 4.30% in year 5, 4.50% in year 6, 4.75% in year 7, 5.00% in year 8, 5.25% in year 9,
and 5.75% in the final year. In addition, the Province entered into interest rate agreements that effectively converted the
interest rate obligation to a fixed rate of 2.35%.
102. Bonds are extendible at the option of the Province on the initial maturity date of July 2, 2006 and on each extended maturity
date thereafter to the final maturity date of July 2, 2010. Interest is payable semi-annually at 4.35% in year 1-2, 4.6% in
year 3, 5.0% in year 4, 5.25% in year 5 and 5.75% in the final year. In addition, the Province entered into interest rate
agreements that effectively converted the interest rate obligation on this debt to a fixed rate of 3.18%.
103. The Province entered into interest rate agreements that effectively converted the interest rate obligation to a fixed rate of
3.71%.
104. The Province entered into interest rate agreement that effectively converted the interest rate obligation to a fixed rate of
3.28%.
105. The Province entered into interest rate agreements that effectively converted the interest rate obligation on $425 million of
this debt to a fixed rate of 4.65%.
106. The Province entered into interest rate agreement that effectively converted the interest rate obligation to a fixed rate of
3.37%.
107. During the 2004-05 fiscal year, Series DMTN85 was re-opened twice, bringing the total issue size to $2,596 million, including
$736 million for OEFC.
108. Interest is capped at 5.0%.
109. During the 2004-05 fiscal year, Series DMTN93 was re-opened four times, bringing the total issue size to $3,500 million,
including $1,000 million for OEFC. Outstanding amounts include bonds held by Ontario Strategic Infrastructure Financing
Authority of $250 million.
110. Bonds were extended at the option of the bond holders on the initial maturity date of December 5, 2002, and are extendible
annually on each extended maturity date to the final maturity date of December 5, 2008. Interest is payable quarterly at a
three-month Canadian BA rate minus 0.05% in year 1, minus 0.01% in year 2, plus 0.03% in year 3, plus 0.05% in year 4, plus
0.07% in year 5, and plus 0.08% in the final two years.
111. Outstanding amounts include bonds held by Agricorp, a government organization, of $11 million in Series NK.
112. The Province entered into exchange rate agreement that effectively converted this Australian dollar obligations to Canadian
dollar obligations at an exchange rate of 0.92997. In addition, the Province entered into interest rate agreement that
effectively converted the interest rate obligation of this debt to a fixed rate of 4.38%.
113. The Province entered into interest rate agreements that effectively converted the interest rate obligation on this debt to a
fixed rate of 3.28%.
114. The Province entered into currency exchange agreements that effectively converted these pound sterling obligations to Canadian
dollar obligations at an exchange rate of 2.43535. In addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligation on this debt to a fixed rate of 4.27%.
115. Bonds are retractable at the option of the holders on March 8, 2012 or exchangeable at par on March 21, 2012 for the
Series DMTN61 maturing on March 8, 2033. Interest is payable semi-annually at 3.25% until March 8, 2012 and 5.85% to March 8,
2033. In addition, the Province entered into interest rate agreements that effectively converted the interest rate obligation
to a rate of 5.72%.
116. Bonds are callable at the option of the Province on June 1, 2005. Interest is payable quarterly at a three-month Canadian BA
rate plus 0.59% in years 1-3, and semi-annually at 5.70% if not called. In the event that the bond is not called, the bond
holder has the right to exchange this series for series LZ. In addition, the Province entered into interest rate agreements
that effectively converted the interest rate obligation to a three-month Canadian BA rate minus 0.03%.
117. The Province entered into currency exchange agreements that effectively converted these Australian dollar obligations to
Canadian dollar obligations at an exchange rate of 0.80982. In addition, the Province entered into interest rate agreements
that effectively converted the interest rate obligation to a fixed rate of 5.26%.
118. The amount outstanding in legacy currency is French franc 3 billion. The French franc was converted to Euro using conversion
rate of one Euro equals: 6.55957 French francs in accordance with Council Regulation (EU) No. 2866/98. In addition, the
Province entered into interest rate agreements that effectively converted the interest rate obligation to a rate of 5.35%.
119. Bonds are callable at the option of the Province on September 12, 2005. In addition, the Province entered into interest rate
agreements that effectively converted the interest rate obligation to a fixed rate of 3.17%.
120. Bonds are extendible at the option of the Province on the initial maturity date of September 20, 2006 and on each extended
maturity date thereafter to the final maturity date of September 20, 2011. Interest is payable semi-annually at 4.15% in year
1-2, 4.25% in year 3, 4.4% in year 4, 4.6% in year 5, 4.90% in year 6 and 6.0% in the final year. In addition, the Province
entered into interest rate agreements that effectively converted the interest rate obligation on this debt to a fixed rate of
3.12%.
121. The amount outstanding in legacy currency is French franc 3 billion. The French franc was converted to Euro using conversion
rate of one Euro equals: 6.55957 French francs in accordance with Council Regulation (EU) No. 2866/98. In addition, the
Province entered into interest rate agreements that effectively converted the interest rate obligation to a fixed rate of
6.61%.
122. The Province entered into currency exchange agreements that effectively converted 10 billion of these Japanese yen obligations
to Canadian dollar obligations at an exchange rate of 0.012099. In addition, the Province entered into interest rate
agreements that effectively converted the interest rate obligation on $121 million of this debt to a fixed rate of 6.48%; the
remaining debt of $451 million is at a coupon rate of 1.88%.
123. These are zero coupon bonds with principal and interest payable on maturity. The total principal and interest to be paid over
the life of these bonds are $225.7 million.
124. Principal and interest are repayable in semi-annual instalments of $89.9 million starting from August 13, 2004. The total
outstanding debt is $747.9 million, including $623.2 million for OEFC. The Province entered into interest rate agreements that
effectively converted the interest rate obligation to a fixed rate of 3.17% on $623.2 million for OEFC and the remaining
$124.6 million with a rate of 2.95%.
125. The issue size is USD750 million, including USD268.3 million for OEFC.
126. Debt issued for investment purposes is comprised of Notes payable to Ontario Electricity Financial Corporation as a result of
a debt for equity swap between the Province and its two wholly-owned subsidiaries, Ontario Power Generation Inc. and Hydro One
Inc. The debt matures in three equal instalments on March 31, 2039, 2040 and 2041 and bears interest at 5.85% payable monthly.
127. During the 2004-05 fiscal year, Series DMTN69 was re-opened once, bringing the total issue size to $1,530 million including
$500 million for OEFC.
128. Bonds are extendible at the option of the bond holders on March 8, 2009 to the final maturity date of March 8, 2033. In
addition, the bond holders have the option to exchange this bond for DMTN61 on March 18, 2009. Interest is payable
semi-annually at 3.0% until March 8, 2009 and 5.85%, thereafter if extended.
129. The Province entered into exchange rate agreement that effectively converted this U.S. dollar obligations to Canadian dollar
obligations at an exchange rate of 1.289. In addition, the Province entered into interest rate agreement that effectively
converted the interest rate obligation of this debt to a fixed rate of 3.30%.
130. Outstanding amount includes bonds held by Agricorp, a government organization, of $15 million. During the 2004-05 fiscal year,
Series LE was re-opened once, bringing the total issue size to $1,660 million. The Province entered into interest rate
agreements that effectively converted the interest rate obligation on $100 million of this debt to a three-month Canadian BA
rate minus 0.125%.
131. The Province entered into currency exchange agreements that effectively converted these Swiss Franc obligations to Canadian
dollar obligations at an exchange rate of 1.02143. In addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligations to a fixed rate of 4.26%.
132. Bonds are extendible at the option of the Province on the initial maturity date of May 3, 2006 and on each extended maturity
date thereafter to the final maturity date of May 3, 2010. Interest is payable semi-annually at 3.5% in year 1-2, 3.75% in
year 3, 4.25% in year 4, 5.5% in year 5 and 6.75% in the final year. In addition, the Province entered into interest rate
agreements that effectively converted the interest rate obligation on this debt to a fixed rate of 2.71%.
133. Bonds are extendible at the option of the Province on the initial maturity date of May 5, 2006 and on each extended maturity
date thereafter to the final maturity date of May 5, 2011. Interest is payable semi-annually at 4.0% in year 1-2, 4.15% in
year 3, 4.25% in year 4, 4.75% in year 5 and 5.0% in year 6 and 6.0% in the final year. In addition, the Province entered into
interest rate agreements that effectively converted the interest rate obligation on this debt to a fixed rate of 2.66%.
134. Bonds were issued at a premium of $47.5 million.
135. Outstanding amounts include bonds held by Ontario Strategic Infrastructure Financing Authority of $25 million.
PUBLIC ACCOUNTS, 2004-2005 — VOLUME 1
III. CONTINGENT LIABILITIES — OBLIGATIONS GUARANTEED BY
THE PROVINCE OF ONTARIO
As at March 31, 2005
LOANS GUARANTEED
Year of Rate of Outstanding
Issue Interest March 31, 2005 References
% $
MINISTRY OF AGRICULTURE AND FOOD
Commodity Loan Guarantee Program....................................................... 2004-05 Various 12,968,218 (1)
Feeder Cattle Loan Guarantee Program................................................... 2004-05 Various 7,123,455
FarmPlus Rural Loan Pool Program....................................................... 2004-05 Various 7,847,725 (2)
TOTAL MINISTRY OF AGRICULTURE AND FOOD.......................................................................... 27,939,398
MINISTRY OF COMMUNITY, FAMILY AND CHILDREN'S SERVICES
Ontario College of Social Workers and Social Service Workers........................... 1999 Prime-0.6 3,100,000 (3)
TOTAL MINISTRY OF COMMUNITY, FAMILY AND CHILDREN'S SERVICES..................................................... 3,100,000
MINISTRY OF ECONOMIC DEVELOPMENT AND TRADE
The Development Corporations Act
Total guarantees re various companies................................................ Various Prime+1 245,348
Youth Entrepreneurs Program............................................................ 2001-2002 Prime+1 1,839,623
TOTAL MINISTRY OF ECONOMIC DEVELOPMENT AND TRADE................................................................ 2,084,971
MANAGEMENT BOARD SECRETARIAT
Mortgage Guarantees Dissolution of Ontario Land Corporation............................ 1971-1976 N/A 30,956 (4)
TOTAL MANAGEMENT BOARD SECRETARIAT.............................................................................. 30,956
MINISTRY OF MUNICIPAL AFFAIRS AND HOUSING
Ontario Housing Corporation “Homes Now” Mortgage Financing Program................... 1989 Various 166,127,703 (5)
TOTAL MINISTRY OF MUNICIPAL AFFAIRS AND HOUSING................................................................. 166,127,703
MINISTRY OF NATURAL RESOURCES
Freshwater Fish Marketing Corporation.................................................. 1969 Variable 1,000,000
TOTAL MINISTRY OF NATURAL RESOURCES............................................................................. 1,000,000
MINISTRY OF NORTHERN DEVELOPMENT AND MINES
Algoma Central Railway................................................................. 1995 N/A 3,800,000
TOTAL MINISTRY OF NORTHERN DEVELOPMENT AND MINES................................................................ 3,800,000
MINISTRY OF TRAINING, COLLEGES AND UNIVERSITIES
Ontario Student Loan Plan:
Class “A”.............................................................................. Various Prime 691,773,288
Class “B”.............................................................................. Various Prime+1 584,311,682
Class “C”.............................................................................. Various Prime+1 1,191,892,924
TOTAL MINISTRY OF TRAINING, COLLEGES AND UNIVERSITIES........................................................... 2,467,977,894
TOTAL LOANS GUARANTEED.......................................................................................... 2,672,060,922
OTHER
MINISTRY OF FINANCE
GO Transit Refinancing (TATOA)......................................................... 1994 N/A 403,542,345 (6)
Deposit Insurance Corporation of Ontario............................................... 2004 N/A 20,000,000 (9)
Ontario Municipal Improvement Corporation.............................................. 1991 N/A 79,021,000 (7)
Former Province of Ontario Savings Office (POSO) — Term Deposits....................... 2003 N/A 326,489,732 (8)
TOTAL MINISTRY OF FINANCE............................................................ 829,053,077
TOTAL OTHER.......................................................................... 829,053,077
TOTAL CONTINGENT LIABILITIES.................................................................................... 3,501,113,999
PUBLIC ACCOUNTS, 2004-2005 — VOLUME 1
III. CONTINGENT LIABILITIES — OBLIGATIONS GUARANTEED BY
THE PROVINCE OF ONTARIO — Concluded
As at March 31, 2005
References:
1. The Province's maximum liability for the program is $200,000,000.
2. The Province's maximum liability for the program is $50,000,000.
3. Amount represents loan guarantee for the Ontario College of Social Workers and Social Service Workers from the Royal Bank of
Canada up to $3,100,000 for a period ending December 31, 2006.
4. The Ministry of Finance assumed the contingent liability arising from the Mortgage Guaranty Fund of the Ontario Land
Corporation, which was dissolved on March 31, 1987.
5. Loans totalling $1,323 million taken by OHC for “Homes Now” from the Federal Government's CPP allotment have been guaranteed
by the Province. Starting 1993, most of these loans, except for loans related to Student Housing ($166,127,703), were
refinanced by the private sector and funds realized were loaned to the Ministry of Finance. The Ministry of Finance will
report its loan of $1,157 million as a liability, therefore this should be excluded from the guarantee amount.
6. The Province has entered into a sale and conditional sale-back arrangement of GO Transit with Asset Finance Bermuda Limited.
The deal provided the Province with about $431 million in the initial fiscal year 1993-94 with an option of additional
borrowing and to repay in year 2006. GO Transit will maintain control over its assets and operations and provision will be
made within twelve years to buy back the asset.
7. In accordance with the Capital Investment Plan Act, 1993, the Ontario Municipal Improvement Corporation's (OMIC) assets and
liabilities were transferred to the Ontario Financing Authority (OFA) on November 15, 1993. OMIC received loans from the
Canada Pension Plan (CPP) and the Province, which OMIC used to make loans to municipalities and school boards under similar
terms as its debt.
8. Upon the sale of the former Province of Ontario Savings Office (POSO) to Desjardins Credit Union on March 31, 2003, the
Province provided a maximum five year guarantee up to March 31, 2008 for POSO term deposits (principal and interest) purchased
up to March 31, 2003. The remaining outstanding amount of term deposits guaranteed as at March 31, 2005 is $326 million.
9. The Province has guaranteed the repayment of revolving credit facility made by Canadian Imperial Bank of Commerce to the
Deposit Insurance Corporation of Ontario (DICO) for a period beginning January 1, 2005 and ending December 31, 2005. The
maximum amount guaranteed is $20 million including interest, costs and expenses thereon. DICO will pay the Province a
guarantee fee of 0.005% of credit facility plus 0.05% of actual borrowings.
PUBLIC ACCOUNTS, 2004-2005 — VOLUME 1
IV. CLAIMS AGAINST THE CROWN
As at March 31, 2005
The following are claims arising from legal action either in progress or threatened against the Crown in respect of breach of
contract, damages to persons and property and like items. The amounts claimed have not been specified, but in each case are expected
to exceed $50 million:
1. Dudley Abbot et al. (preferred shareholders of Crown Trust) v. HMQRO.
2. Theriault in respect of mining leases to Hemlo Gold Mines v. HMQRO.
3. Chiefs of Ontario v. HMQRO.
4. Mary Lou LaPratte, Roland LaPratte, Sheila Horrell, Arthur Horrell et al v. HMQRO.
5. Monaghan, John Richard v. HMQRO.
6. Alberto Docouto v. HMQRO.
7. Vance Hamilton Egglestone v. HMQRO, Barker and Maier.
8. Arnold Guettler, Neo-Form Corporation and Neo-Form North America Corporation v. HMQRO et al.
9. R. Shawn A. Cantlon v. HMQRO.
10. Anne and Alexander Larcade v. HMQRO.
11. Pearson v. Inco Ltd., HMQRO.
12. Timothy Natyshak v. HMQRO et al.
13. Ayok, Chol v. York University.
14. Frank Defazio, et al v. HMQRO, Toronto Transit Commission, Pinchen Environmental Consultants, et al.
15. Dumoulin v. Ontario Realty Corporation and HMQRO.
16. Adrian, Shirley et al v. HMQRC and HMQRO.
17. Palahnuk, Robert E, to CLOC v. HMQRO.
18. Deutsch, Melvin P v. HMQRO.
19. Augier, Gideon McGuire v. HMQRO.
20. Mortune, Felicia v. HMQRO.
21. Deep, Dr. Albert Ross v. HMQRO.
22. Mastronardi, Giovanna v. HMQRO.
23. Koumoundouros, Terry v. HMQRO.
24. General Motors Corporation v. HMQRO.
25. West Nile Virus v. HMQRO.
26. Adam's Mine Rail Haul v. HMQRO.
27. Twain, Jim Chief v. HMQRO.
28. Aylmer Meat Packers Inc. v. HMQRO.
29. Mosher, Donald B. v. HMQRO.
30. Williams Andrea v. HMQRO.
31. Office & Professional Employees International Union and Ontario Public Service Employees' Union v. HMQRO.
32. Harrison, John Arthur v. HMQRO.
33. Benjamin, Candice Dr. v. HMQRO.
34. Whole World Trade Ltd. v. HMQRO.
35. Shokri-Razghi, Sarah v. HMQRO.
36. Sarazin, Daniel Lynden v. HMQRO.
37. Wong, Anthony v. HMQRO.
38. Pre-1986, Post 1990 Hepatitis C Claims — Compensation to victims of hepatitis C blood.
39. Class action lawsuit for contamination of property located in the vicinity of the mine site in the Village of Deloro.
40. Robyn Wynberg et al. v. HMQRO.
41. Hamilton Kilty Hockey Club Inc. v. HMQRO.
42. Peter Fallis v. HMQRO.
43. Robert Fenn v. HMQRO.
44. Hartley, Mason v. HMQRO.
45. Rigillio v. Ontario v. HMQRO.
46. Kam-Tim Tong and Chatterjee et al. v. HMQRO.
47. Anderlis Leasing Enterprises et al. v. HMQRO.
48. Northern Diamond Gaming Services Limited and Diamond Gaming Services Inc. et al v. HMQRO.
49. First Class Casinos and Mr. Casino Inc. v. HMQRO.
50. 1191067 Ontario Inc., Silvo Di Gregorio and Tom Jones v. HMQRO.
51. The Chippewas of Sarnia, the Chippewas of Kettle Point et al. v. HMQRO, Polysar Hydrocarbons Limited et al.
52. Roy Michano et al., for themselves and on behalf of the members of the Pic Heron Bay, Pays Plat, Rocky Bay, Whitesand, Pic
Mobert, Red Rock, Sand Point and Long Lake No. 58 Bands of Indians v. HMQRO.
53. Clifford Meness et al., for themselves and all other members of the Algonquins of Golden Lake Band of Indians v. HMQRO.
54. Roger Southwind on behalf of the Lac Seul Indian Band v. HMQRO.
55. Moose Factory First Nation et al. v. Spruce Falls Power and Paper Company Limited.
56. New Post First Nation et al. v. Spruce Falls Power and Paper Company Limited.
57. Beaver House First Nation v. HMQRO.
58. The Chippewas of Saugeen and Nawash First Nations regarding Bruce Peninsula v. HMQRO.
59. Missanabie Cree First Nation v. HMQRO and HMQRC.
60. Chapleau Cree v. HMQRO.
61. Six Nations of the Grand River Band v. HMQRO.
62. Mishkeegogamang First Nation and seventeen others v. HMQRO.
63. Wikwemikong Indian Band v. HMQRO.
64. Chippewas of Sarnia Band v. HMQRO.
65. Mississauga of Alderville, Beausoleil, Chippewas of Georgia Island, Mnjikaning (Rama), Curve Lake Hiawatha, and Scugog Island
First Nation v. HMQRO.
66. Wesley Big George on behalf of seven Lake of the Woods First Nations v. HMQRO.
67. Big Grassy (Mishkosiimiiniiziibing) First Nation and Ojibways of Onigaming First Nations adjacent to the Lake of the Woods and
Winnipeg River area who are signatories to Treaty 3 v. HMQRO.
68. Wauzhushk Onigum First Nation and Ochiichagwe'babig o'ining First Nation and Washagamis Bay First Nations v. HMQRO.
69. Walpole Island First Nations v. HMQRO.
70. The Begetikong Anishnabe First Nation (aka the Ojibways of Pic River) Chief Roy Michano, Councillor Duncan Michano and
Councillor Arthur H. Fisher v. HMQRO.
71. Whitesand First Nation v. HMQRO.
72. Red Rock First Nation v. HMQRO.
73. Moose Deer Point First Nation v. HMQRO.
74. Kinew, Tobasonakwut v. HMQRC and HMQRO.
75. Garden River First Nation Reserve No. 14 v. HMQRO.
76. Mushkegouk Council (Onasburgh) v. HMQRO.
77. Kakeway, George v. HMQRO.
78. Sinclare, Alfred v. HMQRO.
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