FORM 18-K/A
For Foreign Governments and Political Subdivisions Thereof
__________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
AMENDMENT NO. 10 TO
ANNUAL REPORT
of
PROVINCE OF ONTARIO
(Canada)
(Name of Registrant)
___________________
Date of end of last fiscal year: March 31, 2008
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:
Vera Nicholas-Gervais
Head of the Provincial
Territorial and Parliamentary Affairs Section
Canadian Embassy
501 Pennsylvania Avenue N.W.
Washington, D.C. 20001
_________
Copies to:
Christopher J. Cummings
Shearman & Sterling LLP
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.
PROVINCE OF ONTARIO
The undersigned registrant hereby amends its Annual Report on Form 18-K for
the fiscal year ended March 31, 2008 (the "Annual Report") as follows:
The following additional exhibit is added to the Annual Report:
Exhibit (n) 2009 Ontario Economic Outlook and Fiscal Review
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,the
registrant has duly caused this amendment to the annual report to be signed on
its behalf by the undersigned, thereunto duly authorized, at Toronto, Ontario.
PROVINCE OF ONTARIO
(Name of registrant)
October 22, 2009 By: /s/ Irene Stich
___________________________________________
Name: Irene Stich
Title: Director, Capital Markets Operations
Capital Markets Division
Ontario Financing Authority
Exhibit Index
Exhibit (n): 2009 Ontario Economic Outlook and Fiscal Review
EXHIBIT (n)
[THE ONTARIO COAT OF ARMS]
2009 Ontario Economic Outlook and Fiscal Review
Background Papers
The Honourable Dwight Duncan
Minister of Finance
For general inquiries regarding the 2009 Ontario Economic Outlook and Fiscal Review,
Background Papers please call:
Toll-free English & French inquiries: 1-800-337-7222
Teletypewriter (TTY): 1-800-263-7776
For electronic copies of this document, visit our website at
www.fin.gov.on.ca
A printed copy of this publication can be ordered:
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By phone through the ServiceOntario Contact Centre
Monday to Friday, 8:30 AM to 5:00 PM
416 326-5300
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© Queen's Printer for Ontario, 2009
ISSN 1483-5967 (Print)
ISSN 1496-2829 (PDF/HTML)
Ce document est disponible en français sous le titre :
Perspectives économiques et revue financière de l'Ontario de 2009, Documents d'information
TABLE OF CONTENTS
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Foreword
CHAPTER I: CONFRONTING THE CHALLENGE
Confronting the Challenge
Introduction
Infrastructure Investments
CHAPTER II: ONTARIO'S ECONOMIC PERFORMANCE AND OUTLOOK
Ontario's Economic Performance and Outlook
The Global Recession and the Ontario Economy
Private-Sector Forecasts
Details of the Ontario Economic Outlook
Comparison to the 2009 Ontario Budget
CHAPTER III: FISCAL OUTLOOK
Section A: Ontario's Fiscal Outlook
2009-10 Fiscal Performance
2009-10 Revenue Changes Since 2009 Budget
Details of 2009-10 In-Year Revenue Changes
2009-10 Expense Changes Since 2009 Budget
Details of 2009-10 In-Year Expense Changes
Section B: Ontario's Medium-Term Fiscal Outlook
Medium-Term Revenue Outlook
Medium-Term Revenue Changes Since the 2009 Budget
Medium-Term Fiscal Outlook
Ontario's Expenditure Management Plan
Section C: Details of Ontario's Finances
Details of Ontario's Finances
CHAPTER IV: BORROWING AND DEBT MANAGEMENT
Long-Term Public Borrowing
Deficit and Borrowing
Other Changes in Financing
Debt
Debt-to-GDP Ratios
Total Debt Composition
Cost of Debt
Risk Exposure
CHAPTER V: CREATING A MORE COMPETITIVE AND MODERN TAX SYSTEM
Tax Cuts for a Stronger Ontario
Harmonized Sales Tax
Tax Cuts for People
Competitive Business Taxes
Supporting Innovation and Key Sectors
Streamlining the Ontario Digital Media Tax Credit for Large Game Developers
Enhancing the Production Services Tax Credit
CHAPTER VI: HOW TO PARTICIPATE IN THE 2010 PRE-BUDGET CONSULTATIONS
How to Participate in the 2010 Pre-Budget Consultations
LIST OF TABLES
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CHAPTER I: CONFRONTING THE CHALLENGE
Table 1: Selected Infrastructure Projects Currently Under Construction
Table 2: Over One Million Ontarians Use Skills Training Annually
Table 3: Postsecondary Education Stimulus Investments
Table 4: Postsecondary Education Stimulus Investments
Table 5: Acceleration of the Ontario Child Benefit
CHAPTER II: ONTARIO'S ECONOMIC PERFORMANCE AND OUTLOOK
Table 1: Ontario Economic Outlook
Table 2: External Variables — Private-Sector Forecast
Table 3: Impacts of Changes in Key Assumptions on Ontario Real GDP Growth
Table 4: Private-Sector Forecasts for Ontario Real GDP Growth
Table 5: The Ontario Economy, 2007 to 2012
Table 6: Changes in Key Economic Forecast Assumptions,
2009 Fall Economic Statement Compared to 2009 Ontario Budget
CHAPTER III: FISCAL OUTLOOK
Table 1: 2009-10 In-Year Fiscal Performance
Table 2: 2009-10 Summary of Revenue Changes Since Budget
Table 3: 2009-10 Summary of In-Year Expense Changes Since Budget
Table 4: 2009-10 Inter-Ministry Transfers Related to Federal-Provincial
Infrastructure Investments
Table 5: Summary of Medium-Term Revenue Outlook
Table 6: Summary of Medium-Term Revenue Changes Since Budget
Table 7: Medium-Term Fiscal Projections
Table 8: Medium-Term Fiscal Plan and Outlook
Table 9: Revenue
Table 10: Total Expense
Table 11: Other Expense
Table 12: Infrastructure Expenditures
Table 13: Ten-Year Review of Selected Financial and Economic Statistics
CHAPTER IV: BORROWING AND DEBT MANAGEMENT
Table 1: 2009-10 Borrowing Program: Province and OEFC
Table 2: Medium-Term Borrowing Outlook: Province and OEFC
CHAPTER V: CREATING A MORE COMPETITIVE AND MODERN TAX SYSTEM
Table 1: Program Parameters for the Proposed Ontario Sales Tax Credit and
Ontario Property Tax Credit
Table 2: Ontario Sales Tax Transition Benefit
LIST OF CHARTS
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CHAPTER I: CONFRONTING THE CHALLENGE
Chart 1: New Infrastructure Investments by Sector
Chart 2: Ontario Motor Vehicle Manufacturing Sales
Chart 3: Supporting Families Through the OCB and Social Assistance
Chart 4: Cutting Ontario's METR on New Business Investment in Half
CHAPTER II: ONTARIO'S ECONOMIC PERFORMANCE AND OUTLOOK
Chart 1: Ontario-U.S. Employment Declines
Chart 2: Ontario-U.S. Comparative GDP Declines
Chart 3: Provincial Real GDP Declines, 2009
Chart 4: Provincial Employment Change, 2009
Chart 5: Ontario Employment
Chart 6: Ontario Real GDP Growth
CHAPTER III: FISCAL OUTLOOK
Chart 1: Evolution of 2009-10 Revenue Outlook
Chart 2: Jurisdictional Comparison: 2009-10 Deficit-to-GDP
Chart 3: Program Expense per Capita
Chart 4: Composition of Revenue, 2009-10
Chart 5: Composition of Total Expense, 2009-10
Chart 6: Composition of Program Expense, 2009-10
CHAPTER IV: BORROWING AND DEBT MANAGEMENT
Chart 1: Borrowing — All Markets
Chart 2: Borrowing — Domestic Market
Chart 3: Debt
Chart 4: Net Debt-to-GDP, Provincial Comparison
Chart 5: Net Debt-to-GDP, G7 Countries and Ontario
Chart 6: Total Debt Composition
Chart 7: Effective Interest Rate (Weighted Average) on Total Debt
Chart 8: Net Interest Rate Resetting Exposure
Chart 9: Foreign Exchange Exposure
CHAPTER V: CREATING A MORE COMPETITIVE AND MODERN TAX SYSTEM
Chart 1: An RST vs. a Value-Added Tax — Illustrative Example
Chart 2: Impact of Proposed Sales Tax Changes and Tax Relief —
Single Parent on Ontario Works, 2 Children (ages 5 & 7)
Chart 3: Impact of Proposed Sales Tax Changes and Tax Relief —
Single Senior, Pension Income $20,000
Chart 4: Impact of Proposed Sales Tax Changes and Tax Relief —
Single Individual, $30,000
Chart 5: Impact of Proposed Sales Tax Changes and Tax Relief —
Couple, $70,000, 2 Children (ages 5 & 10)
Chart 6: Ontario's Competitiveness with the U.S.
Chart 7: Three Ways Businesses Would Save Under the HST
Chart 8: Cutting Ontario's METR on New Business Investment in Half
FOREWORD
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In the past year, the recession has had a significant impact on the global
economy on a scale that was unforeseen by anyone. Many jurisdictions are facing
sharp declines in revenues and increasing expenses as people turn to governments
for support. The significant deterioration of the global economy and the
tightening of credit have undermined business and consumer confidence. Ontario
is not immune to these broader forces: jobs have been lost, businesses have
closed and government revenues have declined dramatically. Virtually every
government around the world has had to update its economic and fiscal forecasts
to reflect these unanticipated economic challenges.
Over the past six years, the McGuinty government has laid the foundation for
economic success by investing in health care, education, infrastructure, the
environment and proposing tax cuts for Ontario families and businesses.
Throughout its term, the government has been committed to the priorities that
are most important to Ontarians and their families.
To be able to continue investing in key priorities while managing down the
deficit, the government, in concert with Ontarians, must focus its priorities
and make strategic, difficult choices. In the coming months, the government will
undertake a review of service delivery so that every dollar is spent even more
effectively. The Ontario Treasury Board will begin this review: it will be
charged with providing a plan to return the Province to a sustainable and firmer
fiscal footing, while protecting key services. Building on expenditure
management initiatives in the 2008 Economic Outlook and Fiscal Review, the 2010
Budget will provide an update on Treasury Board's progress.
Using the most recent information available at October 15, 2009, the 2009
Ontario Economic Outlook and Fiscal Review updates the economic assumptions from
the 2009 Ontario Budget. The impact of these changes is applied to the
government's revenue and expenditure projections, which revise the anticipated
financial results for the current fiscal year.
When the economic crisis hit, the McGuinty government took critical steps to
support Ontarians. Chapter I: Confronting the Challenge describes the
government's actions to mitigate the impacts of the downturn on Ontario families
at the first signs of the economic slowdown. The Province launched significant
investments in infrastructure and the auto sector to help preserve and protect
jobs. To help unemployed workers, the government established a number of
retraining programs such as Second Career and made improvements to Employment
Ontario. The government also sought to help out families most affected by the
downturn by taking steps to reduce poverty. Green energy initiatives were
launched to encourage green jobs. Tax changes to encourage the entertainment and
creative sectors to create jobs were proposed. All of these initiatives were
designed to help protect and sustain jobs in the short term and create a better
foundation for the economy in the long term.
As outlined in the 2009 Budget, the McGuinty government is also positioning the
economy for future growth and job creation by modernizing the tax system. It
proposed the Harmonized Sales Tax (HST) that, when implemented, would increase
competitiveness and business investment. As well, the government proposed
permanent income tax cuts for Ontario individuals, families and businesses. The
combined HST and Corporate Income Tax (CIT) cuts, together with other tax cuts,
would reduce the tax paid on income earned from new investment by half — a
significant incentive for new business investment and job creation in Ontario.
Chapter II: Ontario's Economic Performance and Outlook outlines the recent
performance of the economy and provides projections for future growth and
challenges. Like governments everywhere — Canada, the United States, Great
Britain, British Columbia and Alberta — Ontario is facing economic and
fiscal challenges. It appears that the grip of the economic crisis is starting
to loosen and the economy is showing signs of stabilization. Financial markets
have strengthened and equity markets and housing sales have risen. It will be
some time, however, before unemployment rates decline and gross domestic product
(GDP) returns to previous levels. Ontario's economic core is sound: strong
publicly funded health care and education systems, a highly skilled workforce
and growing industries in key sectors. These factors will provide the foundation
for a return to growth. Data tables on the Ontario economy are available at
www.fin.gov.on.ca/en/budget/fallstatement/2009/ecotables.html
In recent months, the impact of the global crisis has had a substantial impact
on Ontario's revenues. As outlined in the Public Accounts of Ontario 2008-2009,
Corporate Tax revenues fell by 48.1 per cent — an unprecedented amount.
Government revenue tends to trail economic performance. Whether economic
performance is up or down, it takes some time for that change to be reflected in
revenues. The Province's fiscal situation has been substantially altered since
the 2009 Budget. As in other jurisdictions, the government now projects a higher
deficit: $24.7 billion for 2009-10.
Ontario, along with many other jurisdictions around the world, is running a
deficit in order to sustain its core priorities: job creation, health care,
education and the establishment of a stronger economy after the recession. At
the same time, the government is committed to eliminating this deficit while
focusing on its priorities. Chapter III: Fiscal Outlook provides an update on
the Province's finances.
As a result of falling revenues, combined with increased investments in
infrastructure, in the auto sector and in other long-term initiatives to help
return Ontario to economic growth, public borrowing has increased. Chapter IV:
Borrowing and Debt Management details the Province's borrowing and debt
activities.
Chapter V: Creating a More Competitive and Modern Tax System provides further
details about the McGuinty government's proposed comprehensive tax package,
originally announced in the 2009 Budget.
The McGuinty government is positioning the province for long-term growth.
Chapter VI: How to Participate in the 2010 Pre-Budget Consultations invites
individuals, organizations and other partners to present their views on how to
manage Ontario's finances and protect public services in uncertain economic
times.
CHAPTER I
-------------------------
Confronting the Challenge
CONFRONTING THE CHALLENGE
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INTRODUCTION
The McGuinty government is helping Ontarians through the global recession by
keeping them working. Skills and training programs have been created for workers
who are transitioning to new careers. Assistance for the most vulnerable
Ontarians has also been readily available. Finally, the McGuinty government has
invested in long-term economic growth. Some major initiatives include:
o Infrastructure investments of $32.5 billion over two years to stimulate
economic growth and help preserve and create jobs across the province.
o Retaining jobs in the auto sector and maintaining the sector's major
contribution to the economy and to communities throughout Ontario.
o Skills and training initiatives that are helping unemployed workers retrain
for new careers and creating summer jobs for young people.
o Helping those most vulnerable to a downturn by accelerating the Ontario
Child Benefit phase-in and increasing social assistance rates.
o Investing through the Green Energy and Green Economy Act to help create
green economic opportunities for Ontario businesses.
o Enhancing tax credits available to the entertainment and creative
industries to attract investment and create jobs.
To build and strengthen Ontario's economy for the future, the McGuinty
government is proposing to modernize Ontario's tax system by cutting income
taxes for people and business, and by replacing the retail sales tax with a more
modern, value-added tax combined with the federal Goods and Services Tax (GST).
INFRASTRUCTURE INVESTMENTS
For six years, the McGuinty government has been investing in Ontario's schools,
hospitals, roads and public transit. In the 2009 Budget, the government
allocated $32.5 billion for infrastructure investments over two years to
stimulate economic growth, create short- and long-term jobs, and help Ontario
families both now and in the future.
These investments build on the government's $30 billion ReNew Ontario
infrastructure investment plan, which was completed in 2008-09, a full year
ahead of schedule. The ReNew Ontario investments supported more than 85,000 jobs
in 2007-08 and preserved and created more than 100,000 jobs in 2008-09. The
government's infrastructure investments are renewing and modernizing aging
infrastructure and helping to address the infrastructure deficit that had built
up over the three decades prior to 2003.
Ontario has moved quickly to allocate the stimulus funding announced in the 2009
Budget. The government received a tremendous response to its infrastructure
programs. Project applications were carefully reviewed by both the federal and
provincial governments and assessed against funding criteria, including
construction readiness.
[Chart 1, pie chart: New Infrastructure Investments by Sector]
In the seven months since the 2009 Budget, the government has approved over
2,600 new federal-provincial infrastructure projects. Approximately 30 per cent
of projects reporting are already under construction. Virtually all contribution
agreements are either signed or in the hands of recipients for signature.
Investments are taking place in key sectors with highways, roads and transit
projects accounting for just over half of the total. These projects will help to
improve public transit, reduce commute times and lower business transportation
costs.
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Selected Infrastructure Projects Table 1
Currently Under Construction
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Central
University of Toronto at Mississauga Laboratory Centre
Weston Road Resurfacing in York Region
Winston Churchill Blvd - Road Rehabilitation in Mississauga
Revitalization of Hanes Road in Huntsville
East
Southwest Transitway Extension in Ottawa
La Cité Collégiale Emergency Services Training Centre 911 Institute in Ottawa
Water Master Plan Implementation — Front Road in Kingston
Rehabilitation of Thomas Street in Greater Napanee
North
Highway 17 Gateway Rehabilitation Project in Kenora
Reconstructing and Upgrading Third Line in Sault Ste. Marie
Replacement of Barbers Bay Bridge in Timmins
Refurbishment of Public Works Garage/Fire Hall in Rainy River
West
Preston Auditorium Rehabilitation in Cambridge
Victoria Street Sewer Separation in Amherstburg
Calton Line Rehabilitation in Elgin County
Niagara College Applied Health Institute in Welland
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These investments are keeping Ontarians working in communities across Ontario.
Projects are now under construction that will enhance Ontario's long-term
competitiveness by raising productivity, while improving the quality of life of
Ontarians.
In the 2009 Budget, the McGuinty government also committed to modernizing
facilities and boosting the province's long-term research and skills training
capacity by providing $780 million in capital funding for Ontario's colleges and
universities. Every public college and university in the province has received
funding and many projects are already under construction.
As a result of the government's commitment, Ontario colleges and universities
plan to create over 36,000 new spaces by 2011, including 2,300 new
apprenticeship spaces. New classroom spaces will help to keep up with the
growing demand for postsecondary education in Ontario while preparing the highly
educated and skilled workforce the province needs to compete in the new economy.
Additional infrastructure investments are being made in all key sectors —
including water and environmental projects, health, education, culture, tourism,
sports and recreation, and social and affordable housing. These investments are
laying the foundation for economic growth.
Supporting the Auto Sector
The Ontario government has invested in the auto industry to help achieve
long-term viability and competitiveness, while also supporting workers and
communities. For example:
o Brampton - the Chrysler plant was saved and continues to operate, producing
the Charger;
o Ingersoll - the CAMI joint venture between GM and Suzuki produces the
Chevrolet Equinox;
o Windsor - in July, Chrysler Canada announced it would maintain 1,200 jobs
at its Windsor minivan plant;
o Oshawa - new products are being manufactured.
[Chart 2: Ontario Motor Vehicle Manufacturing Sales: line Graph]
The investments will be used for manufacturing, research and development, and
capital expenditure, and will help drive auto-sector manufacturing in the
province. By partnering with the Canadian and U.S. governments, Ontario is the
only subnational jurisdiction in North America to make these investments, which
are critical to the economic health of communities where the auto sector is the
major employer. With key automakers and more than 400 parts manufacturers in
Ontario, this crucial sector directly accounted for 3.7 per cent of Ontario's
gross domestic product (GDP) in 2008 and directly and indirectly supports
hundreds of thousands of workers, or about one in twenty working Ontarians. Auto
exports to the United States are one of Ontario's key trade drivers.
An innovative and competitive auto industry in Ontario will lead to the creation
and retention of high-value jobs in a new global marketplace for green
auto-parts manufacturing. The latest data indicate that Ontario's motor vehicle
manufacturing sales were $3.0 billion in August, double the $1.5 billion in
sales in January. Auto assembly and auto-parts output were up strongly over the
summer months, reflecting the ramping up of auto production following earlier
widespread shutdowns. Ontario continues to build more cars than any other state
or province in North America.
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"The emergence from bankruptcy of Chrysler and GM early this summer with most of
their productive capacity in the province still left standing — thanks in
no small part to unprecedented government rescue efforts and workers'
concessions —and the recent revival of motor vehicle sales in North America
have essentially put worst-case scenarios for Ontario to rest."
RBC Economics, September 2009
"Demand will rebound for the auto industry, and Canada will be a big winner so
long as the parties can work together to keep jobs here through the downturn."
Dennis DesRosiers, The Globe and Mail, March 11, 2009
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Training and Skills Investment
Ontario's highly educated and skilled workforce is a significant economic and
competitive advantage. The Province is building on this advantage through
investments in the skills of Ontarians. It has laid a solid foundation for
future prosperity through: the $6.2 billion Reaching Higher Plan for
postsecondary education, over $1 billion in annual Employment Ontario training
investments, and additional investments under the Skills to Jobs Action Plan
announced in the 2008 Budget.
In the 2009 Budget, the government announced further investments worth more than
$750 million over two years for new skills and enhanced training and literacy
initiatives, supported by enhancements to Canada-Ontario labour market
agreements. These investments are already having the desired impact, including
more than 104,000 employment opportunities for students this past summer.
As part of Employment Ontario, the Second Career program, along with the Rapid
Re-employment and Training Service (RRTS), were designed to provide $355 million
over three years to help 20,000 laid-off workers access the extensive training
they need to succeed in new jobs. The Second Career program has already exceeded
its three-year target in just 16 months, helping nearly 21,000 people receive
training.
Ontario offers a number of other training and employment services to help
unemployed workers meet the economic challenges facing them. For example, since
April 2008, over 27,000 Ontarians have participated in the Ontario Skills
Development program that provides short-term training and return-to-employment
assistance for unemployed workers. The RRTS Service has provided timely
counselling assistance to over 110,000 workers affected by layoffs and plant
closures since the program began in 2007.
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Over One Million Ontarians Use Skills Training Annually Table 2
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Selected Programs Clients Served Time Period(1)
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Second Career Program 20,939 Since June 2008
Summer Jobs and Services 104,140 April 1 to August 31, 2009
Rapid Re-employment and Training Services 110,000 Since January 2007
Ontario Skills Development Program 27,291 Since April 2008
Literacy and Basic Skills 83,984 Since April 2008
Apprenticeship Registration 40,900 Since April 2008
Employment Assistance Services(2) 299,305 Since April 2008
Job Creation Partnership(2) 1,712 Since April 2008
Job Connect(2) 426,714 Since April 2008
Self-Employment Benefit 5,178 Since April 2008
Targeted Wage Subsidy(2) 4,091 Since April 2008
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(1) Based on the most recent data available.
(2) Employment Assistance Services and Job Connect help clients prepare for,
find, get and keep jobs. Ontario Job Creation Partnership provides work
experience through local employers and community groups. Ontario Targeted
Wage Subsidies are used to encourage employers to permanently hire eligible
unemployed workers.
Source: Ontario Ministry of Training, Colleges and Universities.
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The 2009 Budget also announced support for the postsecondary education sector,
including capital funding. In May 2009, the Governments of Ontario and Canada
announced approximately $1.5 billion in joint funding for 49 capital projects at
colleges and universities. The Province also announced an additional $115
million for facilities renewal and eight strategic projects at institutions (see
Table 3).
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Postsecondary Education Stimulus Investments Table 3
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College Projects
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Algonguin College — Environmental Demonstration Centre for Construction Trades and Building Bridges
Algonquin College — Perth Campus Renewal
Cambrian College — Sustainable Energy Building and Renovations
Canadore College — Parry Sound Campus
Centennial College — Library and Academic Facility
Collège Boréal — Sudbury Campus Expansion (Phase 1)
Conestoga College — School of Health and Life Sciences
Conestoga College (Cambridge-Waterloo-Guelph) — School of Engineering and Information Technology
Confederation College — Regional Education Alliance for Community Health (REACH)
Durham College — Oshawa Campus Renovation and Expansion
Durham College — Whitby Expansion Project
Fanshawe College — Centre for Applied Transportation Technologies
George Brown College — The Centre for Health Sciences on Toronto Waterfront
Georgian College — Centre for Health and Wellness (Phase 1)
Humber College — Lakeshore Revitalization
La Cité Collégiale — Emergency Services Training Centre 911 Institute
Lambton College — Fire and 911 Training Centre
Loyalist College — Sustainable Skills, Technology and Life Sciences Centre
Mohawk College — Fennell Campus Project
Niagara College — Applied Health Institute
Northern College — Centre of Excellence for Trades and Technology
Sault College — Campus Redevelopment (Phase 1)
Seneca College — Newnham Campus Expansion (North York)
Sheridan College — New Mississauga Campus
Sir Sandford Fleming College — Campus Modernization
St. Clair College — Centre for Applied Health
St. Clair College — Chatham Revitalization (Chatham Campus Technology and Trades Addition)
St. Lawrence College — Campus Consolidation and Revitalization (Cornwall)
St. Lawrence College — Campus Revitalization (Brockville)
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Postsecondary Education Stimulus Investments Table 3
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University Projects
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Algoma University — Biosciences and Technology Convergence Centre
Brock University — Niagara Health & Bioscience Research Complex
Carleton University — Interdisciplinary Academic Building (River Site)
Centre for International Governance Innovation with University of Waterloo — Balsillie Centre of Excellence
Lakehead University — Campus Modernization
Laurentian University — Vale Inco Living with Lakes Centre
Le Collège Universitaire de Hearst — Archival Centre
McMaster University — Centre for Spinal Cord Injury and Cancer Education and Rehabilitation
McMaster University — Nuclear Research Project
Nipissing University — Campus Modernization
Ontario College of Art and Design — Building Acquisition
Queen's University — New School of Medicine Building
Ryerson University — Image Arts & New Media Teaching and Research Building Renewal
Trent University — Health Sciences Centre Symons Campus
University of Guelph — Development of an Environmental Cluster
University of Ontario Institute of Technology — Automotive Centre of Excellence
University of Ontario Institute of Technology — Energy Systems and Nuclear Science Research Centre
University of Ottawa — Vanier Hall Renovation and Tower Addition, Faculty of Social Sciences
University of Toronto — Innovation Centre for the Canadian Mining Industry (St. George Campus)
University of Toronto Mississauga — Mississauga Laboratory Centre
University of Toronto Scarborough — Instructional Lab Project
University of Waterloo — Engineering and Math Project
University of Waterloo — Faculty of Environment Project
University of Western Ontario — Ivey School of Business
University of Windsor — Centre for Engineering Innovation
Wilfrid Laurier University — Research and Academic Centre, Brantford (Phase A)
York University — Life Sciences Centre
York University — Osgoode Renovation and Expansion
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These investments are providing an immediate economic stimulus for Ontario's
economy and will create jobs in construction, and for engineers, architects,
other tradespeople and technicians. They will also help improve teaching
facilities and build the infrastructure needed to keep Ontario's colleges and
universities at the forefront of scientific advancement.
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Postsecondary Education Stimulus Investments ($ Millions) Table 4
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Institutions/Programs No. of Provincial Federal Institution/ Total
Major Contribution Contribution Other Cost
Projects Contribution
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Joint Federal-Provincial Knowledge Infrastructure Program Investments(1)
Colleges 25 402.9 291.8 98.6 793.3
Universities 24 578.0 487.2 257.5 1,322.7
Federal-Provincial Investment Subtotal 49 980.9 779.0 356.1 2,116.0
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Other Provincial Postsecondary Education Stimulus Investments
Strategic Capital Infrastructure
Program 7 55.0 - - -
Facilities Renewal Program(2) 40.0 - - -
Mohawk College Investment 1 20.0 - - -
Other Provincial Investment Subtotal 8 115.0 - - -
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Postsecondary Stimulus
Investments Total 57 1,095.9 779.0 356.1 2,116.0
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(1) Includes previous provincial investments of $299 million towards projects
under the Knowledge Infrastructure Program. Federal Contribution does not
include program administration fee of $962,000.
(2) The Facilities Renewal Program will support a number of small scale renewal
projects at all Ontario institutions.
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Reducing Poverty
The Ontario government is committed to reducing poverty and increasing Ontario's
economic potential. In 2008, the McGuinty government announced a comprehensive
and long-term Poverty Reduction Strategy, to provide children and their families
with the support they need and bring about opportunities for success in life.
The Strategy set out a goal of reducing the number of children living in poverty
by 25 per cent over five years. This would lift about 90,000 children out of
poverty. This year, the government passed the Poverty Reduction Act, 2009, which
will help ensure future governments keep poverty reduction as a priority.
Through a variety of programs designed to reduce poverty, the government is
already making a real difference in the lives of people living in poverty. These
efforts will lessen the suffering of families hurt by the global economic
recession.
Supporting Incomes
In July 2009, the Ontario Child Benefit (OCB) was phased in two years ahead of
schedule to reach a maximum of $1,100 annually per child, as announced in the
2009 Budget. This measure provides a significant increase in the cash benefits
that low- and moderate-income families receive and supports families adversely
affected by the current economic downturn. The OCB acceleration will provide
over $400 million more in children's benefits between 2009-10 and 2011-12. Over
one million children benefit annually from the OCB.
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Acceleration of the Ontario Child Benefit Table 5
(Maximum Annual $ Per Child Per Benefit Year(1))
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2008-09 2009-10 2010-11 2011-12
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Previously Scheduled OCB Levels 600 805 900 1,100
Accelerated OCB Levels 600 1,100 1,100 1,100
Increase due to OCB Acceleration - 295 200 -
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(1) The OCB benefit year is from July 1 to June 30. Source: Ontario Ministry of Finance
- ----------------------------------------------------------------------------------------------------------
On November 30 and December 1, 2009, adult basic needs allowances and maximum
shelter allowances for recipients of the Ontario Disability Support Program and
Ontario Works, respectively, will increase by two per cent. Other social
assistance benefits, including Temporary Care Assistance and Assistance for
Children with Severe Disabilities, will increase by the same amount. The
Ministry of Health and Long-Term Care comfort allowance will also increase by
two per cent.
[Chart 3: Supporting Families Through the OCB and Social Assistance: bar graph]
After the rate increase and OCB acceleration, a single parent on Ontario Works
with two children aged five and seven will have an annualized income of $22,730—
$1,110 higher than in 2008. This is an increase of $5,670, or 33 per cent, from
the family's 2003 annualized income of $17,060 (see Chart 3).
The McGuinty government increased social assistance rates by three per cent in
the 2004 Budget and by two per cent in each of the 2006, 2007 and 2008 Budgets.
With the 2009 rate increase, social assistance benefits, with compounding, will
be 11.5 per cent higher than when the government took office.
With the proposed personal income tax cuts in the 2009 Budget, approximately
90,000 lower-income taxpayers would no longer pay Ontario personal income tax.
Providing Shelter
The 2009 Budget announced that, together with the federal government, the
Province would invest $1.2 billion over two years in housing initiatives that
support the government's Poverty Reduction Strategy. These investments include
more than $700 million to repair social housing units through the Social Housing
Renovation and Retrofit Program. In addition, more than $360 million will be
provided to create affordable housing units for low-income seniors and persons
with disabilities, and $175 million directed to create new homes for low-income
families, senior citizens, persons living with mental illness and victims of
domestic violence.
The 2009 Budget also provided more than $5 million annually to stabilize funding
for Rent Banks. Since 2004, the government has provided nearly $24 million to
municipalities for rent banks and has assisted over 15,500 low-income
households.
Support for Seniors
As announced in the 2008 Budget, the Ontario Senior Homeowners' Property Tax
Grant is providing grants of up to $250 to help low- to middle-income senior
homeowners pay their 2009 property taxes. Starting in 2010, the maximum grant
amount will double to $500. Over the next five years, the grant will provide
about $1 billion in property tax relief to over 600,000 seniors.
Since 2003, the government has made several improvements to the Ontario Property
and Sales Tax Credits to ensure they better reflect circumstances facing
low-income seniors. The 2009 Budget proposed to further increase the threshold
at which senior couples' benefits begin to be reduced, to ensure that senior
couples receiving the guaranteed minimum level of income from governments
receive the full benefit from these credits. Starting in 2010, the Ontario
Property and Sales Tax Credits would be replaced with separate and enhanced tax
credits.
The 2009 Budget announced the government's intention to provide retirees with
greater access to locked-in funds by increasing from 25 per cent to 50 per cent,
unlocking of new Life Income Funds (LIFs), effective January 1, 2010. In
addition, seniors who purchased a new LIF after January 1, 2008, will have an
opportunity to unlock an additional 25 per cent of amounts previously
transferred into their existing fund. Remaining old LIFs and Locked-in
Retirement Income Funds (LRIFs) will be harmonized with the updated new LIF
rules. The Pension Benefits Act (PBA) regulation has now been amended to
implement these changes.
Green Economy
The Ontario government is also addressing important environmental issues such as
climate change while encouraging the creation of green jobs. The Green Energy
and Green Economy Act, combined with more than $300 million in new initiatives
announced in the 2009 Budget, are helping Ontario make progress on climate
change. These measures establish the foundation for a green economy to position
Ontario as a world leader of green energy.
The Green Energy and Green Economy Act is helping to ensure Ontario's green
economic future by attracting new investment in the renewable energy sector.
Since the Green Energy and Green Economy Act was passed this spring, Ontario has
asked Hydro One to immediately proceed with planning and implementing major
transmission projects across Ontario. About $2.3 billion will be spent by Hydro
One on transmission and distribution projects over the next three years.
The launch of the Feed-in Tariff program on October 1, 2009 will attract further
investments in renewable energy projects across Ontario.
Ontario has also demonstrated significant progress on Canada's largest climate
change initiative as Ontario Power Generation prepares to close four
coal-fuelled power units. This will help move the province to electricity
generated from greener sources, which will increase investment and opportunities
in Ontario's green economy.
The Province has continued to build on this foundation with the introduction of
legislation that, if passed, would give the government authority to set up a
greenhouse-gas emission trading system in Ontario. The proposed act would enable
Ontario to link to other North American and international cap-and-trade systems.
Linked systems provide maximum trading opportunities and reduce costs for
companies participating in a cap-and-trade system.
Supporting the Knowledge-Based Economy
Ontario has the third-largest entertainment and creative sector in North
America, after California and New York, and is a solid international competitor
in the rapidly growing interactive digital media sector.
The government's ongoing support is helping to strengthen the competitiveness of
Ontario's entertainment and creative industries, an important component of the
new knowledge-based economy.
Interactive Digital Media Sector
The Ontario Interactive Digital Media Tax Credit is a refundable tax credit
available to qualifying corporations for expenditures related to the creation,
marketing and distribution of eligible interactive digital media products.
The 2009 Budget proposed to significantly enhance the tax credit rates and
extend the tax credit to more digital media game developers.
To strengthen Ontario's competitiveness for investment in this sector, the
government is proposing to streamline support for large, specialized game
developers. (See Chapter V: Creating a More Competitive and Modern Tax System.)
Enhancing the Ontario Production Services Tax Credit
The Ontario Production Services Tax Credit (OPSTC) is a 25 per cent refundable
tax credit for qualifying labour expenditures available to corporations for
qualifying foreign film and television production services and non-certified
domestic film and television productions in Ontario.
- --------------------------------------------------------------------------------
"It [expanding the OPSTC] will ensure Ontario continues to attract productions
that generate billions of dollars in economic activity, protecting our
infrastructure and creating jobs throughout the industry."
Brian Topp, Co-Chair, FilmOntario, June 29, 2009
- --------------------------------------------------------------------------------
As announced on June 29, 2009, effective for qualifying expenditures incurred
after June 30, 2009, the OPSTC would be expanded to additional production
expenditures incurred in Ontario, including eligible service contracts as well
as the purchase or rental of qualifying tangible properties, such as equipment
and studio rentals.
Tax Cuts and the Harmonized Sales Tax Will Lead to Economic Growth
- --------------------------------------------------------------------------------
"An immediate priority for Ontario is to move toward harmonizing our provincial
sales tax with the federal GST, converting it to a value added tax. Research by
us and others shows that this is the most effective tax change to stimulate
investment and job creation."
Roger Martin, Dean of the Rotman School of Management, University of Toronto,
and Chair, Task Force on Competitiveness, Productivity and Economic Progress,
Sixth Annual Report, November 2007
- --------------------------------------------------------------------------------
Sales tax harmonization is the single-most important thing Ontario can do to
increase long-term economic growth. The proposed move to a value-added sales
tax, together with other tax changes would increase Ontario's competitiveness
dramatically by cutting the marginal effective tax rate (METR)(1) on new
business investment in half. A lower METR is important for attracting new
investment. Ontario's METR is currently well above the average for the
industrialized countries that are members of the Organisation for Economic
Co-operation and Development (OECD). The measures proposed in the 2009 Budget
would bring Ontario's METR below that average in 2010, as seen in Chart 4.
[Chart 4: Cutting Ontario's METR on New Business Investment in Half: bar graph]
Studies show that the proposed comprehensive tax package would provide Ontario's
economy with the boost in competitiveness required to meet the growing
challenges of an integrated global economy. The recent and proposed tax cuts
complement the government's investments in infrastructure, research, training
and education, and help ensure continued growth in Ontarians' standard of
living.
Making Progress by Working with the Federal Government
Ontarians expect governments at all levels to work together. That is why
Ontario, along with the federal government, is providing significant and timely
stimulus to the economy through investments in infrastructure and financial
support for Ontario's auto sector.
The Ontario and federal governments are also working together to promote
long-term economic development and growth. Supported by federal funding, Ontario
has made significant investments in the skills of Ontarians.
In addition, the proposed sales tax harmonization is only possible through
working in partnership with the federal government. This measure, along with the
comprehensive tax package proposed in the 2009 Budget, would make Ontario one of
the most attractive jurisdictions in the industrialized world for new
investments.
Ontario values this partnership with the federal government and appreciates the
significant investments that have been made. While much has been accomplished,
the federal government needs to do more to support Ontarians in addressing
current challenges.
The federal government announced changes to Employment Insurance (EI) that will
better support laid-off workers in Ontario. However, eligibility rules for EI
income support continue to be particularly unfavourable to most of Ontario's
workforce. The Province believes that laid-off workers should be treated
equitably regardless of where they live.
The federal government can also do more to ensure long-term support for
Ontario's most vulnerable citizens by reconsidering its decision to terminate
the Early Learning and Child Care agreement and by increasing support for
low-income individuals and families through further enhancements to the Working
Income Tax Benefit and the National Child Benefit Supplement.
Further, investing in people through expanded training and postsecondary
education opportunities requires deeper investment by the federal government.
Finally, the Ontario government considers a healthy pension and retirement
income system to be an integral part of Canada's income security system and
believes that the security of retirement income will become a defining public
issue in the years to come. Given the importance of pensions to Ontarians, the
Ontario government is calling on the federal government to host a National
Summit on pensions and retirement income as endorsed by the Council of the
Federation in August.
- --------------------------------------------------------------------------------
(1) The METR is a comprehensive measure of the tax that applies to an
incremental dollar of income from new capital investment. It reflects the
combined effect of federal and provincial corporate income taxes, rules
related to depreciation, investment tax credits, capital and sales taxes.
CHAPTER II
------------------------------
Ontario's Economic Performance
and Outlook
ONTARIO'S ECONOMIC PERFORMANCE AND OUTLOOK
- --------------------------------------------------------------------------------
This section outlines Ontario's current macroeconomic outlook, which underlies
the fiscal plan.
THE GLOBAL RECESSION AND THE ONTARIO ECONOMY
Like other jurisdictions around the world, the Ontario economy has been hard hit
by the global recession and financial crisis. As of the second quarter of 2009,
Ontario real gross domestic product (GDP) was 5.0 per cent below the
pre-recession peak. Employment has declined by 205,200 jobs, or 3.0 per cent,
from a year ago. Since 2003, Ontario has created 291,900 net new jobs.
Although there are signs that the economy has stabilized, the pace of growth is
expected to be gradual. Gross domestic product is not expected to return to its
pre-recession level until the second quarter of 2011. Because employment tends
to lag GDP growth during a recovery — businesses increase the number of
hours worked for existing employees before hiring new workers — employment
is not projected to reach its pre-recession level until late 2011.
- -----------------------------------------------------------------------------------------------------------------
Ontario Economic Outlook Table 1
(Per Cent)
- -----------------------------------------------------------------------------------------------------------------
2005 2006 2007 2008 2009p 2010p 2011p 2012p
----------------------------------------------------------------------------------------
Real GDP Growth 2.9 2.4 2.1 (0.5) (3.5) 2.0 3.0 3.3
Nominal GDP Growth 4.1 4.1 4.5 0.5 (3.8) 3.6 4.7 5.1
Employment Growth 1.3 1.5 1.6 1.4 (2.6) 0.6 2.3 2.5
CPI Inflation 2.2 1.8 1.8 2.3 0.4 1.9 2.5 2.0
- -----------------------------------------------------------------------------------------------------------------
p = Ministry of Finance planning projection.
Sources: Statistics Canada and Ontario Ministry of Finance.
- -----------------------------------------------------------------------------------------------------------------
For planning purposes, the Ministry of Finance is assuming a decline of 3.5 per
cent in Ontario real GDP in 2009, followed by gains of 2.0 per cent in 2010 and
3.0 per cent in 2011. The Ministry of Finance's key economic planning
assumptions, finalized on October 15, 2009, are more conservative than the
average private-sector forecasts available at that time.
Impact of the Global Financial and Economic Crisis
Over the past year, the global recession has had a severe impact on
jurisdictions around the world — and Ontario is no exception. The decline
in global trade and a sharp drop in consumer and business spending stemmed from
the collapse in confidence following the financial crisis that hit last fall.
Lower international demand led to a sharp drop in Ontario's exports, which in
turn forced businesses to cut production and employment. The decline in economic
activity led to a drop in corporate profits of 49.7 per cent, lower business
investment, rising unemployment and lower incomes.
[Chart 1: Ontario—U.S. Employment Declines: bar graph]
Ontario's real GDP declined by 1.0 per cent in the second quarter of 2009,
following sharper declines in the previous two quarters (-2.1 per cent in the
first quarter of 2009 and -1.5 per cent in the fourth quarter of 2008). Since
the fourth quarter of 2007, Ontario real GDP has declined by 5.0 per cent.
Private-sector forecasters estimate Ontario's decline in real GDP in 2009 to be
similar to that of the neighbouring Great Lakes States — Ontario's major
competitors — though larger than that of the United States as a whole.
Ontario has seen less severe declines in employment so far this year (-2.6 per
cent) than neighbouring Great Lakes States and the United States as a whole
(-3.8 per cent). Entering the downturn, Ontario's housing market was far
healthier than that of the United States. Canada's sound financial institutions
and various actions taken by the McGuinty government have also mitigated the
impact of the global recession on the Ontario economy. See Chapter I:
Confronting the Challenge for more information on actions the government is
taking.
[Chart 2: Ontario—U.S. Comparative GDP Declines: bar graph]
However, the global economic downturn hit Ontario's economy relatively hard
compared to other provinces. Manufacturing, especially the auto sector, is a
large and important part of Ontario's economy and it has been particularly
affected by the recession. Declining U.S. demand caused Ontario auto
manufacturing sales to fall by 37 per cent over the first eight months of 2009,
compared to the same period in 2008. Ontario's decline in real GDP in 2009 is
expected to be significantly larger than Canada's as a whole, and that of all
the other provinces except Newfoundland and Labrador.
[Chart 3: Provincial Real GDP Declines, 2009: bar graph]
Because of the size of the auto sector, Ontario has also had larger job losses
than Canada as a whole and all the other provinces except Newfoundland and
Labrador and British Columbia. Ontario automotive employment has fallen by 25.5
per cent over the first nine months in 2009 compared to the same period in 2008.
[Chart 4: Provincial Employment Change, 2009: bar graph]
Uncertain and Challenging Global Economic Environment
Ontario's economic outlook is very dependent on economic and financial
conditions outside its own border, particularly U.S. economic growth, oil
prices, the Canadian dollar exchange rate and interest rates. Private-sector
forecasts for these variables are summarized in the table below.
- -----------------------------------------------------------------------------------------------------------------
External Variables Table 2
Private-Sector Forecast
- -----------------------------------------------------------------------------------------------------------------
2010 2011 2012
---------------------------------------------------------------------
Low Avg. High Low Avg. High Low Avg. High
---------------------------------------------------------------------
U.S. Real GDP Growth (Per Cent) 1.1 2.5 3.7 1.3 3.1 4.4 1.9 3.3 5.3
Crude Oil ($US per Barrel) 66.5 74.2 90.0 68.9 77.5 86.0 74.2 83.8 95.6
Canadian Dollar (Cents US) 88.4 93.7 99.3 90.8 94.5 102.0 92.3 96.6 105.0
Three-Month Treasury Bill Rate (Per Cent) 0.3 0.7 1.4 1.4 2.4 3.6 2.9 3.7 4.6
10-Year Government Bond Rate (Per Cent) 3.5 3.8 4.3 4.0 4.3 4.5 4.3 4.8 5.2
- -----------------------------------------------------------------------------------------------------------------
Sources: Blue Chip Economic Indicators (October 2009) and Ontario Ministry of Finance Survey of Forecasts
(October 15, 2009).
- -----------------------------------------------------------------------------------------------------------------
The global economy remains vulnerable to a number of risks that could adversely
affect future growth.
For instance, any further rounds of financial market turbulence could once again
limit access to financing and reduce confidence and wealth, which could hinder
any economic growth.
The U.S. economy, critically important for Ontario's export-oriented businesses,
is beginning to emerge from one of the deepest recessions on record. However,
job losses continue, consumer spending remains weak and business investment
continues to soften.
Projected increases in oil prices, a strengthening Canadian dollar and rising
interest rates all represent challenges for the Ontario economy going forward.
The wide range of forecasts in Table 2 above shows how difficult it is to
predict economic performance, creating risks to the Ontario economy. Table 3
shows the implications of changes in key external factors, under the assumption
that no other variables will change.
- -----------------------------------------------------------------------------------------------------------------
Impacts of Changes in Key Assumptions on Ontario Real GDP Growth(1) Table 3
(Percentage Point Increase)
- -----------------------------------------------------------------------------------------------------------------
First Year Second Year
---------------------------------------------
Canadian Dollar Depreciates by Five Cents US 0.1 to 0.8 0.5 to 1.2
World Crude Oil Prices Decrease by $10 US per Barrel(2) 0.1 to 0.3 0.1 to 0.3
U.S. Real GDP Growth Increases by One Percentage Point 0.3 to 0.7 0.4 to 0.8
Canadian Interest Rates Decrease by One Percentage Point 0.1 to 0.5 0.2 to 0.6
- -----------------------------------------------------------------------------------------------------------------
(1) Impacts based on changes being sustained. The estimated impacts shown in
the table are most applicable to small changes in key assumptions. Very
large shocks are likely to have less predictable effects, particularly due
to their potential impact on confidence and expectations.
(2) The impact estimates for lower world oil prices reflect the positive effect
of lower oil prices on Ontario alone, and exclude the stimulative impact on
U.S. and rest-of-world economic activity.
Source: Ontario Ministry of Finance.
- -----------------------------------------------------------------------------------------------------------------
Ontario Economy Beginning to Stabilize
Recent economic data provide early signs that the economy is beginning to
stabilize. Financial markets have normalized to a large degree while equity
markets and housing sales have moved higher. These developments have helped
improve both consumer and business confidence. The Conference Board of Canada's
index of consumer attitudes for Ontario has increased for nine consecutive
months and is up almost 43 per cent from a low in December 2008.
[Chart 5: Ontario Employment: line graph]
Ontario's international merchandise exports increased in June, July and August,
reflecting gains in exports of automotive products. Manufacturing sales are up
9.3 per cent from the recent low in May.
After declines over the first five months of 2009, Ontario's labour market has
shown signs of stabilizing, with modest job gains in the past four months.
Wholesale trade, an important indicator of the overall strength of the economy,
has increased over the past six months, up almost nine per cent from the recent
low in January. Housing resales have increased in seven of the past eight months
and are up over 60 per cent from the low in January.
Though some economic signs are improving, the damage caused by the global
recession has been considerable. Household wealth and consumer confidence are
still below pre-recessionary levels while retail sales remain 5.1 per cent
lower. Compared to a year ago, manufacturing sales are down 19 per cent,
international exports are down over 28 per cent and wholesale trade has fallen
6.7 per cent. Even with the recent growth, housing resales are down by 1.4 per
cent so far this year compared to the same period a year ago and employment is
still lower by 205,200 jobs since the peak in September 2008. The measures
introduced in Ontario's 2009 Budget Confronting the Challenge are helping
families weather the global economic storm.
Outlook for Ontario Economic Growth
Based on the most up-to-date information, Ontario's economy is expected to grow
by a modest 2.0 per cent in 2010 and then by 3.0 per cent in 2011 and 3.3 per
cent in 2012. Despite this growth, it will take Ontario considerable time to
regain its pre-recession level of activity.
[Chart 6: Ontario Real GDP Growth: bar graph]
Improving U.S. and global demand is expected to contribute to a turnaround in
Ontario's export growth. As well, stronger growth in other provinces will boost
interprovincial exports. The domestic economy is expected to be a source of
strength, supported by a healthy housing market, gains in consumer spending and
increased business investment. The prospects for strong growth in investment are
even better, due to the major increase in tax competitiveness that would result
from the 2009 Budget's proposed tax cuts and Harmonized Sales Tax. See Chapter
V: Creating a More Competitive and Modern Tax System for more information on the
benefits of Ontario's comprehensive tax package. It is projected that this will
lead to strengthened business investment in both machinery and equipment as well
as commercial and industrial construction.
Private-sector forecasters project 360,000 jobs will be created over the 2010 to
2012 period and employment is expected to reach its pre-recession level during
the latter half of 2011. According to private-sector forecasters, the
unemployment rate is expected to edge up from 9.3 per cent in 2009 to 9.9 per
cent in 2010 as the number of job seekers outpaces the number of people getting
jobs. Over the medium term, Ontario's unemployment rate is expected to remain
elevated, declining to 7.8 per cent in 2012.
Future gains in employment and improving household wealth are projected to
support an increase in consumer spending of 1.2 per cent in 2010, 2.7 per cent
in 2011 and 3.3 per cent in 2012. The number of home resales is expected to rise
by 3.6 per cent in 2010 and by an average of 3.6 per cent annually in 2011 and
2012. The resale market should support moderate price gains of 2.0 per cent in
2010 and average 3.0 per cent a year in 2011 and 2012. Current tight conditions
in the resale market are expected to ease as housing starts expand with growing
housing demand, rising from 50,000 units in 2010 to 70,000 units in 2012.
Sales tax harmonization, together with Corporate Income Tax cuts and elimination
of the Capital Tax, would significantly increase Ontario's competitiveness. The
dramatically lower marginal effective tax rate on new investment would spur
capital investment in the province. The substantial increases in capital
investment in Ontario would help create new, higher-paying jobs for Ontario
workers and help increase long-term economic growth in the province.
PRIVATE-SECTOR FORECASTS
Table 4 shows current private-sector forecasts for the Ontario economy.
- -----------------------------------------------------------------------------------------------------------------
Private-Sector Forecasts for Ontario Real GDP Growth Table 4
(Per Cent)
- -----------------------------------------------------------------------------------------------------------------
2009 2010 2011 2012
------------------------------------------
Conference Board of Canada (October) (3.0) 3.2 4.0 4.5
IHS Global Insight (July) (2.9) 1.9 3.3 3.5
Centre for Spatial Economics (July) (3.6) 2.0 3.3 3.7
University of Toronto (October) (3.9) 2.4 3.8 3.5
RBC Financial Group (September) (3.1) 2.6 - -
Scotiabank Group (October) (3.0) 2.6 - -
TD Bank Financial Group (October) (2.7) 2.6 3.1 -
Desjardins Group (September) (3.8) 2.0 2.5 2.5
BMO Capital Markets (October) (3.1) 2.7 - -
CIBC World Markets (October) (3.5) 2.1 3.5 -
- -----------------------------------------------------------------------------------------------------------------
Private-Sector Survey Average (3.3) 2.4 3.4 3.5
- -----------------------------------------------------------------------------------------------------------------
Ontario's Planning Assumption (3.5) 2.0 3.0 3.3
- -----------------------------------------------------------------------------------------------------------------
Sources: Ontario Ministry of Finance and Ontario Ministry of Finance Survey of Forecasts (October 15, 2009).
- -----------------------------------------------------------------------------------------------------------------
The Ministry of Finance consults extensively with private-sector forecasters to
ensure its economic projections are reasonable and its economic and fiscal
policy is appropriate. The Ontario government's projections are based on an
average of private-sector forecasts. In order to plan prudently, the government
is more conservative in its projections.
The Ontario Economic Forecast Council was established as part of the Fiscal
Transparency and Accountability Act, 2004 to provide advice on macroeconomic
forecasts and assumptions. The council members are Peter Dungan from the
University of Toronto, Glen Hodgson from the Conference Board of Canada, Ernie
Stokes from the Centre for Spatial Economics and Dale Orr from Dale Orr Economic
Insight. The Minister of Finance met with Council members and other
private-sector forecasters in the process of preparing the 2009 Ontario Economic
Outlook and Fiscal Review to hear their views on the economic outlook and how
the government should respond to the increase in the deficit, given the current
challenging economic climate.
DETAILS OF THE ONTARIO ECONOMIC OUTLOOK
The following table shows details of the Ministry of Finance's economic outlook
for 2009 to 2012.
- -----------------------------------------------------------------------------------------------------------------
The Ontario Economy, 2007 to 2012 Table 5
(Per Cent Change)
- -----------------------------------------------------------------------------------------------------------------
Actual Projected
-------------------------------------------------------------------------
2007 2008 2009 2010 2011 2012
-------------------------------------------------------------------------
Real Gross Domestic Product 2.1 (0.5) (3.5) 2.0 3.0 3.3
Personal Consumption 3.9 2.7 (0.2) 1.2 2.7 3.3
Residential Construction 1.9 (2.2) (9.5) 1.3 4.3 3.5
Non-residential Construction 18.1 (9.7) (21.6) 1.0 1.9 4.1
Machinery and Equipment 5.0 0.6 (18.4) 1.5 5.0 6.2
Exports 0.5 (5.5) (15.9) 2.0 5.2 5.3
Imports 3.3 (2.2) (16.1) 3.0 5.0 5.0
Nominal Gross Domestic Product 4.5 0.5 (3.8) 3.6 4.7 5.1
Other Economic Indicators
Retail Sales 3.9 3.5 (3.5) 3.6 4.1 4.0
Housing Starts (000s) 68.1 75.1 48.5 50.0 60.0 70.0
Personal Income 5.0 3.8 (0.7) 2.6 4.4 5.1
Labour Income 4.5 4.2 (1.2) 2.1 4.4 5.1
Corporate Profits 0.3 (14.2) (38.9) 23.5 14.4 6.5
Consumer Price Index 1.8 2.3 0.4 1.9 2.5 2.0
Labour Market
Employment 1.6 1.4 (2.6) 0.6 2.3 2.5
Job Creation (000s) 101 94 (171) 40 152 168
Unemployment Rate (per cent) 6.4 6.5 9.3 9.9 9.0 7.8
Key External Variables
Crude Oil ($ US per Barrel) 72.3 99.6 61.2 78.5 81.8 83.7
U.S. Real Gross Domestic Product 2.1 0.4 (2.5) 2.5 3.1 3.3
Canadian Dollar (Cents US) 93.1 93.7 88.0 95.0 96.0 97.0
3-month Treasury Bill Rate 4.1 2.3 0.3 0.7 2.4 3.7
10-year Government Bond Rate 4.3 3.6 3.3 3.8 4.3 4.8
- -----------------------------------------------------------------------------------------------------------------
Sources: Statistics Canada, Canada Mortgage and Housing Corporation, Bank of Canada, New York Mercantile
Exchange, U.S. Bureau of Economic Analysis, Blue Chip Economic Indicators and Ontario Ministry of Finance.
- -----------------------------------------------------------------------------------------------------------------
COMPARISON TO THE 2009 ONTARIO BUDGET
Table 6 compares current economic assumptions with those in the 2009 Budget.
- -----------------------------------------------------------------------------------------------------------------
Changes in Key Economic Forecast Assumptions, Table 6
2009 Fall Economic Statement Compared to 2009 Ontario Budget (Per Cent Change)
- -----------------------------------------------------------------------------------------------------------------
2009 2010 2011
------------------------------------------------------------------------------
Budget Fall Update Budget Fall Update Budget Fall Update
------------------------------------------------------------------------------
Real Gross Domestic Product (2.5) (3.5) 2.3 2.0 3.3 3.0
Nominal Gross Domestic Product (2.4) (3.8) 3.6 3.6 4.7 4.7
Retail Sales (1.0) (3.5) 3.8 3.6 4.0 4.1
Housing Starts (000s) 50.0 48.5 55.0 50.0 65.0 60.0
Personal Income 0.6 (0.7) 3.6 2.6 4.6 4.4
Labour Income 0.3 (1.2) 3.2 2.1 4.2 4.4
Corporate Profits (24.8) (38.9) 9.5 23.5 8.2 14.4
Employment (2.0) (2.6) 0.8 0.6 1.6 2.3
Job Creation (000s) (135) (171) 54 40 107 152
Key External Variables
Crude Oil ($ US per Barrel) 47.3 61.2 55.5 78.5 60.4 81.8
U.S. Real Gross Domestic Product (2.6) (2.5) 1.9 2.5 3.4 3.1
Canadian Dollar (Cents US) 80.0 88.0 85.0 95.0 88.0 96.0
3-month Treasury Bill Rate 0.6 0.3 1.1 0.7 3.1 2.4
10-year Government Bond Rate 2.9 3.3 3.3 3.8 4.4 4.3
- -----------------------------------------------------------------------------------------------------------------
Sources: Blue Chip Economic Indicators and Ontario Ministry of Finance.
- -----------------------------------------------------------------------------------------------------------------
CHAPTER III
--------------
Fiscal Outlook
SECTION A: ONTARIO'S FISCAL OUTLOOK
The government has taken decisive measures to reduce the impact on Ontario of
the severe global recession and financial crisis by making substantial
investments in infrastructure, supporting the automotive sector, investing in
skills training, and sustaining public services. The latest economic forecasts
indicate that the Ontario economy is beginning to stabilize, having benefited
from the government's stimulus initiatives and increased household spending.
The government is now projecting deficits of $24.7 billion in 2009-10, $21.1
billion in 2010-11 and $19.4 billion in 2011-12. These projections reflect a
reduction in anticipated revenues due to lower 2008-09 results and a weaker
economy in 2009. The decision to run a deficit also demonstrates the
government's commitment to help Ontario families during these difficult times by
maintaining key public services while also positioning the province to be
competitive in the global market.
This chapter provides an update to the fiscal outlook for 2009-10 and the
medium-term forecast for 2010-11 and 2011-12.
2009-10 FISCAL PERFORMANCE
- --------------------------------------------------------------------------------
The fiscal outlook for 2009-10 reflects a weaker Ontario economy than was
projected in the 2009 Budget, and increased spending due to the impact of the
global economic downturn. While signs of economic stabilization are emerging,
Ontario is still experiencing the effects of the global recession. Total revenue
in 2009-10 is currently projected to be $90.2 billion, a decrease of $5.8
billion or 6.0 per cent from the 2009 Budget forecast, reflecting the effect of
a weak global economy and its impact on Ontario.
[Chart 1: Evolution of 2009-10 Revenue Outlook: line graph]
Total expense in 2009-10 is currently estimated to be $113.7 billion, 4.4 per
cent higher than the 2009 Budget forecast. Ongoing government measures to
maintain services and lessen the effect of the economic crisis have increased
spending on vital programs within the Ministry of Health and Long-Term Care,
Ministry of Community and Social Services and Ministry of Training, Colleges and
Universities. Higher expenses have also been driven by time-limited support to
the automotive sector, additional spending for social assistance and the
Province's response to the H1N1 flu virus.
- --------------------------------------------------------------------
2009-10 In-Year Fiscal Performance Table 1
($ Millions)
- --------------------------------------------------------------------
Budget Plan Current In-Year
Outlook Change
---------------------------------------
Revenue 95,980 90,180 (5,800)
Expense
Programs 99,579 104,290 4,711
Interest on Debt 9,301 9,406 105
---------------------------------------
Total Expense 108,880 113,696 4,816
Reserve 1,200 1,200 -
---------------------------------------
Surplus/(Deficit) (14,100) (24,716) (10,616)
- --------------------------------------------------------------------
The 2009 Budget plan also included a $1.2 billion reserve to protect against
adverse changes in the Province's revenue and expense outlook, including those
resulting from changes in Ontario's economic performance. The Province continues
to maintain this reserve, as well as significant contingency funds, in
recognition of the continued economic uncertainty that could further impact
Ontario's finances.
2009-10 REVENUE CHANGES SINCE 2009 BUDGET
- --------------------------------------------------------------------------------
The global recession and financial crisis that have severely affected the world
economy over the past year continue to affect Ontario's revenues. The 2009-10
revenue outlook, at $90.2 billion, is $5.8 billion below the 2009 Budget
forecast, largely reflecting a weaker economy in 2009 and new information from
the ongoing processing of 2008 personal and corporate tax returns.
- -----------------------------------------------------------------------------------------------------------------
2009-10 Summary of Revenue Changes Since Budget Table 2
($ Millions)
- -----------------------------------------------------------------------------------------------------------------
Taxation Revenue Changes
Corporations Tax (2,650)
Personal Income Tax (2,435)
Retail Sales Tax (500)
Ontario Health Premium (125)
Employer Health Tax (90)
--------------
Total Revenue Changes Since Budget (5,800)
- -----------------------------------------------------------------------------------------------------------------
DETAILS OF 2009-10 IN-YEAR REVENUE CHANGES
- --------------------------------------------------------------------------------
Key revenue changes from the 2009 Budget forecast include:
o Corporations Tax (CT) revenues are forecast to be $2,650 million, or 31.1
per cent, lower largely due to the impact of the global recession and
financial crisis on corporate income taxes in 2008. Since the 2009 Budget,
processing of 2008 corporate tax returns lowered estimated 2008-09
revenues, which lowers the base upon which projected changes are applied in
forecasting revenues for 2009-10 and beyond. In addition, the most recent
information from tax return processing has further lowered estimated CT
revenues, resulting in a decrease of $1.2 billion as past-year adjustments
are included in the current year. There is a relatively high degree of
uncertainty in forecasting corporate taxes, reflecting both the inherent
volatility of these taxes and information lags with respect to current
corporate performance.
o Personal Income Tax (PIT) revenues are projected to be $2,435 million, or
9.7 per cent, lower due to weaker 2009 wages and salaries and lower
revenues from processing past-year personal income tax returns. Since the
2009 Budget, processing of tax returns has yielded 2008-09 revenues below
Budget estimates, lowering the base upon which projected changes are
applied for 2009-10 and beyond. As well, new information from tax return
processing results in a decrease of $450 million as past-year adjustments
are included in the current year.
o Retail Sales Tax (RST) revenues are expected to be $500 million, or 2.8 per
cent, lower due to the weaker outlook for retail sales in 2009 and a lower
2008-09 retail sales tax revenue base than estimated at the time of the
Budget.
o Ontario Health Premium (OHP) revenues are expected to be $125 million, or
4.4 per cent, lower, reflecting weaker 2009 wages and salaries and a
lower-than-estimated 2008-09 base. As well, new information from tax return
processing results in a one-time decrease of $60 million in 2009-10 as
past-year adjustments are included in the current year.
o Employer Health Tax (EHT) revenues are projected to be $90 million, or 1.9
per cent, lower, reflecting weaker 2009 wages and salaries, and a
lower-than-estimated 2008-09 base upon which the projected changes are
applied for 2009-10 and beyond.
2009-10 EXPENSE CHANGES SINCE 2009 BUDGET
Total expense in 2009-10 is currently projected to be $113.7 billion, a net
increase of $4.8 billion from the 2009 Budget forecast. This change mainly
reflects support to the automotive sector, an increase in the Ministry of Health
and Long-Term Care for the Ontario Health Insurance Program, investments in
skills training in the Ministry of Training, Colleges and Universities, and
additional spending for social assistance due to the increased number of
Ontarians requiring income support from the government. These investments have
helped cushion the effect of the recession on families and communities across
Ontario.
- -----------------------------------------------------------------------------------------------------------------
2009-10 Summary of In-Year Expense Changes Since Budget Table 3
($ Millions)
- -----------------------------------------------------------------------------------------------------------------
Program Expense Changes
Non-Core Program Expense Changes
One-Time Expense
Automotive Sector Support(1) 4,000.0
Ministry of Health and Long-Term Care — Province's response to the H1N1 Flu Virus 650.0
-----------
Total One-Time Expense 4,650.0
Additional Funding Related to the Economic Downturn
Ministry of Training, Colleges and Universities — Labour Market and Training Programs 294.7
Ministry of Community and Social Services — Social Assistance 254.2
Ministry of Education: School Boards — Lower-than-Forecast Education Property Tax 30.0
Revenues
-----------
Total Additional Funding Related to the Economic Downturn 578.9
----------
Total Non-Core Program Expense Changes 5,228.9
Core Program Expense Changes
Ministry of Health and Long-Term Care — OHIP Increase 700.0
Ministry of Training, Colleges and Universities — OSAP and Enrolment Pressures 95.0
All Other Core Program Expense 16.9
-----------
Total Core Program Expense Changes 811.9
Net Changes to Contingency Funds (1,330.0)
---------
Total Program Expense Changes 4,710.9
Interest on Debt 105.0
----------
Total In-Year Expense Changes Since Budget 4,815.9
- -----------------------------------------------------------------------------------------------------------------
(1) As published in the First Quarter Ontario Finances.
Note: Numbers may not add due to rounding.
- -----------------------------------------------------------------------------------------------------------------
DETAILS OF 2009-10 IN-YEAR EXPENSE CHANGES
The majority of changes in Provincial program spending since the 2009 Budget are
related to non-core program expense — mainly time-limited investments being
made to protect and create jobs for Ontarians while also maintaining key public
services. It is essential that the government continue to take action to counter
the effects of the recession.
The following expense changes have occurred since the 2009 Budget:
Non-Core Program Expense Changes
o Ministry of Finance - Automotive Sector Support: An estimated fiscal impact
of $4,000 million, to support the automotive industry, partially offset
from the Operating Contingency Fund.
o Ministry of Health and Long-Term Care — Province's response to the
H1N1 flu virus: A one-time increase of up to $650 million for the purchase
and delivery of the H1N1 vaccine, supplies and equipment for health care
workers, flu centres, testing and communications activities.
o Ministry of Training, Colleges and Universities: An increase of $294.7
million to provide additional support for labour market and training
programs, which are experiencing unprecedented demand due to the economic
downturn.
o Ministry of Community and Social Services: An increase of $254.2 million
for social assistance due to a caseload increase over the previous year,
which is related to 2009 unemployment now projected at 9.3 per cent,
compared to the 8.8 per cent anticipated in the 2009 Budget.
o Ministry of Education - School Boards: An additional $30 million in the
Ministry of Education School Boards' Net Expense reflects an increase in
provincial transfers to school boards to offset lower-than-forecast
education property tax revenues.
Core Program Expense Changes
o Ministry of Health and Long-Term Care: An increase of $700 million to
accommodate higher-than-anticipated costs in the OHIP plan, due to factors
such as increased patient and physician enrolment in primary care models
and reimbursements for services provided outside of Ontario.
o Ministry of Training, Colleges and Universities: An increase of $95 million
due to enrolment growth and Ontario Student Assistance Program (OSAP)
pressures.
o All Other Core Program Expense: A net increase of $16.9 million, mainly as
a result of funding for Legal Aid Ontario.
o The Operating Contingency Fund has decreased by a net $1,330 million since
the 2009 Budget, mainly reflecting offsets for support to the automotive
sector and allocations to fund expense changes in other ministries.
Interest on Debt expense for the year is forecast to increase by $105 million
due to the impact of a higher deficit projected for 2009-10.
Federal-Provincial Infrastructure Investments in the 2009 Budget
- -----------------------------------------------------------------------------------------------------------------
2009-10 Inter-Ministry Transfers Related to Federal-Provincial Infrastructure Investments Table 4
($ Millions)
- -----------------------------------------------------------------------------------------------------------------
Transfer to:
Ministry of Agriculture, Food and Rural Affairs(1) 1,055.8
Ministry of Training, Colleges and Universities 489.2
Ministry of Municipal Affairs and Housing(2) 233.1
Ministry of Health Promotion 192.6
-----------
1,970.8
Transfer from:
Ministry of Energy and Infrastructure (1,970.8)
----------
Net Change in Expense -
- -----------------------------------------------------------------------------------------------------------------
(1) Includes transfer of $14.7 million for Huron Elgin London Clean Water
Project, as published in the First Quarter Ontario Finances.
(2) As published in the First Quarter Ontario Finances. Note: Numbers may not
add due to rounding.
Note: Numbers may not add due to rounding.
- -----------------------------------------------------------------------------------------------------------------
The 2009 Budget outlined new federal-provincial infrastructure investments
totalling $3.2 billion in 2009-10 to preserve and create jobs in Ontario. As
contribution agreements were negotiated with delivery partners, the government
has moved funding from the Ministry of Energy and Infrastructure to various
ministries, as follows:
o Ministry of Agriculture, Food and Rural Affairs: An increase of $1,055.8
million as a result of a transfer from federal-provincial infrastructure
funding under the Ministry of Energy and Infrastructure, to support the
municipal intake of the Infrastructure Stimulus Fund and Intake Two of the
Building Canada Fund - Communities Component. Also includes a transfer for
Huron Elgin London Clean Water Project, as published in the First Quarter
Ontario Finances.
o Ministry of Training, Colleges and Universities: An increase of $489.2
million as a result of a transfer of federal-provincial infrastructure
funding from the Ministry of Energy and Infrastructure to support
postsecondary investments, including 49 college and university projects
under the Knowledge Infrastructure Program.
o Ministry of Municipal Affairs and Housing: An increase of $233.1 million
due to a transfer from the Ministry of Energy and Infrastructure, to
support new affordable housing programs for low-income seniors and persons
with disabilities, and to extend the Canada-Ontario Affordable Housing
Program, as published in the First Quarter Ontario Finances.
o Ministry of Health Promotion: An increase of $192.6 million as a result of
a transfer from federal-provincial infrastructure funding under the
Ministry of Energy and Infrastructure, to support the Ontario Recreation
Program and the Recreational Infrastructure Canada Program in Ontario.
o Ministry of Energy and Infrastructure: A decrease of $1,970.8 million as a
result of infrastructure funding transfers to other ministries, including
the Ministry of Agriculture, Food and Rural Affairs, Ministry of Training,
Colleges and Universities, Ministry of Municipal Affairs and Housing, and
Ministry of Health Promotion.
SECTION B: ONTARIO'S MEDIUM-TERM FISCAL OUTLOOK
MEDIUM-TERM REVENUE OUTLOOK
- --------------------------------------------------------------------------------
The medium-term revenue forecast reflects the Ministry of Finance's economic
outlook and the estimated impact of government policy decisions. (For more
information on Ontario's economic outlook, see Chapter II: Ontario's Economic
Performance and Outlook.)
- -----------------------------------------------------------------------------------------------------------------
Summary of Medium-Term Revenue Outlook Table 5
($ Billions)
- -----------------------------------------------------------------------------------------------------------------
Projected Outlook
Actual --------------------------------------------
Revenue 2008-09 2009-10 2010-11 2011-12
-----------------------------------------------------------
Taxation Revenue 62.4 59.1 64.3 67.4
Government of Canada 16.6 19.2 23.0 20.5
Income from Government Business Enterprises 4.0 4.3 4.5 4.8
Other Non-Tax Revenue 7.5 7.6 7.6 7.4
-----------------------------------------------------------
Total Revenue 90.5 90.2 99.3 100.0
- -----------------------------------------------------------------------------------------------------------------
Note: Numbers may not add due to rounding.
- -----------------------------------------------------------------------------------------------------------------
The medium-term Taxation Revenue outlook reflects the latest revenue information
and current projections on economic performance. The medium-term revenue outlook
also anticipates that corporations will continue to apply some of their 2008
losses against future tax liabilities. Policy measures announced to date,
including those subsequent to the 2009 Budget, are also included in the outlook.
The outlook for Government of Canada transfers, Income from Government Business
Enterprises and Other Non-Tax Revenue is unchanged from the 2009 Budget. The
projection for transfers from the Government of Canada includes $3.0 billion in
2010-11 and $1.3 billion in 2011-12 in support of a move to a more competitive
Ontario economy through the implementation of a Harmonized Sales Tax (HST). For
more information on these projections, see the 2009 Ontario Budget, Chapter II,
Section D, Ontario's Revenue Outlook.
MEDIUM-TERM REVENUE CHANGES SINCE THE 2009 BUDGET
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Summary of Medium-Term Revenue Changes Since Budget Table 6
($ Billions)
- -----------------------------------------------------------------------------------------------------------------
Source of Change 2009-10 2010-11 2011-12
-----------------------------------------
Weaker Economic Outlook (1.8) (1.9) (2.0)
Lower 2008-09 Revenues (2.3) (2.3) (2.3)
Past-Year Tax Return Processing (1.7) 0.0 0.0
Proposed Enhancements to the Ontario Production Services Tax Credit (0.1) (0.1) (0.1)
-----------------------------------------
Total Revenue Changes (5.8) (4.3) (4.4)
- -----------------------------------------------------------------------------------------------------------------
Note: Numbers may not add due to rounding.
- -----------------------------------------------------------------------------------------------------------------
The medium-term forecast for total revenues is lower in each year compared to
the 2009 Budget.
A weaker economic outlook, particularly in 2009, lowers revenues from 2009-10 to
2011-12. The economic outlook is discussed in detail in Chapter II: Ontario's
Economic Performance and Outlook.
Lower 2008-09 revenues than assumed in the 2009 Budget resulted in a lower
revenue base upon which projected changes are applied, lowering the revenue
outlook on an ongoing basis from 2009-10. The ongoing past-year tax return
impact noted above also includes the potential application of 2008 corporate
losses against future tax liabilities.
New tax return processing information results in a one-time revenue decrease in
2009-10 as past year adjustments are included in the current year.
Proposed Enhancements to the Ontario Production Services Tax Credit are
discussed in detail in Chapter V: Creating a More Competitive and Modern Tax
System.
MEDIUM-TERM FISCAL OUTLOOK
- --------------------------------------------------------------------------------
The recession has been deeper than even the most pessimistic economic
forecasters predicted at the time of the 2009 Budget. Ontario has met these
economic and fiscal challenges head-on, but uncertainties remain. The
medium-term outlook now reflects further deterioration in Ontario revenue as a
result of the deep global recession, as well as the impact on expenditures of
policy measures taken by the government to help lessen the burden on Ontario's
families and businesses.
- -----------------------------------------------------------------------------------------------------------------
Medium-Term Fiscal Projections Table 7
($ Billions)
- -----------------------------------------------------------------------------------------------------------------
Projected Outlook
Actual --------------------------------------------
2008-09 2009-10 2010-11 2011-12
-----------------------------------------------------------
Revenue 90.5 90.2 99.3 100.0
Expense
Programs 88.3 104.3 108.6 106.3
Interest on Debt 8.6 9.4 10.6 11.9
-----------------------------------------------------------
Total Expense 96.9 113.7 119.2 118.2
Reserve - 1.2 1.2 1.2
-----------------------------------------------------------
Surplus/(Deficit) (6.4) (24.7) (21.1) (19.4)
- -----------------------------------------------------------------------------------------------------------------
Note: Numbers may not add due to rounding.
- -----------------------------------------------------------------------------------------------------------------
The government is projecting deficits of $24.7 billion in 2009-10, $21.1 billion
in 2010-11 and $19.4 billion in 2011-12. Revenue projections are lower than the
2009 Budget levels as a result of downward revisions to Ontario's economic
forecast and new information from the ongoing processing of past-year tax
returns.
In response to the deeper economic downturn, the government has taken the
necessary step of running larger deficits in the near term to deliver targeted
and timely stimulus to shelter Ontario families from the worst of the economic
storm. As a result, total expense over the medium term is projected to increase
from $113.7 billion in 2009-10 to $118.2 billion in 2011-12. Investments in
skills training, increased expenditures for social assistance, in addition to
higher interest on debt expense, have led to increased spending since the 2009
Budget.
Over the medium term, total provincial revenues are projected to increase from
$90.2 billion in 2009-10 to $100.0 billion in 2011-12. As economic conditions
improve and the government implements its expenditure management plan, deficits
are projected to decline.
As a result of the ongoing fragility that remains in the global economic
environment — a vulnerable situation for Ontario with its open
economy — the government's medium-term projections will continue to include a
reserve of $1.2 billion each year. This is meant to protect the fiscal outlook
against further adverse changes in the Province's revenue and expense, including
those resulting from changes in Ontario's economic performance.
Since the 2009 Budget, the fiscal projections for all G7 economies have
deteriorated, resulting in higher deficit-to-GDP ratios across the board.
Despite revisions to Ontario's projections, the deficit in 2009-10 relative to
the size of the economy, at 4.4 per cent, is still low compared with other
industrialized jurisdictions impacted by the global economic crisis.
[Chart 2: Jurisdictional Comparison: 2009-10 Deficit-to-GDP: bar graph]
[Chart 3:Program Expense per Capita: bar graph]
Furthermore, Ontario has the second-lowest 2009-10 expense per capita among all
Canadian jurisdictions. This means Ontario is cost-efficient in delivering
programs to the public. As the Province stood on the brink of recession, Ontario
was in a strong fiscal position and was well prepared to provide much-needed
stimulus, maintain key public services and position the Province to be
competitive in future years through proposed tax cuts and the HST.
As the economy improves and the Province moves forward from the global economic
crisis, the government remains committed to returning to balanced budgets. The
government has already made significant headway in modernizing its operations
and managing expenditure growth, and it is committed to doing much more.
ONTARIO'S EXPENDITURE MANAGEMENT PLAN
The government has already taken numerous steps to ensure Ontarians receive
value-for-money and it is committed to implementing an even more aggressive
expenditure management process to look at ways of improving further the delivery
of key services for Ontarians in the future.
Ontario is not alone in its efforts to implement effective expenditure
management practices. The new economic reality and inevitable demographic
pressures associated with an aging population are forcing governments around the
world to re-examine their expenditures and implement new approaches to manage
spending.
In addition to its existing responsibilities for approving the Province's annual
expenditure plans, the Treasury Board/Management Board of Cabinet will conduct a
rigorous strategic spending review focused on high-impact areas to ensure
continued relevance and effectiveness of government programs and services and
the way they are funded. This review will be guided by a policy framework that
reflects the government's values of fairness, targeting those who need it most,
investing for the future, and value-for-money. The Board will make
recommendations and provide continued support as these are considered and
implemented by the government. The Board's recommendations will be announced as
a plan-of-action in the 2010 Budget.
As part of the government's other expenditure management initiatives, the
government will work with its broader public-sector partners and will also
review all agencies, boards and commissions to make sure that their programs are
designed to meet the priorities of Ontarians and yield measurable results in an
efficient and effective way.
These initiatives will balance the government's commitment to sustain Ontario's
public services while securing a strong and sustainable fiscal footing for
Ontario.
SECTION C: DETAILS OF ONTARIO'S FINANCES
This section provides details on the Province's current fiscal outlook,
historical financial performance, and key fiscal indicators.
- -----------------------------------------------------------------------------------------------------------------
Medium-Term Fiscal Plan and Outlook Table 8
($ Billions)
- -----------------------------------------------------------------------------------------------------------------
Projected Outlook
Actual ---------------------------------------------
2008-09 2009-10 2010-11 2011-12
------------------------------------------------------------
Revenue 90.5 90.2 99.3 100.0
Expense
Programs 88.3 104.3 108.6 106.3
Interest on Debt(1) 8.6 9.4 10.6 11.9
------------------------------------------------------------
Total Expense 96.9 113.7 119.2 118.2
Reserve - 1.2 1.2 1.2
------------------------------------------------------------
Surplus/(Deficit) (6.4) (24.7) (21.1) (19.4)
- -----------------------------------------------------------------------------------------------------------------
Net Debt(2) 153.3 184.1 212.7 238.4
Accumulated Deficit(2) 113.2 138.0 159.1 178.5
- -----------------------------------------------------------------------------------------------------------------
(1) Interest on debt expense is net of interest capitalized during construction
of tangible capital assets of $0.1 billion in 2009-10, $0.3 billion in
2010-11, and $0.5 billion in 2011-12.
(2) Net Debt is calculated as the difference between liabilities and financial
assets. The annual change in Net Debt is equal to the surplus/deficit of
the Province plus the change in tangible capital assets; the change in net
assets of hospitals, school boards and colleges; and the change in the fair
value of the Ontario Nuclear Funds. Accumulated Deficit is calculated as
the difference between liabilities and total assets, including tangible
capital assets and net assets of hospitals, school boards and colleges. The
annual change in the Accumulated Deficit is equal to the surplus/deficit
plus the change in the fair value of the Ontario Nuclear Funds.
Note: Numbers may not add due to rounding.
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Revenue Table 9
($ Millions)
- -----------------------------------------------------------------------------------------------------------------
Current
Actual Outlook
2005-06 2006-07 2007-08 2008-09 2009-10
-----------------------------------------------------------
Taxation Revenue
Personal Income Tax 21,041 23,655 24,538 24,727 22,735
Retail Sales Tax 15,554 16,228 16,976 17,267 17,100
Corporations Tax 9,984 10,845 12,990 6,748 5,868
Employer Health Tax 4,197 4,371 4,605 4,617 4,597
Ontario Health Premium 2,350 2,589 2,713 2,776 2,704
Gasoline Tax 2,281 2,310 2,360 2,323 2,367
Land Transfer Tax 1,159 1,197 1,363 1,013 895
Tobacco Tax 1,379 1,236 1,127 1,044 995
Fuel Tax 729 723 733 698 732
Electricity Payments-In-Lieu of Taxes 951 757 546 830 685
Other Taxes 292 399 481 352 378
-----------------------------------------------------------
59,917 64,310 68,432 62,395 59,056
Government of Canada
Canada Health Transfer 7,148 7,702 8,487 8,942 9,722
Canada Social Transfer 3,324 3,478 3,778 4,079 4,213
Equalization - - - - 347
Infrastructure Programs 285 191 207 151 1,746
Labour Market Programs 127 289 664 797 1,193
Social Housing 520 532 525 520 509
Wait Times Reduction Fund 243 467 468 235 97
Other Federal Payments 1,604 1,377 2,468 1,867 1,419
-----------------------------------------------------------
13,251 14,036 16,597 16,591 19,246
Income from Investment in Government
Business Enterprises
Ontario Lottery and Gaming Corporation 2,027 1,945 1,857 1,921 1,966
Liquor Control Board of Ontario 1,197 1,307 1,374 1,410 1,326
Ontario Power Generation Inc. and Hydro One Inc. 1,107 947 1,214 713 983
Other Government Enterprises (23) (3) (8) (2) (8)
-----------------------------------------------------------
4,308 4,196 4,437 4,042 4,267
Other Non-Tax Revenue
Reimbursements 1,295 1,415 1,464 1,379 1,297
Vehicle and Driver Registration Fees 763 970 1,051 1,034 1,065
Electricity Debt Retirement Charge 1,021 991 982 970 955
Power Sales 779 863 929 953 964
Sales and Rentals 465 1,108 553 733 619
Other Fees and Licences 550 624 668 674 815
Liquor Licence Revenue 516 467 475 468 457
Net Reduction of Power Purchase Contract Liability 396 412 398 373 348
Royalties 191 215 193 205 211
Miscellaneous Other Non-Tax Revenue 773 790 943 655 880
-----------------------------------------------------------
6,749 7,855 7,656 7,444 7,611
-----------------------------------------------------------
Total Revenue 84,225 90,397 97,122 90,472 90,180
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Total Expense Table 10
($ Millions)
- -----------------------------------------------------------------------------------------------------------------
Ministry Expense Current
Actual Outlook
2005-06 2006-07 2007-08 2008-09 2009-10
-------------------------------------------------------------
Aboriginal Affairs(1) 50 25 33 55 71.1
Agriculture, Food and Rural Affairs(1) 861 796 731 877 1,116.1
Attorney General 1,282 1,343 1,648 1,662 1,665.8
Board of Internal Economy 150 163 257 188 173.3
Children and Youth Services 3,284 3,277 3,733 4,056 4,406.5
Citizenship and Immigration 89 112 90 89 106.7
Community and Social Services 6,714 7,178 7,544 7,998 8,581.5
Community Safety and Correctional Services 1,728 1,856 1,982 2,142 2,260.0
Consumer Services(2)(,3) 39 39 46 45 48.8
Culture(1) 478 414 350 381 476.7
Economic Development and Trade(1,2) 176 199 297 218 398.9
Education(1) 440 423 446 443 492.9
School Boards' Net Expense 10,886 11,290 11,830 12,722 13,723.5
Energy and Infrastructure(1) 325 525 401 263 764.7
Environment(1) 274 314 349 365 367.2
Executive Offices 31 37 36 35 36.6
Finance(1) 578 564 455 750 670.6
Francophone Affairs, Office of 4 4 5 5 5.3
Government Services(1) 749 978 950 953 1,311.4
Health and Long-Term Care(1) 17,797 19,119 20,373 21,780 23,576.2
Hospitals' Net Expense 14,816 16,145 17,381 18,585 19,293.6
Health Promotion(1) 290 391 364 382 398.9
Labour 141 146 170 177 174.1
Municipal Affairs and Housing(1) 926 843 744 756 703.9
Natural Resources(2) 626 731 794 780 788.2
Northern Development, Mines and 332 314 341 491 378.4
Forestry(2)(,4)(,)(5)
Research and Innovation(1) 332 316 301 295 482.7
Revenue 442 563 554 557 820.2
Tourism 210 204 234 185 216.4
Training, Colleges and Universities(1) 3,509 4,115 4,384 4,581 5,126.4
Colleges' Net Expense(1) 1,185 1,273 1,403 1,495 1,549.5
Transportation(1) 1,795 1,787 1,892 2,044 2,112.6
Interest on Debt(6) 9,019 8,831 8,914 8,566 9,406.0
Other Expense(1) 4,369 3,813 7,490 2,960 13,141.1
Year-End Savings(7) - - - - (1,150)
-------------------------------------------------------------
Total Expense 83,927 88,128 96,522 96,881 113,695.9
- -----------------------------------------------------------------------------------------------------------------
(1) Details on other ministry expense can be found in Table 11, Other Expense.
(2) Future updates will reflect the impacts of previously announced ministry
restructuring details.
(3) Expense presented is that of the former Ministry of Small Business and
Consumer Services.
(4) Expense presented is that of the former Ministry of Northern Development
and Mines.
(5) 2008-09 amount reflects an accounting adjustment of $112.1 million
resulting from the reclassification of the Ontario Northland Transportation
Commission from a Government Business Enterprise to a Government
Organization.
(6) Interest on debt is net of interest capitalized during construction of
tangible capital assets of $78 million in 2009-10.
(7) As in past years, the Year-End Savings provision reflects anticipated
underspending that has historically arisen at year-end due to factors such
as program efficiencies, and changes in project startups and implementation
plans.
Note: Numbers may not add due to rounding.
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Other Expense Table 11
($ Millions)
- -----------------------------------------------------------------------------------------------------------------
Ministry Expense Current
Actual Outlook
2005-06 2006-07 2007-08 2008-09 2009-10
-----------------------------------------------------------
Aboriginal Affairs
One-Time Expense for the First Nations Gaming - - 201 - -
Agreement
Agriculture, Food and Rural Affairs
One-Time Extraordinary Assistance 125 259 274 - -
Time-Limited Investments in Infrastructure - - - - 1,055.8
Time-Limited Assistance 157 19 76 13 164.0
Culture
One-Time Investments - - 57 - -
Economic Development and Trade
One-Time Investments - - 152 - -
Education
Teachers' Pension Plan(1) 295 345 342 50 259.0
Energy and Infrastructure
Capital Contingency Fund - - - - 200.0
One-Time Investments in Municipal Infrastructure - 140 450 - -
Time-Limited Investments in Infrastructure - - - - 676.5
Environment
One-Time Investments - - - 68 -
Finance
One-Time Automotive Sector Support - - - - 4,000.0
Investing in Ontario Act Investments - - 1,149 - -
Ontario Municipal Partnership Fund 714 758 907 905 782.9
Operating Contingency Fund - - - - 1,880.0
Power Purchases 803 863 929 953 964.1
Government Services
Pension and Other Employee Future Benefits 729 557 531 971 932.0
Health and Long-Term Care
H1N1 Response One-Time Expense - - - - 650.0
Health Promotion
Time-Limited Investments in Infrastructure - - - - 192.6
Municipal Affairs and Housing
Time-Limited Investments in Municipal Social and - - 100 - 585.3
Affordable Housing Stock
Research and Innovation
One-Time Investments - - 87 - 20.0
Training, Colleges and Universities
Time-Limited Investments - Training, Colleges and - - 699 - 695.2
Universities
Time-Limited Investments - Colleges' Net Expense - - - - 83.7
Transportation
One-Time Transit and Infrastructure Investments 1,546 872 1,536 - -
-----------------------------------------------------------
Total Other Expense 4,369 3,813 7,490 2,960 13,141.1
- -----------------------------------------------------------------------------------------------------------------
(1) Numbers reflect PSAB pension expense. Ontario's matching contributions to
the plan grow from $740 million in 2005-06 to $1,070 million in 2008-09 and
$1,249 million in 2009-10.
Note: Numbers may not add due to rounding.
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Infrastructure Expenditures Table 12
($ Millions)
- -----------------------------------------------------------------------------------------------------------------
2009-10 Current Outlook
-------------------------------------------------------------------------------------
Total Transfers
Infrastructure and Other Total
Expenditures Investment Expenditures on Infrastructure
Sector 2008-09 Actual in Capital Assets Infrastructure(1) Expenditures
------------------------------------------------------------------------------------
Transportation
Transit 1,073.1 1,316.0 371.1 1,687.1
Highway Construction 1,444.4 1,718.3 0.0 1,718.3
Windsor Gateway 144.9 186.9 60.2 247.1
Other Transportation(2) 350.0 524.5 51.5 576.0
Health
Hospitals 2,264.3 2,542.8 0.0 2,542.8
Other Health 260.4 468.2 166.4 634.6
Education
School Boards 1,372.9 1,473.6 30.0 1,503.6
Colleges 267.4 239.9 0.0 239.9
Universities 49.9 0.0 105.6 105.6
Water/Environment 288.0 37.1 236.6 273.8
Municipal and Local 279.2 19.5 459.0 478.5
Infrastructure(3)
Justice 383.3 318.6 37.1 355.6
Other 812.9 1,066.1 736.1 1,802.3
New Short-Term Stimulus 0.0 702.0 2,728.6 3,430.6
Investments(4)
-------------------------------------------------------------------------------------
Total 8,990.6 10,613.5 4,982.2 15,595.7
Less: Other Partner 531.2 501.0 0.0 501.0
Funding(5)
-------------------------------------------------------------------------------------
Total Excluding Partner 8,459.4 10,112.5 4,982.2 15,094.7
Funding
Less: Flow-Throughs(6) 221.1 613.3 1,776.7 2,390.0
-------------------------------------------------------------------------------------
Total Provincial 8,238.3 9,499.2 3,205.5 12,704.7
Expenditure(7)
- -----------------------------------------------------------------------------------------------------------------
(1) Mainly consists of transfers for capital purposes to municipalities and
universities, and expenditures for capital repairs. These expenditures are
included in the Province's total expense in Table 10.
(2) Other transportation includes planning activities, property acquisition,
and other infrastructure programs (e.g., municipal/local roads/ remote
airports).
(3) Municipal and local water and wastewater infrastructure investments are
included in the Water/Environment sector.
(4) New Short-Term Stimulus Investments include the federal-provincial stimulus
projects referenced in Chapter I.
(5) Third-party contributions to capital investment in the consolidated sectors
(schools, colleges and hospitals).
(6) Mostly federal government transfers for capital investments.
(7) Total provincial expenditure includes acquisitions of tangible capital
assets by the Province and consolidated sectors (schools, colleges and
hospitals). The Province's total expense includes amortization on tangible
capital assets, rather than acquisitions.
Note: Numbers may not add due to rounding.
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Ten-Year Review of Selected Financial and Economic Statistics
($ Millions)
- -----------------------------------------------------------------------------------------------------------------
2000-01 2001-02 2002-03(1)
-----------------------------------------------
Financial Transactions
Revenue 66,294 66,534 68,891
Expense
Programs 53,519 55,822 59,080
Interest on Debt 10,873 10,337 9,694
-----------------------------------------------
Total Expense 64,392 66,159 68,774
Reserve - - -
-----------------------------------------------
Surplus/(Deficit) 1,902 375 117
- -----------------------------------------------------------------------------------------------------------------
Net Debt(3,4) 132,496 132,121 132,647
Accumulated Deficit(5) 132,496 132,121 118,705
- -----------------------------------------------------------------------------------------------------------------
Gross Domestic Product (GDP) at Market Prices 440,759 453,701 477,763
Personal Income 347,653 361,187 369,420
- -----------------------------------------------------------------------------------------------------------------
Population — July (000s) 11,683 11,897 12,091
Net Debt per Capita (dollars) 11,341 11,106 10,971
Personal Income per Capita (dollars) 29,756 30,360 30,553
- -----------------------------------------------------------------------------------------------------------------
Total Expense as a per cent of GDP 14.6 14.6 14.4
Interest on Debt as a per cent of Revenue 16.4 15.5 14.1
Net Debt as a per cent of GDP 30.1 29.1 27.8
Accumulated Deficit as a per cent of GDP 30.1 29.1 24.8
- -----------------------------------------------------------------------------------------------------------------
(1) Starting in 2002-03, investments in major tangible capital assets owned by
the Province (land, buildings, and transportation infrastructure) have been
capitalized and amortized to expense over their useful lives. Starting in
2009-10, investments in minor tangible capital assets owned by the Province
(information technology infrastructure and systems, vehicles and marine
fleet and aircraft) will also be capitalized and amortized to expense. All
capital assets owned by consolidated organizations are being accounted for
in a similar manner.
(2) Starting in 2005-06, the Province's financial reporting was expanded to
include hospitals, school boards and colleges using one-line consolidation.
Total expense prior to 2005-06 has not been restated to reflect expanded
reporting.
(3) Net Debt is calculated as the difference between liabilities and financial
assets. The annual change in Net Debt is equal to the surplus/deficit of
the Province plus the change in tangible capital assets; the change in net
assets of hospitals, school boards and colleges; and, effective April 1,
2007, the change in the fair value of the Ontario Nuclear Funds.
(4) Net Debt is restated in 2003-04, 2004-05 and 2005-06 to reflect the value
of hydro corridor lands transferred to the Province from Hydro One Inc.
(5) Accumulated Deficit is calculated as the difference between liabilities and
total assets, including tangible capital assets and net assets of
hospitals, school boards and colleges. The annual change in the Accumulated
Deficit is equal to the surplus/deficit plus, effective April 1, 2007, the
change in the fair value of the Ontario Nuclear Funds. For fiscal 2005-06,
the change in the Accumulated Deficit includes the opening combined net
assets of hospitals, school boards and colleges that were recognized upon
consolidation of these Broader Public Sector entities. For fiscal 2006-07,
the change in the Accumulated Deficit includes an adjustment to the
unfunded liability of the Ontario Electricity Financial Corporation made at
the beginning of the year. For fiscal 2007-08, a $1.2 billion decrease in
the Accumulated Deficit is made up of $0.6 billion in the Province's
operating surplus, with the remainder resulting from a change in accounting
policy. Under this change, Ontario Nuclear Funds Agreement funds are
reported at fair value on Ontario Power Generation Inc. books and, upon
consolidation, on the Province's consolidated financial statements.
Sources: Ontario Ministry of Finance and Statistics Canada.
- -----------------------------------------------------------------------------------------------------------------
[Chart 4: Composition of Revenue, 2009-10: pie chart]
- -----------------------------------------------------------------------------------------------------------------
Table 13
- -----------------------------------------------------------------------------------------------------------------
Current
Actual Outlook
2003-04 2004-05 2005-06(2) 2006-07 2007-08 2008-09 2009-10(1)
- -----------------------------------------------------------------------------------------------------------------
68,400 77,841 84,225 90,397 97,122 90,472 90,180
64,279 70,028 74,908 79,297 87,608 88,315 104,290
9,604 9,368 9,019 8,831 8,914 8,566 9,406
- -----------------------------------------------------------------------------------------------------------------
73,883 79,396 83,927 88,128 96,522 96,881 113,696
- - - - - - 1,200
- -----------------------------------------------------------------------------------------------------------------
(5,483) (1,555) 298 2,269 600 (6,409) (24,716)
- -----------------------------------------------------------------------------------------------------------------
138,816 140,921 141,928 141,100 142,418 153,325 184,110
124,188 125,743 109,155 106,776 105,617 113,238 137,954
- -----------------------------------------------------------------------------------------------------------------
493,081 516,106 537,232 559,293 584,664 587,796 565,377
381,127 400,994 419,325 442,166 464,217 482,008 478,731
- -----------------------------------------------------------------------------------------------------------------
12,242 12,391 12,528 12,665 12,795 12,936 13,069
11,339 11,373 11,329 11,141 11,131 11,853 14,088
31,132 32,363 33,471 34,912 36,281 37,261 36,631
- -----------------------------------------------------------------------------------------------------------------
15.0 15.4 15.6 15.8 16.5 16.5 20.1
14.0 12.0 10.7 9.8 9.2 9.5 10.4
28.2 27.3 26.4 25.2 24.4 26.1 32.6
25.2 24.4 20.3 19.1 18.1 19.3 24.4
- -----------------------------------------------------------------------------------------------------------------
[Chart 5: Composition of Total Expense, 2009-10: pie chart]
[Chart 6: Composition of Program Expense, 2009-10: pie chart]
CHAPTER IV
------------------------------
Borrowing and Debt Management
LONG-TERM PUBLIC BORROWING
- --------------------------------------------------------------------------------
As an agency of the Ministry of Finance, the Ontario Financing Authority (OFA)
manages the borrowing, debt, investment and cash management activities of the
Province and Ontario Electricity Financial Corporation (OEFC) in a
cost-effective manner.
[Chart 2: Borrowing — Domestic Market: pie chart]
[Chart 3: Borrowing — All Markets: pie chart]
The forecast long-term public borrowing requirement for 2009-10 is $42.6
billion.
Global financial markets continue to face daunting challenges. The Province is
not immune to these conditions. However, the OFA has been able to maintain the
pace of its borrowing program.
As at October 7, 2009, $24.0 billion, or 56 per cent, of the long-term borrowing
requirement was completed. This figure includes Ontario Savings Bond sales of
$1.1 billion.
Despite difficult financial market conditions, the Province maintained a
flexible approach to borrowing, monitoring both domestic and international
capital markets for cost-effective borrowing opportunities.
Depending on market conditions, the Province plans to borrow 35 to 50 per cent
from international markets. This range was announced in the 2009 Budget, and is
higher than in previous years due to the size of the borrowing program and the
capacity of domestic capital markets. About $11.5 billion, or 48 per cent, of
borrowing has been raised from international markets so far in 2009-10, compared
to 34 per cent for the entire 2008-09 fiscal year. Bonds issued in foreign
currencies were:
o three Global bond issues in U.S. dollars
o Euro Medium-Term Notes (EMTNs) in euros, Swiss francs and Hong Kong
dollars.
About $12.5 billion, or 52 per cent, of borrowing was completed in the domestic
market through a number of instruments, including:
o syndicated issues
o floating rate notes
o Ontario Savings Bonds
o real return bonds.
- ---------------------------------------------------------------------------------------------------------------
2009-10 Borrowing Program: Province and OEFC Table 1
($ Billions)
- ---------------------------------------------------------------------------------------------------------------
Budget Current In-Year
Plan Outlook Change
--------------------------------------------
Deficit/(Surplus) 14.1 24.7 10.6
Non-Cash Adjustments (2.0) 0.5 2.5
Investment in Capital Assets 9.5 9.5 0.0
Net Loans/Investments 1.9 1.6 (0.3)
Debt Maturities 14.6 14.7 0.1
Debt Redemptions 0.4 0.4 0.0
--------------------------------------------
Total Funding Requirement 38.5 51.5 13.0
Canada Pension Plan Borrowing (0.7) (1.1) (0.4)
Decrease/(Increase) in Short-Term Borrowing (3.0) (7.8) (4.7)
Increase/(Decrease) in Cash and Cash Equivalents 0.0 0.0 0.0
- ---------------------------------------------------------------------------------------------------------------
Total Long-Term Public Borrowing Requirement 34.8 42.6 7.8
- ---------------------------------------------------------------------------------------------------------------
Note: Numbers may not add due to rounding.
- ---------------------------------------------------------------------------------------------------------------
DEFICIT AND BORROWING
Like other jurisdictions, Ontario is projecting a larger-than-expected deficit
this year. The Province of Alberta, for example, is facing growing deficits for
the first time in 15 years. Ontario's deficit is roughly proportional to
Canada's and significantly less than that of the United States, based on the
sizes of the respective economies and populations.
Ontario's increased deficit will be funded through an increase in both short-
and long-term public borrowing. The total long-term public borrowing requirement
of $42.6 billion is $7.8 billion higher than the 2009 Budget Plan, and $3.4
billion higher than reported in the First Quarter Ontario Finances. Short-term
borrowing will increase by $4.7 billion over the 2009 Budget Plan, but will
remain less than nine per cent of the Province's total debt.
The government will seek approval from the legislature for additional borrowing
authority to meet the Province's increased funding requirements.
OTHER CHANGES IN FINANCING
- ---------------------------------------------------------------------------------------------------------------
Medium-Term Borrowing Outlook: Province and OEFC Table 2
($ Billions)
- ---------------------------------------------------------------------------------------------------------------
2009-10 2010-11 2011-12
--------------------------------------------
Deficit/(Surplus) 24.7 21.1 19.4
Non-Cash Adjustments 0.5 (2.5) (3.0)
Investment in Capital Assets 9.5 11.4 10.4
Net Loans/Investments 1.6 0.3 0.4
Debt Maturities 14.7 15.6 15.6
Debt Redemptions 0.4 0.4 0.4
--------------------------------------------
Total Funding Requirement 51.5 46.3 43.1
Canada Pension Plan Borrowing (1.1) (0.8) (1.1)
Decrease/(Increase) in Short-Term Borrowing (7.8) (3.8) (1.9)
Increase/(Decrease) in Cash and Cash Equivalents 0.0 (2.0) (1.0)
- ---------------------------------------------------------------------------------------------------------------
Total Long-Term Public Borrowing Requirement 42.6 39.7 39.1
- ---------------------------------------------------------------------------------------------------------------
Note: Numbers may not add due to rounding.
- ---------------------------------------------------------------------------------------------------------------
DEBT
Total debt, which represents all borrowing without offsetting financial assets,
is projected to be $213.2 billion as at March 31, 2010, compared to $176.9
billion as at March 31, 2009.
[Chart 3: Debt: bar graph]
Ontario's net debt, the difference between total liabilities and total financial
assets, is projected to be $184.1 billion as at March 31, 2010, compared to
$153.3 billion as at March 31, 2009.
Accumulated deficit is the difference between total liabilities and total
assets. It represents the total of all past annual deficits minus all past
annual surpluses, including prior-period adjustments. Accumulated deficit is
projected to be $138.0 billion as at March 31, 2010, compared to $113.2 billion
as at March 31, 2009.
DEBT-TO-GDP RATIOS
In 2008-09, the most recent year for which data are available for all
jurisdictions, Ontario's net debt-to-GDP level was near the median for the
provinces and Canada.
In 2008-09, Canada's and Ontario's net debt-to-GDP ratios were below those of G7
countries.
[Chart 4: Net Debt-to-GDP, Provincial Comparison: bar graph]
[Chart 5: Net Debt-to-GDP, G7 Countries and Ontario: bar graph]
TOTAL DEBT COMPOSITION
Total debt is composed of bonds issued in both the short- and long-term public
capital markets and non-public debt.
[Chart 6: Total Debt Composition: pie chart]
Public debt totals $175.3 billion, primarily consisting of bonds issued in the
domestic and international long-term public markets in 10 currencies. Ontario
also has $18.0 billion outstanding in non-public debt issued in Canadian
dollars. Non-public debt consists of debt instruments issued to public-sector
pension funds in Ontario and the Canada Pension Plan Investment Board (CPPIB).
This debt is not marketable and cannot be traded.
COST OF DEBT
The effective interest rate (on a weighted-average basis) on total debt was 4.85
per cent as at September 30, 2009 (March 31, 2009, 5.17 per cent). For
comparison, as at March 31, 1993, the effective interest rate on total debt was
10.14 per cent.
[Chart 7: Effective Interest Rate (Weighted Average) on Total Debt: line graph]
RISK EXPOSURE
The Province limits itself to a maximum net interest rate resetting exposure of
35 per cent of debt issued for Provincial purposes and a maximum foreign
exchange exposure of five per cent of debt issued for Provincial purposes. As at
September 30, 2009, the net interest rate resetting exposure was 13.1 per cent
and foreign exchange exposure was 0.2 per cent.
[Chart 8: Net Interest Rate Resetting Exposure: bar graph]
[Chart 9: Foreign Exchange Exposure: bar graph]
All exposures have remained well below policy limits in 2009-10.
CHAPTER V
-------------------------------------------------
Creating a More Competitive and Modern Tax System
TAX CUTS FOR A STRONGER ONTARIO
- --------------------------------------------------------------------------------
In the 2009 Budget, the McGuinty government proposed a comprehensive tax package
to position Ontario's economy for long-term competitiveness in a global
marketplace, so that families and businesses can take advantage of the next
generation of jobs and economic growth.
This paper provides additional details on the proposed changes to create a more
competitive and modern tax system. A strong, competitive Ontario that thrives in
the new economy will better support high-quality public services and greater
prosperity.
HARMONIZED SALES TAX
To further strengthen Ontario's economic growth and tax competitiveness, the
2009 Budget proposed that, effective July 1, 2010, the Retail Sales Tax (RST)
would be replaced with a value-added tax and combined with the federal Goods and
Services Tax (GST) to create a federally administered Harmonized Sales Tax
(HST). The HST would have a combined rate of 13 per cent. The provincial portion
would be eight per cent — the same as the general RST rate — and the federal
portion would be five per cent.
Ontario's announcement was followed by British Columbia, which would join three
of the Atlantic provinces (New Brunswick, Nova Scotia and Newfoundland and
Labrador) and Quebec, all of which have had value-added taxes since the 1990s.
- --------------------------------------------------------------------------------
"This is the single biggest thing we can do to improve BC's economy. This is an
essential step to make our businesses more competitive, encourage billions of
dollars in new investment, lower costs on productivity and reduce administrative
costs to BC taxpayers and businesses. Most importantly, this will create jobs
and generate long-term economic growth that will in turn generate more revenue
to sustain and improve crucial public services."
The Honourable Gordon Campbell, Premier, British Columbia, July 23, 2009
"We had to move fast if we were not to be left at a competitive disadvantage to
Ontario."
The Honourable Colin Hansen, Minister of Finance, British Columbia, August 20,
2009
- --------------------------------------------------------------------------------
More than 130 countries have already adopted a value-added tax, which is
generally viewed as being more efficient than an RST.
The RST is charged on many of the purchases made by businesses in the course of
producing goods and services. As illustrated in Chart 1, this tax works its way
into each stage of the production, distribution and retail process as it is
passed on from suppliers to business customers and eventually to consumers. The
result is a tax that becomes embedded and hidden in the price of purchases made,
raising the cost of operating a business in Ontario. This cascading pattern
leads to higher prices for Ontario consumers and makes Ontario exports less
competitive, which discourages investment in the province. The proposed HST
would remove this hidden tax by refunding sales taxes paid on most business
inputs, resulting in a cost saving for business.
- --------------------------------------------------------------------------------
"...the bottom line is that sales tax harmonization will strengthen Ontario's
competitiveness, attract new investment and improve job opportunities for
workers throughout the province."
Thomas d'Aquino, former Chief Executive and President, Canadian Council of Chief
Executives, September 23, 2009
- --------------------------------------------------------------------------------
[Chart 1: An RST vs. a Value-Added Tax — Illustrative Example]
A study that examined the impact of sales tax harmonization in the Atlantic
provinces found that cost savings to business were passed through to
consumers.(1) A recent TD Bank report predicts that, in Ontario, competitive
pressures would lead businesses to pass through 80 per cent of their savings to
consumers in the first year and 95 per cent by the third year.(2) The report
notes that "(i)n order for businesses to generate an increase in demand for
their products they will have to pass those savings onto consumers."(3)
- ---------------------------
(1) Michael Smart, "Lessons in Harmony: What Experience in the Atlantic
Provinces Shows About the Benefits of a Harmonized Sales Tax," C.D. Howe
Institute Commentary, July 2007.
(2) "The Impact of Sales Tax Harmonization in Ontario and B.C. on Canadian
Inflation," TD Economics Special Report, September 18, 2009.
(3) Ibid.
TAX CUTS FOR PEOPLE
Personal Income Tax Cuts
The 2009 Budget proposed $10.6 billion in tax relief to Ontarians over three
years to provide personal income tax (PIT) cuts, enhance the sales tax and
property tax credits and help consumers adjust to the HST.
The government is proposing to cut the tax rate on the first $36,848 of taxable
income (adjusted for inflation) by one percentage point, from 6.05 per cent to
5.05 per cent, effective for the 2010 taxation year. In addition, the Ontario
dividend tax credit rates would be adjusted to reflect the proposed Corporate
Income Tax (CIT) rate reductions. The proposed PIT changes would benefit about
4.3 million individuals and families in Ontario, providing more than $1.1
billion annually in broadly based PIT cuts. About 93 per cent of Ontario
taxpayers would pay less income tax, and approximately 90,000 lower-income
taxpayers would no longer pay Ontario PIT.
Sales Tax and Property Tax Credits
The government is proposing to introduce two new, separate and enhanced tax
credits — the Ontario Sales Tax Credit and the Ontario Property Tax Credit
— to replace the existing combined property and sales tax credits. The new
credits would continue to be refundable but would better target sales and
property tax relief to low- to middle-income tax filers. An additional $1
billion in property and sales tax relief would be provided to Ontarians through
the new credits.
- --------------------------------------------------------------------------------
"Coming into this budget we had serious concerns that tax harmonization would
mean low-income families paying more for their basic needs such as children's
shoes and meals. The Sales Tax Credit is a sensible, forward-looking way to deal
with that, and could become an important long-term piece of the economic
security puzzle for poor people in the future. We applaud the government's
plan."
Michael Oliphant, Director of Research and Communications, Daily Bread Food
Bank, March 26, 2009
- --------------------------------------------------------------------------------
Ontario Sales Tax Credit
Currently, Ontarians have to wait until they file a tax return to receive sales
tax relief for the previous year. To provide more timely assistance, the new
Ontario Sales Tax Credit would be paid quarterly, starting in August 2010, to
individuals who are 19 years of age or over or who have a spouse or a common-law
partner or live with their child.
The credit would provide about 2.9 million low- to middle-income families and
individuals with annual assistance of up to $260 for each adult and each child.
It would be reduced by four per cent of the previous year's adjusted family net
income over $20,000 for single people and over $25,000 for families, including
single parents.
Ontario Property Tax Credit
Starting in 2010, the proposed enhanced Ontario Property Tax Credit would be
paid annually to low- to middle-income Ontario homeowners and renters who are 18
years of age or over or who have a spouse or a common-law partner or live with
their child. Like the existing property tax relief, it would be based on
occupancy cost — that is, property tax paid or 20 per cent of rent paid.
Non-seniors would be able to claim up to $250 plus 10 per cent of occupancy cost
and seniors would be able to claim up to $625 plus 10 per cent of occupancy
cost. The credit would not exceed occupancy cost and would be subject to a
maximum of $900 for non-seniors and $1,025 for seniors. It would then be reduced
by two per cent of adjusted family net income over $20,000 for single
individuals and over $25,000 for families, including single parents. This credit
would benefit about 2.3 million families and individuals.
- ---------------------------------------------------------------------------------------------------------------------
Program Parameters for the Proposed Ontario Sales Tax Credit Table 1
and Ontario Property Tax Credit
- ---------------------------------------------------------------------------------------------------------------------
Phase-out Range — Adjusted Family Net Income(1)
Phase- --------------------------------------------------------
Maximum out Singles Families
Amount(1) Rate --------------------------------------------------------
Begins Ends Begins Ends
- ---------------------------------------------------------------------------------------------------------------------
Family
Size Income(2)
---------------------
Ontario Sales $260 per adult and child 4% $20,000 $26,500 $25,000 2 $38,000
Tax Credit in a family 3 $44,500
(OSTC) 4 $51,000
5 $57,500
- ---------------------------------------------------------------------------------------------------------------------
Ontario Property Non-seniors: $900 $65,000(3) $70,000(3)
Tax Credit -------------------------- 2% $20,000 ----------- $25,000 ---------------------
(OPTC) Seniors: $1,025 $71,250(3) $76,250(3)
- ---------------------------------------------------------------------------------------------------------------------
Notes:
(1) The amounts and income thresholds for the OSTC and OPTC would be indexed
annually for inflation.
(2) Maximum income for the OSTC varies with the number of people in the family;
it rises to $64,000 for a family of six, and by $6,500 for each additional
family member.
(3) The maximum income for the OPTC depends on the property tax or rent paid.
These upper limits represent the maximum possible income at which someone
could stop receiving the OPTC. For many people, especially tenants, the
maxima would be much lower. For example, a non-senior family would have to
pay over $2,700 a month in rent to receive the OPTC with income at or near
$70,000.
- -------------------------------------------------------------------------------------------------------------------
Sales Tax Transition Benefit
Up to three non-taxable payments would be made to eligible Ontario residents
aged 18 and over in June 2010, December 2010 and June 2011. Individuals under 18
years of age would also be eligible if they have a spouse or common-law partner
or live with their child. Eligible families (including single parents) with
adjusted family net incomes of $160,000 or less would receive three payments
totalling $1,000. Eligible single individuals with adjusted net incomes of
$80,000 or less would receive three payments totalling $300. The maximum benefit
would be reduced by five per cent of income over these income thresholds. This
proposed measure would provide about $4 billion to 6.5 million eligible
individuals and families to help smooth the transition to the proposed new sales
tax system.
- --------------------------------------------------------------------------------
Ontario Sales Tax Transition Benefit Table 2
- --------------------------------------------------------------------------------
Payment Month Single Individuals Single Parents and Couples
-----------------------------------------------------------
Maximum Phase-out Maximum Phase-out
Benefit Range Benefit Range
- --------------------------------------------------------------------------------
June 2010 $100 $80,000-$82,000 $330 $160,000-$166,600
December 2010 $100 $80,000-$82,000 $335 $160,000-$166,700
June 2011 $100 $80,000-$82,000 $335 $160,000-$166,700
- --------------------------------------------------------------------------------
Total $300 $1,000
- --------------------------------------------------------------------------------
How the Tax Changes Would Benefit People
Ontarians would benefit from the greater prosperity that comes from a stronger,
more competitive economy that creates more jobs, provides higher incomes and
better supports public services that Ontarians depend on.
People would also benefit from the permanent income tax cuts, enriched tax
credits and the transition payments.
- --------------------------------------------------------------------------------
"On the whole, Ontario's 2009-10 budget establishes a positive direction for the
next few years.... It provides additional support for low-income families and
individuals. It takes a bold step towards a more effective and efficient tax
system, through harmonization of Ontario's consumption tax with the GST."
Hugh Mackenzie, former Research Director, United Steelworkers of America and
former Executive Director, Ontario Fair Tax Commission, March 27, 2009
- --------------------------------------------------------------------------------
The following examples illustrate the impact of the proposed tax changes. The
impacts are shown for:
o the first full year of the HST, when individuals and families would receive
two of the transition benefit payments;
o the third year, when the transition benefit would no longer be provided;
and
o at maturity, when the HST credits for businesses would be fully phased in.
These examples show that the transition benefit, combined with the permanent PIT
cuts and enriched tax credits, would more than offset the HST impacts for many
families, especially those with lower incomes and those with children.(4)
- -----------------------
(4) The specific impacts on individual households may vary according to their
actual consumption patterns, sources and divisions of income, tax credits
and deductions, and level of savings. The examples do not include the
benefits to households from higher Gross Domestic Product and personal
disposable incomes as the result of the tax changes.
[Chart 2: Impact of Proposed Sales Tax Changes and Tax Relief — Single
Parent on Ontario Works, 2 Children (ages 5 & 7): bar graph]
[Chart 3: Impact of Proposed Sales Tax Changes and Tax Relief — Single
Senior, Pension Income $20,000: bar graph]
[Chart 4: Impact of Proposed Sales Tax Changes and Tax Relief — Single
Individual, $30,000: bar graph]
[Chart 5: Impact of Proposed Sales Tax Changes and Tax Relief — Couple,
$70,000, 2 Children (ages 5 & 10): bar graph]
COMPETITIVE BUSINESS TAXES
The 2009 Budget proposed $4.5 billion in business tax relief over three years
that would lower business costs, enhance Ontario's competitiveness and support
growing small businesses. These measures would build on the tax relief already
in place, such as the elimination of the Capital Tax for manufacturers
retroactive to 2007 and complete Capital Tax elimination on July 1, 2010.
The comprehensive tax package proposed in the 2009 Budget would permanently and
significantly reduce taxes for large and small businesses across the province.
For example, CIT rates would be cut, beginning July 1, 2010, as follows:
o the general CIT rate would be cut from 14 per cent to 12 per cent and
further reduced to 10 per cent over three years;
o the CIT rate on manufacturing and processing, mining, logging, farming and
fishing income would be cut from 12 per cent to 10 per cent;
o the small business CIT rate would be cut from 5.5 per cent to 4.5 per cent;
and
o the small business deduction surtax of 4.25 per cent would be eliminated.
How the Tax Changes Would Benefit Business
When the proposed Ontario CIT rate cuts are fully implemented, Ontario's
combined federal-provincial CIT rate of 25 per cent would be lower than the
current average corporate tax rate among developed countries and about 15
percentage points below the average combined federal-state general CIT rate in
the U.S. Great Lakes States — Ontario's key competitors for jobs and
investment.
[Chart 6: Ontario's Competitiveness with the U.S.: bar graph]
- --------------------------------------------------------------------------------
"The HST will lower business input costs and stimulate investment in capital
equipment — a necessary step for restructuring and leaner production among
companies in struggling industries like Ontario's automotive sector.... This
change will simplify the lives of small, medium and large businesses, allowing
them to focus on expansion, investment and job creation. All of this will add to
the competitiveness of Ontario businesses."
Glen Hodgson, Chief Economist, Conference Board of Canada, September 25, 2009
- --------------------------------------------------------------------------------
The HST would also provide substantial tax savings for businesses. When fully
implemented, businesses would save $4.5 billion a year through input tax credits
on business purchases.
In addition, businesses would save over $500 million a year in compliance costs
from the move to a single HST administration.
These tax and cost savings could be used to reduce prices or invest in new
machinery and equipment, allowing Ontario businesses, large and small, to better
compete in the export market or domestically against imports, and to create new
jobs.
Ontario's marginal effective tax rate(5) (METR) on new business investment would
be cut in half, making Ontario one of the most competitive jurisdictions in the
industrialized world for new investment. Ontario's position as one of the best
places in the world to invest would be further strengthened by other actions the
government has taken to improve competitiveness, such as investments in
infrastructure, skills training and innovation.
[Chart 7: Three Ways Business Would Save Under the HST]
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(5) The METR is a comprehensive measure of the tax that applies to an
incremental dollar of income from new capital investment. It reflects the
combined effect of federal and provincial corporate income taxes, rules
related to depreciation, investment tax credits, capital and sales taxes.
[Chart 8: Cutting Ontario's METR on New Business Investment in Half: bar graph]
SUPPORTING INNOVATION AND KEY SECTORS
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The McGuinty government continues to partner with key sectors to help Ontario
businesses be well positioned to succeed in an increasingly competitive global
economy.
The entertainment and creative industries are an important component of the new
knowledge economy. These industries enhance creativity and innovation in the
province, and in turn boost economic growth by attracting businesses, skilled
workers and highly mobile professionals and investors. Ontario provides
significant support to strengthen its entertainment and creative cluster.
STREAMLINING THE DIGITAL MEDIA TAX CREDIT FOR LARGE GAME DEVELOPERS
The 2009 Budget proposed to enhance the Ontario Interactive Digital Media Tax
Credit rates from 25 per cent (30 per cent for small corporations) to 40 per
cent for qualifying corporations, regardless of size, that develop their own
eligible products and to 35 per cent for corporations that develop eligible
products under a fee-for-service arrangement.
To streamline the tax credit for large game developers and strengthen Ontario's
competitiveness for investment in this sector, the government is proposing
additional changes to better support large, specialized game developers that
develop eligible interactive digital media games in Ontario.
It is proposed that, effective after March 26, 2009, a 35 per cent refundable
tax credit on Ontario salaries and wages would be available annually to
certified game developers that incur at least $1 million of Ontario labour
expenditures per year in the development of eligible interactive digital media
games. A certified game developer generally would have at least 80 per cent of
Ontario payroll or 90 per cent of annual revenues attributable to interactive
digital media game development.
ENHANCING THE PRODUCTION SERVICES TAX CREDIT
To support the film and television sector, Ontario announced an enhancement to
the Ontario Production Services Tax Credit (OPSTC) on June 29, 2009. The OPSTC
is a 25 per cent refundable tax credit for labour expenditures available to
corporations for qualifying foreign film and television production services and
non-certified domestic film and television productions in Ontario. Effective for
expenditures incurred after June 30, 2009, the OPSTC would be expanded to
additional production expenditures incurred in Ontario, including eligible
service contracts as well as the purchase or rental of qualifying tangible
properties, such as equipment and studio rentals.
CHAPTER VI
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How to Participate in the
2010 Pre-Budget Consultations
HOW TO PARTICIPATE IN THE 2010 PRE-BUDGET CONSULTATIONS
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There are several ways to submit your thoughts and ideas to the government. In
addition to a number of roundtables with groups plus larger pre-budget
consultation sessions, you can visit the Ministry of Finance website at
www.fin.gov.on.ca to submit your ideas for the 2010 Budget. Click on "Tell Us
What You Think" in the What's New menu and complete the form provided. You can
also e-mail your input to submissions@ontario.ca, fax it to 416-325-0969 or mail
it to: The Minister of Finance, c/o Budget Secretariat, Frost Building North,
3rd Floor, 95 Grosvenor Street, Toronto, ON M7A 1Z1.
In particular, the Minister of Finance is interested in hearing Ontarians' views
on what more the government can do during uncertain economic times to manage
Ontario's finances and protect important public services.
When preparing your comments, please use the following questions to frame your
submission:
1. What processes should the government put in place to enable it to move out
of deficit?
2. What steps should the government take to streamline and provide better
public services to Ontarians?
3. Government priorities are job creation, health care, education, strong
fiscal management and economic growth. How should the government balance
this multitude of priorities? Given the considerable fiscal challenges,
what should be the core priorities of the 2010 Budget?
Information on which communities and locations the Minister plans to visit will
be posted at www.fin.gov.on.ca in November 2009. Individuals who wish to attend
one of these consultations can call toll-free 1-800-263-7965 or 1-800-263-7776
TTY.
