Ontario’s fiscal watchdog is projecting a deficit $5.4 billion smaller than the last figure projected by the government because of lower-than-expected program spending.
In a report released on Tuesday, the Financial Accountability Office (FAO) said it arrived at its $8.1 billion deficit after reviewing government spending and finding the province spent $7.2 billion less than planned in all programs.
The Progressive Conservative government, led by Prime Minister Doug Ford, projected a deficit of $13.5 billion in its latest budget presented in April.
Higher-than-forecast revenues partly contributed to the lower projected deficit. The watchdog said its revenue forecast for the 2021-22 fiscal year was $1.6 billion higher than the government’s.
There was also $1.8 billion left over in unallocated emergency funds from the last fiscal year. FAO said this would help reduce the province’s budget deficit and net debt.
Financial reporting officer Peter Veltman said the difference in the deficit figures could probably be attributed to the unpredictable nature of the pandemic, as economic forecasts have been “up and down” over the past two years.
“Given the huge uncertainty because of COVID, I think that explains why there is such a disparity,” he said.
Ontario’s Financial Accountability Officer Peter Veltman said that while the pandemic could explain the underspending and the smaller projected deficit, it’s worth looking at the government’s significant underspending if it becomes a sustained trend. (Frank Gunn/The Canadian Press)
But while the pandemic could explain this year’s finding, Veltman noted that significant government underspending would be worth looking into if it becomes a lasting trend.
“If we’re starting to see these things as a regular feature, then it’s worth taking a deeper look,” he said.
Opposing parties are calling on the Ford government
In education, the report found that the government spent almost $1 billion less than the previous year, largely because of less spending on pandemic-related programs.
There was also less COVID-19-related spending in the “other programs” area — which includes transit money for municipalities, support for the homeless and support for businesses and workers — compared to the previous year.
NDP finance critic Kathryn Fyfe said the $7.2 billion that went unspent represented “stealth cuts.”
“In health and education, people are asking for investment to attract, train, hire and retain the staff we desperately need,” Fyfe said.
“It’s time to invest to restore and improve the public services we all rely on. Instead, Ford’s Conservative government found a way to continue the cuts throughout the year.”
The report said the government spent $4.2 billion more on health care than the previous year, but spending was still $1.8 billion below what was originally projected.
More was spent than the previous year on public health care, physician payments and work at long-term care homes, as well as major hospital projects, the report said. These costs were offset by lower government spending on small hospital projects and hospital operations.
A new report by Ontario’s Financial Accountability Office found that while the provincial government spent $4.2 billion more on health care than the previous year, total spending was still $1.8 billion below budget. (Evan Mitsui/CBC)
The official opposition NDP called the move “incredibly callous and dangerous” amid Ontario emergency department closures amid an ongoing staffing crisis.
Ontario Green Party Leader Mike Schreiner agreed and said the report confirms the Ford government is underspending on critical services.
“It is shameful and inexcusable to underspend health care while nurses and other health care workers are burned out, emergency rooms are overcrowded, if not shut down.”
“If it doesn’t cost money to keep emergency departments open – what does it mean?”
Ivana Yelich, spokeswoman for Ontario Premier Doug Ford, said in a tweet that the FAO was reporting numbers based on “outdated” data that did not reflect actual government spending.
“Just because the money was not recorded as being spent at the time FAO requested the data does not mean that the money was not or will not be spent,” Yelich said.
Richard Mullin, a spokesman for the president of the Treasury Department, echoed Yelich and also pointed to “record investments” by the Progressive Conservative government, such as infrastructure projects in both health and education.
“We have a plan to do that by building Ontario up while supporting those who need help the most.”
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