Ontario underspent on health, Metrolinx and municipal infrastructure, report finds

The Ontario government spent $6.4 billion less than expected in the first three quarters of the 2022-2023 fiscal year, according to the province’s financial watchdog, with less funding being directed to health, education and municipal infrastructure projects.

In a report released Wednesday, the Financial Accountability Office (FAO) said the province expected to spend about $129.2 billion in the first three quarters of the fiscal year, but the actual unaudited spending was about $122.8 billion – roughly five per cent less.

FAO Officer Peter Weltman said it is unusual for the province to underspend by this much. This recent historical average, he told reporters Wednesday, was about two to three per cent.

However, Weltman said it was not “unexpected.”

“It's consistent with our spending projections in our economic and budget outlook reports.”

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According to the report, all sectors spent less than expected.

The province spent nearly $1.2 billion less, or about 2.3 per cent less, in the health sector. A significant part of this is due to lower-than-expected spending—about $605 million less—for the COVID-19 response program, according to the FAO.

The report says that as of Dec. 31, 2022, Ontario had spent 37 per cent of the $1.7 billion budget for the COVID-19 response program.

About $3.5 billion of underspending can be found in “other programs,” which includes money tied to the operation of Metrolinx as well as municipal transit and infrastructure. Weltman said that underspending on infrastructure is a “perpetual thing” as it’s “hard to predict how projects will go.”

Metrolinx has faced criticism lately, especially as it pertains to the Eglinton Crosstown, which was supposed to be complete in 2020. Numerous delays and cost overruns have left residents in limbo. The transit agency has yet to provide a new completion date.

The government also spent about $844 million, or 4.2 per cent, less than expected in education. This included about $396 million less in Child Care and Early Years Programs, including Ontario’s commitment of $10-a-day child care.

Weltman said the underspending is typical of a new program, as there’s “a little bit of start up time.”

‘IT’S A TRANSPARENCY ISSUE’

Weltman said that while underspending is expected—the province is not allowed to spend more than they have allocated—the FAO has seen “an increase in the underspend amounts over the last couple of years.”

“That's a problem again because a government, when they [are] presenting their spending plan, they are getting approval from the people's representatives, MPPs, on what that plan is, how they plan to use public funds. And if there is a significant amount of money that isn't being used, but had been approved,” he said. “And if there is a significant amount of money that isn't being used, but had been approved … that doesn't allow MPPs to have good insight as to what the use of the money that they've approved.”

“It comes again down to budget transparency.”

The government, for its part, called the report a “snapshot in time”—a line used often to describe reports presented by the FAO.

“We're going to continue to make the investments that we have since day one,” President of the Treasury Board Prabmeet Sarkaria told reporters.

Sarkaria said the finance minister has been transparent, providing updates to the public every 90 days as required.

“The full consolidated reports of the province are presented through the Public Accounts and that's when we get the full picture of every single investment that has been made.”

NDP Leader Marit Stiles argued the report was representative of a trend, not a snapshot.

“The government has a responsibility to ensure that health care, education, and social services are publicly funded and accessible to all - but right now, they are failing to live up to that responsibility,” she said in a statement.

Any unused funds would automatically go towards reducing the deficit, Weltman said, adding he cannot say whether that is a “deliberate motive” of the Progressive Conservatives.

The government would not say when asked by reporters what the unused funds would be directed towards.