Ontario spent $3.5B less than planned in first half of 2022-23. Here's what that means

The Ontario government has spent $3.5 billion less than expected in the first half of 2022-23, according to the province’s financial watchdog, with spending increases in some sectors offset by a reduction in planned health-care spending and contingency fund transfers.

In a report released Tuesday, the Financial Accountability Office (FAO) said the province’s total spending plan of $193 billion remained unchanged as of Sept. 30. In total, the province expected to spend about $84 billion in the first two quarters of the year, but the actual unaudited spending was around $80.5 billion.

All sectors spent less than expected in the first half of the fiscal year, Ontario’s Financial Accountability Officer Peter Weltman added.

“There's some reallocations within it, which is normal,” he said. “While the government is spending less than expected this year, overall spending is higher this fiscal year than it was last year.”

In the health-care sector, the government spent $859 million less than expected so far this fiscal year, including about $502 million less in “population and public health,” a subdivision mainly driven by the COVID-19 Response program.

The report found that in the first six months of the fiscal year, the province spent 11 per cent of its COVID-19 Response program’s $1.7 billion budget.

“It could be that they over allocated just because they didn’t want to be caught short because of the experience of the past few years,” Weltman said, while adding he can’t speculate on why the government has only spent a small portion of the pandemic budget.

“There also hasn't been nearly the same level of public health activity. We’re not testing everybody anymore. There’s a lot of things that we were doing that we aren't doing anymore and it could be that they said well, you know, in case we have to go back there let's make sure we have some money set aside.”

NDP Finance and Treasury Board Critic Catherine Fife said that spending $859 million less in the health sector is "indefensible," noting the money could have been spent on a "comprehensive, widespread vaccination campaign."

The Progressive Conservatives argued the FAO report is just a "snapshot in time" and is not fully representative of the government's spending.

The Ministry of Transportation spent $887 million less than expected on provincial transit agency Metrolinx and other capital municipal infrastructure projects, the FAO found, while also spending about $565 million less on operating costs for transit.

Weltman said this funding difference could be the result of infrastructure projects not being on schedule.

“You’re not going to write a cheque for the work if the work hasn't been done. So if the work takes longer to get done, it'll take longer to get the money out. But what that means is the money, instead of being spent now, will get spent later.”

As of the end of the second quarter, the province increased their spending plans by about $387 million; however that spending was offset by a $14 million reduction in planned health-care spending and a $373 million internal transfer from the province’s Contingency Fund.

The majority of the planned health-care spending reductions came from “health policy and research.” The province also increased planned spending for health services such as hospital operation and home care, while also increasing planned funding for long-term care.

Money from the Contingency Fund was sent to the Ministry of Education, likely to support the province’s pledge to provide Ontario parents $200 or $250 education-related “catch up” payments, as well as the Cabinet’s Office.