Ontario spent $7B less than planned this year, FAO report finds

The Ontario government has spent about $7 billion less than planned this year, according to the province’s budget watchdog, including about $1.6 billion less in healthcare largely due to a tapering of its COVID-19 response.

In a report released Wednesday by the Financial Accountability Office (FAO), officials say that unaudited spending through to the end of March 31, or the 2022-23 fiscal year, totalled about $187.1 billion.

This is about $7.2 billion below planned spending. The FAO said this money can be used to reduce the province’s deficit and net debt.

As such, the office projects a small budget surplus in 2022-23 of $37 million.

Jeffrey Novak, Acting Financial Accountability Officer, told reporters Wednesday the underspending is “a little bit higher than average.” He noted that the average over the last four years is about $5.9 billion. However he also said that last year the government’s underspending was below average.

“This is a $2.2 billion improvement compared to the Province’s deficit projection of $2.2 billion in the 2023 Ontario Budget, tabled on March 23, 2023,” a statement reads.

“The difference between the two forecasts largely reflects more up-to-date information available to the FAO, which includes more recent spending information.”

The report found that all sectors spent less than planned, with areas like “other programs” and “health” leading the way.

Just over $1.6 billion less was spent within the health sector this fiscal year. A large portion of this was funding for population and public health to the tune of about $416 million, which the FAO notes was driven by about $341 million less for the COVID-19 response program.

This includes, Novak said, things like COVID-19 testing and the impact of the vaccine rollout.

“It was those kind of factors that were lower than the previous year,” he said.

The province also spent about $435 million less for “health services,” which includes about $279 million for the operation of hospitals and $137 million for home care.

The province also transferred just over $2.7 billion from its contingency funds to various other programs.

Ontario Liberal Finance Critic Stephanie Bowman released a statement calling the underspending “fiscally irresponsible.”

“This underspending has a direct impact on our lives: it is felt when the local hospital ER is closed, when children do not get the classroom supports they need, and when people are on the streets because this government is failing to provide housing and mental health supports,” she said.

“This government pretends that they are broke so they cannot be asked to fix what is broken. Every quarter the FAO proves them wrong. The people of Ontario deserve transparency in our public finances, and they deserve a government that works for them.”

A spokesperson for the Office of the President of the Treasury Board told CTV News Toronto in a statement that "FAO opinions are not representative of actual government spending."

"In the past five months, the FAO has changed its outlook on health spending three times. Just over a month ago, the FAO said we're overspending on health care, postsecondary education, and other program sectors by billions of dollars. Now, it says that we are underspending on those same sectors by millions," Christopher Martin-Chan said.

"Our government will continue with our responsible, targeted approach to build a strong Ontario."

Final audited accounts are expected to be released in September.