Ontario spends $2.6B less than planned in first quarter, budget watchdog finds

The Ontario government spent $2.6 billion less than planned in its first quarter, with fewer investments in health and electricity subsidy programs, according to the province’s budget watchdog.

The Ontario Financial Accountability Office (FAO) released a report on Wednesday saying the province spent about $40.2 billion in the first three months of the 2023-24 fiscal year, between April 1 and June 30. The Progressive Conservatives had originally allotted $42.8 billion in spending for this period.

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The lower-than-expected spending can largely be attributed to the health sector. The FAO’s review of unaudited expenditures found the government spent nearly $1.2 billion less than planned, including decreases in health capital, long-term care home programs, and drug programs.

The province noted that the impact on drug programs was largely due to a “delay in posting” for June 2023 payments.

The government also spent about $658 million less than planned for electricity price mitigation and $75 million less in financial and employment supports, which includes the Ontario Disability Support Program.

About $203 million more was spent on transportation—including funding for Metrolinx and other municipal infrastructure provinces—while an additional $25 million was spent on education and $95 million was added to the justice sector.

The FAO found that about $849 million in contingency funds was transferred to various programs by the end of the first quarter. As of June 30, the balance within the contingency fund was about $3.2 billion.

It’s not unusual for governments to change their spending plans throughout the year. In August, the province’s financial watchdog found the government spent about $7 billion less than planned. Any surplus can be used to reduce the province’s deficit and net debt.

At the time, the acting Financial Accountability Officer told reporters the province’s underspending was “a little bit higher than average,” noting the average over the last four years was about $5.9 billion.

According to the FAO, the province’s spending for the entire 2023-24 fiscal year has gone down by $32 million so far, totalling about $197.3 billion. This includes a planned increase of $358 million for the electric vehicle battery manufacturing sector.

However Jeffrey Novak, Acting Financial Accountability Officer, noted on Wednesday that the first quarter of the fiscal “does not necessarily reflect expected spending results for the full fiscal year.”

“The first quarter is always a little bit choppy in terms of how the spending is going. I think there's things we'll keep our eye on,” Novak said.

“It just gives us a first look at how the year is going and it's an opportunity to kind of follow along and see how the year is tracking and how things are expected to end by the end of the year.”