Treasury Board Secretariat

Office of the President

99 Wellesley Street West

Room 4320, Whitney Block

Toronto, ON M7A 1W3

Tel.:  416-327-2333

Ministry of Finance

Office of the Minister

7^th Floor, Frost Building South

7 Queen’s Park Crescent

Toronto ON M7A 1Y7

Telephone:  416-325-0400

Secrétariat du Conseil du

Trésor

Bureau du président

99, rue Wellesley Ouest

Édifice Whitney, bureau 4320

Toronto (Ontario) M7A 1W3

Tél. :  416 327-2333

Ministère des Finances Bureau du ministre

7 étage, Édifice Frost Sud

7 Queen’s Park Crescent

Toronto ON M7A 1Y7

Téléphone:  416-325-0400

Contents

Foreword

Introduction

Statement of Responsibility

Highlights

Financial highlights

Analysis of 2021–22 Results

Revenue

Expense

COVID-19 analysis

Statement of financial position analysis

Financial assets

Infrastructure expenditures

Liabilities

Risks and risk management

Key Financial Ratios

Fiscal Management

Non-Financial Activities

Health care

Education

Postsecondary education

Children’s and social services

Justice

Condition and capacity of provincial tangible capital assets

Transparency and Accountability

Recent developments in public sector accounting standards

The C.D. Howe Institute Fiscal Accountability Report

CONSOLIDATED FINANCIAL STATEMENTS

Auditor’s Report

Consolidated Statement of Operations

Consolidated Statement of Financial Position

Consolidated Statement of Change in Net Debt

Consolidated Statement of Change in Accumulated Deficit

Consolidated Statement of Cash Flow

Notes to the Consolidated Financial Statements

Schedules to the Consolidated Financial Statements

Guide to the Public Accounts

Glossary

Sources of Additional Information

Original signed by

Original signed by

Original signed by

Beili Wong, FCPA, FCA

Comptroller General and

Deputy Minister,

Office of the Comptroller

General Treasury Board Secretariat

Greg Orencsak

Deputy Minister,

Ministry of Finance

Maureen Buckley, CPA, CA

Assistant Deputy Minister

and Provincial Controller,

Treasury Board Secretariat

  2021–22 Financial Highlights

  ($ Billions)

  Consolidated Statement of Operations

  For the fiscal year ended March 31

  Total Revenue

  Expense

Programs

Interest on debt

  Total Expense

  Reserve

  Annual Surplus / (Deficit)

  Consolidated Statement of Financial Position

  As at March 31

Financial Assets

Liabilities

  Net Debt

Non-Financial Assets

  Accumulated Deficit

  ¹ The Consolidated Financial Statements are reported using the 2021 Budget as the Budget comparator.

  Note: Numbers may not add due to rounding.

The Ontario government ended with a $2.1 billion surplus for the fiscal year ended March 31, 2022, comparing to the previous year’s deficit of $16.4 billion, mainly due to higher revenues (see Table 1 above).

Total revenues are $185.1 billion, which are $20.2 billion or 12.2 per cent higher than the previous year, primarily due to increases in taxation revenue and net income from Government Business Enterprises, partially offset by decreases in transfers from the Government of Canada. See details on pages 7-8.

Total program expenses are $170.5 billion, which are $1.5 billion or 0.9 per cent higher than the previous year. Investments are higher in the health, postsecondary education and justice sectors. Program expenses in education, children’s and social services and other program sectors are lower primarily due to one-time COVID-19 investments in 2020–21. See details on pages 12-15.

Interest on debt is higher than the previous year by $0.3 billion, or 2.4 per cent, mainly due to increased debt primarily to fund investments in capital assets. See details on page 21.

Non-financial assets, including capital assets, increased by $9.3 billion from the previous year. The net book value of Ontario’s capital assets, such as buildings and transportation infrastructures, grew by $7.7 billion during the year. Ontario invested $14.7 billion in assets owned by the government and its consolidated entities, which reflect new capital investments, mainly in the transportation, health and education sectors. The government also made $3.0 billion in additional capital investments in transfers to non-consolidated partners and other infrastructure expenditures. See details on pages 25-27.

Total liabilities increased by $19.1 billion and total financial assets increased by $12.3 billion, resulting in an increase of $6.8 billion or 1.8 per cent in net debt from the previous year (see details on pages 24-29). The accumulated deficit decreased by $2.4 billion, or 1.0 per cent, from the previous year mainly as a result of the reported surplus of $2.1 billion. See details on page 53.

The Ontario government ended with a $2.1 billion surplus for the fiscal year ended March 31, 2022, comparing to a forecasted deficit of $33.1 billion in the 2021 Budget, primarily due to higher revenues (see Table 1 above).

Total revenues are $185.1 billion, which are $31.1 billion or 20.2 per cent higher than projected in the 2021 Budget, largely due to higher taxation revenues reflecting a resilient economy and higher-than-expected inflation. Transfers from the Government of Canada, net income from Government Business Enterprises were also higher than projected, while lower-than- expected revenue from other non-tax revenue was reported by ministries and government agencies. See details on page 9.

Total program expenses are $170.5 billion, which are $2.5 billion or 1.4 per cent lower than the 2021 Budget. Investments are higher in the health and justice sectors — mainly due to additional funding to address the COVID-19 pandemic. They are lower in other sectors. See details on pages 16-18.

Interest on debt is lower than the 2021 Budget by $0.5 billion, or 3.8 per cent, due to lower borrowings of approximately $14.0 billion and higher-than-budgeted interest capitalization. See details on page 21.

  ($ Billions)

  Revenue

Personal Income Tax

Sales Tax

Corporations Tax

Employer Health Tax

Education Property Tax

Ontario Health Premium

Gasoline and Fuel Tax

Other Taxes

  Total Taxation Revenue

  Government of Canada

  Income from Government

Business Enterprises

  Other non-tax revenue

  Total Revenue

  Note: Numbers may not add due to rounding.

Taxation revenue increased by $20.8 billion or 18.8 per cent in 2021–22, mostly reflecting a resilient economy that bounced back strongly from the COVID-19 pandemic-induced downturn in 2020 and rising inflation which contributed to higher nominal GDP growth. Economic activity strengthened in 2021 as the economy reopened, while households and businesses continued to be well supported by programs from all levels of government, and unprecedented monetary policy support by the Bank of Canada. Ontario’s labour market and housing market grew strongly in 2021, while consumer spending and business profits posted strong gains which led to higher revenues from Personal Income Tax, Corporations Tax, Sales Tax and Land Transfer Tax.

Transfers from the Government of Canada decreased by $3.3 billion or 9.7 per cent, mostly reflecting reduced COVID-19 time-limited funding. This decrease was partially offset by higher transfers from major federal funding programs, including the Canada Health Transfer, the Canada Social Transfer, support for home care and mental health, as well as early learning and child care.

Income from Government Business Enterprises (GBEs) increased by $1.4 billion or 28.0 per cent, largely due to higher net income from the Ontario Lottery and Gaming Corporation (OLG) and the Ontario Power Generation (OPG). Higher OLG net income reflects the earlier than expected easing of COVID-19 public health restrictions at land-based gaming sites, as well as strong performance in lottery and digital offerings. Higher OPG net income mainly reflects better operational performance and realized gains in the Ontario Nuclear Funds.

Other non-tax revenue including revenue from the Broader Public Sector increased by $1.2 billion or 7.9 per cent in 2021–22. This increase mainly reflects higher third-party revenue from hospitals, colleges and school boards, and consolidated government agencies following the easing of the COVID-19 restrictions. The overall Other non-tax revenue increase is partially offset by lower revenue from vehicles and driver registration fees due to the elimination and refund of vehicle permit and sticker validation fees.

Taxation revenues were $26.9 billion or 25.7 per cent higher than projected in the 2021 Budget, reflecting a resilient economy that bounced back strongly from the pandemic-induced downturn in 2020, and higher-than-projected inflation. This contributed to nominal GDP growth being significantly stronger than expected, while households and businesses continued to be well supported by programs from all levels of government, and unprecedented monetary policy support by the Bank of Canada.

Transfers from the Government of Canada were $3.2 billion or 11.7 per cent higher, mainly due to additional one-time funding through the federal Budget Implementation Act, 2021 (Bill C-30) and amendments to the Federal-Provincial Fiscal Arrangements Act to support COVID-19 recovery, and recognizing in-kind federal revenue associated with Personal Protective Equipment (PPE) and COVID-19 testing. These increases were partially offset by lower-than-expected funding for infrastructure programs due to slower-than-expected delivery of projects resulting from the COVID-19 pandemic.

Income from GBEs was $1.9 billion or 42.2 per cent higher, mainly reflecting higher revenue from OPG and OLG. Net income from OPG was higher mainly due to better than forecast operational performance and realized gains in the Ontario Nuclear Funds. OLG’s net income was higher due to stronger-than-expected performance in the OLG lottery business and digital offerings.

Other non-tax revenues, including revenues from the Broader Public Sector, were $0.9 billion or 5.2 per cent lower, mainly due to the elimination and refund of vehicle permit and sticker validation fees. This decline was partially offset by higher revenue from royalties and other miscellaneous revenue sources.

Growth in some revenue sources, such as Corporations Tax and Mining Tax, which can diverge significantly from economic growth in any given year due to the inherent volatility of business profits as well as the use of tax provisions, such as the option to carry losses forward or backward;

The impact of housing completions and resales on HST and Land Transfer Tax revenue which is proportionately greater than their contribution to GDP;

Changes in volume-based gasoline and fuel taxes which are more closely aligned to growth in real GDP as opposed to nominal GDP since these revenue sources are not directly influenced by price changes; and

During 2021–22, continued financial support from all levels of government was provided to people and businesses in response to COVID-19, as well as unprecedented monetary policy support from the Bank of Canada, which contributed to growth in Personal and Corporate Income Tax revenues, but these did not directly increase GDP.

Details of 2021–22 Actual Results

($ Billions)

Expense

Health sector

Education sector²

Postsecondary education sector

Children’s and social services sector

Justice sector

Other programs

Total Program Expense

Interest on debt

Total Expense

Reserve

For presentation purposes, one-time COVID-19-related spending was shown separately within COVID-19 Time-Limited Funding in the 2021 Budget, which have been included in the respective sectors in this table. The change in presentation does not impact ministry allocations or ministry structure(s).

Ontario Teachers’ Pension Plan impact is included in Other programs to align with the presentation in Table 3.8 of the 2021 Budget. In the Consolidated Financial Statements, this item appears under the Education sector. Schedule 4 to the financial statements provides details.

Prior year comparatives have been reclassified to be reflected on the same basis as that used to report the actual current year expenses. See Note 17 to the Consolidated Financial Statements.

Numbers may not add due to rounding.

Health sector expense increased by $6.2 billion or 8.9 per cent over the previous fiscal year, mainly due to increased spending in base health sector programs as the province gradually re-opened during the year, as well as additional spending in response to the COVID-19 pandemic. There was also lower expense due to an accounting adjustment to record personal protective equipment inventory, in compliance with the public sector accounting standards and in alignment with a recommendation from the Office of the Auditor General of Ontario. Key health care investments included:

$1.8 billion for Ontario’s COVID-19 testing strategy and the vaccine roll-out, including laboratory capacity and assessment centres;

$1.6 billion in additional hospital funding which also includes COVID-19 supports;

$1.2 billion to support increased utilization of health care services, including more visits to physicians and practitioners, increased spending on drug programs to support the aging population, as well as the addition of new therapies;

$0.9 billion to stabilize the health and long-term care workforce, including supports for the temporary retention incentive for Ontario’s nurses, the accelerated training program and wage enhancement for personal support workers, and the Long-Term Care Staffing Plan to increase daily direct care for residents;

$0.3 billion in additional investments to expand home and community care services, as well as to address increased demand for mental health services and specialized care for children and youth with eating disorders; and

$0.2 billion to support long-term care homes during the COVID-19 pandemic, including funding for enhanced prevention and containment measures, and for an increased level of care.

While base funding for education increased by $0.4 billion, total education sector expense decreased by $1.4 billion or 4.5 per cent over the previous fiscal year. This is mainly due to time-limited COVID-19 funding supports intended for one year only in 2020–21, such as $0.9 billion for the Ontario COVID-19 Child Benefit and $0.4 billion for the Support for Learners program.

Postsecondary education sector increased by $0.8 billion or 8.2 per cent over the previous fiscal year, mainly due to higher college sector spending from increased on-campus activities after the easing of restrictions and closures due to COVID-19, as well as $0.2 billion for higher spending on student financial assistance.

Children’s and social services sector expense decreased by $0.3 billion or 1.7 per cent over the previous fiscal year, primarily due to temporary federal COVID-19 support programs that directly led to $0.2 billion in lower demand/eligibility for social assistance and the Ontario Child Benefit. In addition, there was lower spending on temporary COVID-19-related programs and supports as conditions of the pandemic have evolved.

Justice sector expense increased by $0.2 billion or 4.2 per cent over the previous fiscal year, mainly due to funding for the COVID-19 Vaccine Distribution Secretariat and the Ontario Provincial Police, as well as improvements to segregation conditions in correctional facilities and the modernization and operation of Ontario’s correctional services system, as well as investments to reduce the backlog of criminal cases.

Other programs expense decreased by $4.1 billion or 11.3 per cent over the previous fiscal year, mostly reflecting:

$2.8 billion decrease due to the tapering off of the time-limited Ontario Small Business Support/Relief Grant payments, which supported small businesses impacted by COVID-19 restrictions;

$2.3 billion decrease primarily due to the wind-down of time-limited COVID-19 investments for municipalities, including $1.4 billion in the federal–provincial Safe Restart Agreement and $0.5 billion in provincial COVID-19 Recovery Funding for Municipalities;

$1.5 billion decrease primarily due to the time-limited Safe Restart Agreement funding provided to support municipal transit systems in the previous year;

$157 million decrease primarily due to the time-limited Canada Emergency Commercial Rent Assistance program ending in 2020–21, which delivered urgent COVID-19-related relief to small businesses and their landlords in partnership with the federal government;

$146 million decrease primarily due to an accounting adjustment to record personal protective equipment as inventory for the non-health sector, in compliance with the public sector accounting standards and aligned with a recommendation from the Office of the Auditor General of Ontario; and

$114 million decrease primarily due to lower uptake from the agricultural sector for demand-driven Business Risk Management programming, driven by various factors such as commodity prices and weather conditions.

The decrease in 2021–22 is partially offset by:

$1.2 billion increase primarily due to higher Employee Pension and Benefits including a one-time change in the basis of estimate for Workplace Safety and Insurance Board (WSIB) expense and an increase in costs for Retired Pensioners’ Benefits;

Approximately $506 million increase related to initiatives to respond to the impacts of COVID-19, including the enhancement to the Reconnect Ontario Program, the creation of the Tourism Recovery Program, and other COVID-19 supports, as well as higher than anticipated demand for the cultural and media tax credits;

$488 million increase mainly due to COVID-19 supports for workers and employers. This includes enhancements to the Skills Development Fund and the Ontario Jobs Training Tax Credit to address challenges in hiring, training, retraining and upskilling workers, as well as protections for workers and employers through the Ontario COVID-19 Worker Income Protection Benefit to reimburse employers for COVID-19 paid leave days;

$449 million net increase primarily due to investments under the suite of Electricity Rate Mitigation programs (Ontario Electricity Rebate and the Comprehensive Electricity Plan) and an increase in contaminated sites liability;

$359 million increase primarily due to increased investments for the Ontario Community Infrastructure Fund and the Investing in Canada Infrastructure Program; and

$68 million increase primarily due to expenses associated with record visitation in Ontario Parks in 2021, additional spending for the Ontario Clean Water Agency, as well as investment in wastewater monitoring to inform public health decision-making.

Health sector expense was $0.8 billion or 1.1 per cent above plan, mainly due to increased investments in hospitals and long-term care homes to address COVID-19, including support for more than 3,000 additional hospital and critical care beds, enhanced prevention and containment measures, as well as retention and stabilization of health human resources including nurses and personal support workers. There was also funding to continue Ontario’s COVID-19 vaccination plan and to expand home and community care services. The variance in the health sector includes $0.5 billion lower-than-planned expense due to an accounting adjustment to record personal protective equipment inventory, in compliance with public sector accounting standards and in alignment with a recommendation from the Office of the Auditor General of Ontario.

Education sector expense was $1.4 billion or 4.5 per cent below plan, primarily due to lower school board spending resulting from a decline in non-government revenue from sources such as fundraising, community use of schools, international student tuition, and lower-than-projected enrolment due to the continued impacts of COVID-19.

Postsecondary education sector expense was $0.1 billion or 0.9 per cent below plan, mainly due to lower-than-expected student uptake based on need for financial assistance as a result of continued federal supports and lower-than-projected enrolment. This was partially offset by higher-than-forecasted college sector spending as a result of campuses re-opening after COVID-19-related restrictions and closures.

Children’s and social services sector expense was $0.8 billion or 4.5 per cent below plan, primarily due to the continuation of temporary federal COVID-19 support programs that led to lower-than-expected demand/eligibility for social assistance and the Ontario Child Benefit. The expense also reflects investments to provide a wage enhancement for eligible personal support workers and direct support workers in the sector.

Justice sector expense was $0.2 billion or 4.2 per cent above plan, primarily due to COVID-19 supports such as the COVID-19 Vaccine Distribution Secretariat, additional funding to address the backlog of criminal cases, and to support the Ontario Provincial Police.

Other program expense that was $1.3 billion or 3.9 per cent below plan, mainly due to:

$2.3 billion decrease primarily due to the transfer of contingency funds for program expenses in various sectors to respond to emerging needs for health care, workers, infrastructure and businesses, and unforeseen events;

$503 million decrease primarily due to realigned implementation timelines for programs such as the Broadband and Cellular Infrastructure Program and the Investing in Canada Infrastructure Program;

$443 million decrease in municipal transfer payments due to revised timelines for municipal transit projects and lower-than-forecasted amortization expense; and

$80 million decrease primarily due to lower uptake from the agricultural sector for demand-driven Business Risk Management programming, driven by various factors such as commodity prices and weather conditions.

The decrease was partially offset by:

Increase of $0.9 billion due to higher Employee Pension and Benefits including a one-time change in the basis of estimate for Workplace Safety and Insurance Board expense and an increase in costs for Retired Pensioners’ Benefits;

Increase of $0.2 billion for supports for workers and employers, including the introduction of the Ontario COVID-19 Worker Income Protection Benefit program and enhancements to the Ontario Jobs Training Tax Credit and the Skills Development Fund to aid in Ontario’s economic recovery;

Increased expense of $186 million due to higher-than-expected forest fire activity across the province and associated emergency support;

Increase of $152 million primarily reflecting additional relief on energy bills during COVID-19;

Increase of $152 million associated with the recognition of contingent liabilities for land and land-related claims and Ontario’s statutory obligations as per the English and Wabigoon River Systems Mercury Contamination Settlement Agreement Act, 1986; and

Net increase of $105 million primarily due to the extension of the time-limited COVID-19-related Ontario Small Business Support/Relief Grant programs and increased funding for tax credit programs, partially offset by lower-than-forecasted spending in time-limited investments.

Health sector expense increased from $59.1 billion in 2017–18 to $75.7 billion in 2021–22, or on average by 6.4 per cent per year. The increased funding is primarily due to:

Support for Ontario’s hospitals and home and community care services;

Investments to meet demand for health care services arising from population growth and increased utilization of drug programs, cancer care treatments and blood services;

Additional funding to improve access to mental health and addiction services;

Investments to address long-term care sector waitlists and capacity challenges by building new long-term care beds, including four new long-term care homes as part of the Accelerated Build Pilot Program; and

Time-limited investments to address the COVID-19 pandemic including funding to prevent and contain the spread of COVID-19 in long-term care homes.

Education sector expense increased from $27.3 billion in 2017–18 to $29.9 billion in 2021–22, or on average by 2.3 per cent per year. The increase is mainly due to:

Higher annual school board funding and enrolment, as well as negotiated school board labour agreements such as compensation increases and investments in staffing and local priorities; and

Federal and provincial initiatives in 2020–21 and 2021–22 to help the education sector respond to the COVID-19 pandemic and support the needs of students and staff.

Postsecondary education sector expense increased from $10.5 billion in 2017–18 to $10.6 billion in 2021–22, or on average by 0.3 per cent per year. The increase is mainly due to increased college sector spending. This was partially offset by the wind-down of time-limited federal infrastructure investments and other capital spending, as well as changes in uptake of student financial assistance programs.

Children’s and social services sector expense increased from $16.2 billion in 2017–18 to $17.1 billion in 2021–22, or on average by 1.3 per cent per year. This increase primarily reflects:

New investments to provide wage enhancement for eligible personal support workers and direct support workers in the social services sector;

Increased investment to support client needs in the Ontario Disability Support Program, Ontario Autism Program and Developmental Services programs; and

Additional funding for COVID-19 supports such as enhanced cleaning, personal protective equipment and short-term staffing for residential and community service providers.

Justice sector expense increased from $4.3 billion in 2017–18 to $5.0 billion in 2021–22, or on average by 4.2 per cent per year. The increase is primarily due to:

Investments in programs such as the Public Safety Radio Network, the Guns, Gangs and Violence Reduction Strategy, and Ontario’s Anti-Human Trafficking Strategy;

Funding to improve segregation conditions, modernize the correctional services system though infrastructure investments and support for frontline workers, as well as address the backlog of criminal cases; and

Funding to support the government’s response to COVID-19 through the management of emergency orders, pandemic management in congregate settings, and the COVID-19 Vaccine Distribution Secretariat including mobile vaccination clinics.

Other programs expense increased from $25.0 billion in 2017–18 to $32.1 billion in 2021–22, or on average by 6.5 per cent per year. The increase is primarily due to:

Higher Employee Pension and Benefits due to a one-time change in the basis of estimate for Workers’ Safety Insurance Board expense, and an increase in costs for Retired Pensioners’ Benefits;

Infrastructure program investments in the Broadband and Cellular Action Plan, the Investing in Canada Infrastructure Program and the Ontario Community Infrastructure Fund;

Investments in transportation resulting in growth in amortization expense due to transit and highway capital projects coming into service and increased Metrolinx operating expenses.

Investments under the suite of electricity rate mitigation programs primarily under the Ontario Electricity Rebate program and the Comprehensive Electricity Plan program, as well as time-limited rate mitigation efforts in response to COVID-19;

Time-limited COVID-19 investments to support the hiring, training, retraining, and upskilling of workers through the Skills Development Fund and the Ontario Jobs Training Tax Credit, as well as funding to provide paid sick days through the Ontario COVID-19 Worker Income Protection Benefit program; and

COVID-19 investments for prevention and control measures in retirement homes and support for the temporary pandemic premium pay for frontline workers.

($ Billions)

Expense

Health sector

Education sector

Postsecondary education sector

Children’s and social services sector

Justice sector

Other programs

Total Expense

Note: Numbers may not add due to rounding.

COVID-19 spending in the Health sector increased by $1.1 billion over the previous fiscal year, mainly due to investments to support the COVID-19 testing and vaccine strategy, as well as additional funding to help stabilize the health and long-term care workforce and support infection prevention and containment measures in long-term care homes.

COVID-19 spending in the Education sector decreased by $1.8 billion over the previous fiscal year, mainly due to time-limited COVID-19 funding supports in 2020–21, such as the Ontario COVID-19 Child Benefit, the Support for Learners program, emergency child care and the safe restart of schools. The 2021–22 spending also reflects COVID-19 investments in schools, including temporary staffing, school operations, school ventilation improvements, rapid test kits, learning recovery and renewal, connectivity supports for remote learning technology, and increased access to school board reserves.

COVID-19 spending in the Postsecondary education sector decreased by $0.2 billion over the previous fiscal year mainly due to the time-limited funding provided to postsecondary education institutions in 2020–21 to address the financial impacts of COVID-19.

COVID-19 spending in Other programs decreased by $7.3 billion over the previous fiscal year, mainly due to:

$2.8 billion decrease due to the tapering off of the time-limited Ontario Small Business Support/Relief Grant programming, which supported small businesses impacted by COVID-19 restrictions.

$2.4 billion decrease in the Ministry of Municipal Affairs and Housing mainly due to time-limited investments in 2020–21 such as $1.4 billion in the Safe Restart Agreement and $0.5 billion in provincial COVID-19 Recovery Funding for Municipalities. There was also $0.5 billion lower expense in the Social Services Relief Fund in 2021–22 compared to the prior year.

$1.8 billion decrease due to the conclusion of time-limited funding under the Safe Restart Agreement to support operating pressures for municipal transit systems.

$591 million decrease in electricity bill supports due to the conclusion of funding to defer Global Adjustment charges and reduced need for off-peak Time-of-Use electricity support.

The decrease was partially offset by:

Increase of $760 million in time-limited COVID-19 investments to support the hiring, training, retraining and upskilling of workers through the Skills Development Fund and the Ontario Jobs Training Tax Credit, as well as funding to provide paid sick days through the Ontario COVID-19 Worker Income Protection Benefit program.

The decreased COVID-19 2021–22 spending also reflects an accounting adjustment to record personal protective equipment inventory, in compliance with public sector accounting standards and in alignment with a recommendation from the Office of the Auditor General of Ontario.

In 2021–22, Ontario continued to work in partnership with the federal government to secure federal investments to support the people of Ontario. In total, Ontario received $3.7 billion in COVID-19 time-limited funding in 2021–22 from the federal government.

This amount includes a one-time payment of $1.9 billion in funding through the federal Budget Implementation Act, 2021, and amendments to the Federal–Provincial Fiscal Arrangements Act to support COVID-19 recovery.

Additionally, as part of the time-limited Workforce Development Agreement top-up, Ontario received an additional $388 million.

Through the Safe Long-term Care Fund, Ontario also received a one-time payment of $380 million to support its comprehensive efforts to enhance infection prevention and control in long-term care homes.

This federal revenue also includes various supports for virtual health care, the justice sector, recognition of the value of personal protective equipment (PPE), and the COVID-19 rapid antigen tests received in-kind from the federal government, as well as other supports.

 ($ Billions)

2021–22

Actual

 Cash and cash equivalents

 Investments

 Accounts receivable

 Loans receivable

 Other assets

 Investment in Government Business Enterprises

 Total Financial Assets

 Note: Numbers may not add due to rounding.

Cash and cash equivalents were $0.7 billion higher mainly due to investment maturity payment management;

Investments were $2.4 billion lower, mainly as a result of maturity payment management of provincially held bonds. Investments held by the broader public sector (BPS) have increased slightly. Examples of investments include investments in government bonds and fixed-income securities, such as Guaranteed Investment Certificates and Government of Canada Bonds;

Accounts receivable were $11.6 billion higher mainly due to an increase in taxes receivable and transfer payments from Government of Canada; and

Investment in GBEs were $2.2 billion higher, mainly due to higher net assets in GBEs, including investment earnings from the Ontario Nuclear Funds for nuclear waste management and decommissioning.

  Transportation and transit

  Health

  Education

  Postsecondary education

  Other sectors³

  Totals⁴

  ¹ Includes adjustments for the net book value of assets disposed during the year, as well as changes in valuation.

  ² Mainly transfers for capital purposes to municipalities and universities and expenditure for capital repairs.

  ³ Includes social and justice sectors, broadband infrastructure, government administration, natural resources, and the culture and tourism industries.

  ⁴ Includes third-party investments in consolidated entities such as hospitals, colleges and school boards.

  Note: Numbers may not add due to rounding.

  Accounts payable and accrued liabilities

  Debt

  Other long-term financing

  Deferred revenue and capital contributions

  Pensions and other employee future benefits liability

  Other liabilities

  Total Liabilities

  Note: Numbers may not add due to rounding.

  Use of new financing by Ontario, 2021–22

($ Billions)

  Operating surplus and other transactions¹

  Investment in capital assets owned by the government and its consolidated organizations, including hospitals, school boards and colleges²

  Decrease in the government’s cash and investments funded by cash holdings³

  Decrease in other long-term financing, Tangible Capital Assets financed by Public Private Partnership (P3)⁴

  Net new financing

  ¹ Decrease in cash from a net decrease of $11.9 billion in changes to assets and liabilities net of the government’s operating surplus of $2.1 billion. See the Consolidated Statement of Cash Flow.

  ² New Tangible Capital Asset (TCA) investments of $13.0 billion less proceeds of $0.5 billion from the sale of tangible capital assets.

  ³ Increase in cash due to investment retirements in excess of purchases of $2.3 billion and the build-up of cash reserve of $0.7 billion.

  ⁴ Including net decrease in financing of capital projects through Public Private Partnership (P3). See Note 4 to the Consolidated Financial Statements.

  Note: Numbers may not add due to rounding.

Investments to support wage enhancement for personal support workers to retain the workforce needed to build a stronger and more resilient health care system that is better prepared to respond to a crisis;

Investments to train up to 8,200 new personal support workers for high-demand jobs in Ontario’s health and long-term care sectors to address the shortage in the personal support workforce;

Critical municipal infrastructure through the Ontario Community Infrastructure Fund;

Additional support made available for property tax and energy cost relief to eligible businesses that were required to close or significantly restrict services due to provincial public health measures;

Additional funding for Emergency Forest Fire Fighting to respond to a severe fire season;

Additional funding to Emergency Management Ontario to manage emergency declarations for municipalities and First Nations;

The Ontario COVID-19 Worker Income Protection Benefit to reimburse eligible employers for infectious disease emergency leave paid to employees; and

Additional funding to support hospitals during the COVID-19 pandemic, including expenses such as personal protective equipment, additional staff, infection prevention and control measures, as well as funding to support the rollout of COVID-19 vaccines.

Ontario’s Tourism Recovery Program was implemented to help tourism operators, anchor businesses and attractions to recover from the impacts of COVID-19. This initiative provided support for historically successful businesses that have helped to drive employment and visitation in their regions by assisting with costs related to restructuring, safe reopening, recalibrated marketing activities and partnership development.

Ontario’s Testing Strategy to help contain the COVID-19 virus, protect lives and allow economic activity to continue in the safest way possible;

Funding to support the continued COVID-19 response and recovery in long-term care homes, including prevention and containment measures, as well as to support the health and safety of residents and staff;

Funding to support the administration, distribution and rollout of Ontario’s COVID-19 vaccination campaign; and

Funding to support hospitals in the response to COVID-19.

Supporting municipal transit systems as they recover from the COVID-19 pandemic;

Additional funding to support hospitals during the COVID-19 pandemic, including expenses such as personal protective equipment, additional staff, infection prevention and control measures, as well as the rollout of COVID-19 vaccines;

Investments to help long-term care homes prevent and contain the spread of COVID-19, including increased staffing supports and purchasing additional personal protective equipment and supplies;

The Ontario Business Costs Rebate Program to provide property tax and energy cost rebates to eligible businesses that were required to close or reduce indoor capacity as part of the additional public health measures in response to the COVID-19 Omicron variant;

Applying off-peak Time-Of-Use electricity pricing for residential, small business and farm customers for all hours of the day, 7 days per week for a 21-day period, while Ontario was in modified Step 2 of the Roadmap to Reopen;

The Ontario COVID-19 Small Business Relief Grant to support small businesses that were subject to closures as part of the additional public health measures in January 2022; and

Additional investments to support the COVID-19 Vaccine Distribution Secretariat, safe operations of correctional facilities during the pandemic, and frontline Ontario Provincial Police and correctional officers.

Key Financial Ratios

For the fiscal year ended March 31

2021–22

Sustainability

Net Debt- to-GDP (%)

Net Debt to Total Revenue (%)

Net Debt per Capita ($)

Flexibility

Interest on Debt to Total Revenue (%)

Own-Source Revenue to GDP (%)

Vulnerability

Federal Transfers to Total Revenue (%)

Unhedged Foreign Currency Debt (%)

Notes:

1) Net debt was restated to reflect prepaid expenses and inventory supplies being reclassified as non-financial assets, as opposed to financial assets in prior years.

2) Beginning in 2019–20, Ontario is presenting public debt less of any investments in its own bonds and treasury bills.

3) The forecasts of net debt and related ratios in the annual Budget are based on a calculation that includes the reserve.

Sources: Nominal GDP is based on Ontario Economic Accounts, First Quarter 2022, released by the Ontario Ministry of Finance. Population estimates are from Statistics Canada.

Expanding the COVID-19 vaccine rollout to include children and youth aged 5 and older, as well as to administer booster doses to eligible people in Ontario. By March 31, 2022, over 32 million COVID-19 vaccines had been administered across the province;

Making it mandatory for hospitals, long-term care homes, paramedics and home and community care service providers to have COVID-19 immunization policies for all staff, support workers, contractors, students and volunteers. As well, requiring mandatory vaccinations for those working and volunteering in all long-term care homes;

Ensuring the availability of the COVID-19 rapid antigen test supply for Ontario’s most vulnerable populations living and working in the highest risk settings, including hospitals, long-term care homes, First Nation, Inuit and Métis communities, as well as public health units to ensure continued access to testing through the COVID-19 Omicron wave;

Providing support to Ontario’s hospitals and the community health sector to perform more surgeries, MRI and CT scans, and procedures, including on evenings and weekends, as part of a wider, comprehensive surgical recovery plan to provide patients with the care they need; and

Expanding in-patient surge beds and day treatment spaces at four pediatric hospitals for children and youth with eating disorders, given the sharp rise in incidence since the COVID-19 pandemic began.

Proclaiming landmark legislation through the Fixing Long-Term Care Act, 2021, which includes new measures to support the three pillars of the government’s plan to fix long-term care: improving staffing and care; driving quality through better accountability, enforcement and transparency; and building modern, safe, comfortable long-term care homes for Ontario’s seniors.

This legislation establishes a system level target of an average of four hours of daily direct care per resident provided by registered nurses, registered practical nurses and personal support workers, by March 31, 2025.

Supporting the recruitment and retention of the health care workforce, including:

A temporary wage enhancement for personal support workers (PSWs), which became permanent in 2022–23;

A temporary retention incentive bonus for nurses;

Prioritizing the recruitment of the Nursing Graduate Guarantee program positions in acute care settings, resulting in hiring more than 1,000 nurses throughout the year; and

Training over 16,000 new PSWs through the Accelerated PSW Training Program for the long-term care sector.

Expanding hospital capacity with dedicated funding to create more than 3,000 additional hospitals beds, as well as operational funding to ensure all publicly funded hospitals received a minimum one-per cent increase to keep pace with patient needs and increase access to high-quality care for patients and families.

Continued progress to build 30,000 net new long-term care beds and redevelop older beds by 2028. As of June 2022, Ontario has 31,705 new and 28,648 upgraded beds in the development pipeline, including 5,231 beds under construction and 1,774 beds opened.

Strengthened the inspections program in the long-term care sector by taking steps to double the number of inspectors by fall 2022 and launched a new proactive inspections program to improve the quality of care provided to residents.

Announced nine new Ontario Health Teams, for a total of 51, which will care for 95 per cent of the province’s population at maturity.

Updating the COVID-19 health and safety guidance for schools and child care centres that prioritized the health and safety of children, students and staff, and provided school boards and child care operators with resources and flexibility while accommodating regional differences in trends of public health indicators.

Providing school boards and child care operators with targeted COVID-19 health and safety investments including for PPE, staffing, school-focused nurses in local public health units, testing capacity, health and safety training and supports for students’ mental health and students with special education needs.

Improving child care. As of April 1, 2021, there were 464,538 licensed child care spaces for children 0-12 years of age, a 0.4 per cent increase over the previous year.

Continuing to modernize curriculum to ensure students have foundational and transferrable skills that prepare them for work and life. This includes:

New Grade 9 de-streamed mathematics and science courses, and a revised elementary science and technology curriculum;

Announcing a plan to expand First Nations, Métis and Inuit content and learning in the Grades 1-3 social studies curriculum to further strengthen mandatory learning on residential schools, and to foster greater understanding within the province’s education system of the intergenerational legacy borne by Indigenous families;

Expanding access to high-quality online learning courses for secondary school students through partnerships with school boards, TVO and TFO. Also, launching an online learning preview site, allowing students to make informed decisions about their course selections for the 2022–23 school year; and

Continuing to expand job skills programs; including expansion in the 13 Specialist High Skills Major sectors identified as having the strongest focus on technological education and the skilled trades.

Providing financial assistance through the Ontario Student Assistance Program (OSAP) to over 420,000 students in the 2021–22 fiscal year;

A 73 per cent postsecondary education attainment rate in 2021–22, which is a two percentage points increase from 71 per cent in 2020–21;

Through the Virtual Learning Strategy, in partnership with eCampusOntario, supporting over 400 projects to create digital content, develop online learning and teaching skills, and pilot educational technologies to support online course and program offerings; and

Launching Intellectual Property Ontario, a new board-governed agency that will serve as a resource for intellectual property (IP) expertise to help researchers and companies maximize the value of their IP, strengthen their capacity to grow and compete in the global market.

Launching new Ontario Autism Program services, including caregiver mediated early years programs providing access to early years services to over 2,800 eligible families;

Funding 27 new anti-human trafficking projects that will protect and prevent at-risk individuals from being exploited;

Establishing Children at Risk of Exploitation Units in Durham Region and in the City of Toronto — a first for Ontario — and two licensed sites for specialized out-of-home care for children and youth who have been sex trafficked;

Reducing the spread of COVID-19 in congregate care settings through investments and protection measures to reduce transmission and prevent service disruption;

Introducing an online option for families applying to the Special Services at Home and the Assistance for Children with Severe Disabilities programs — a more convenient application process for up to 11,000 families per year;

Expanding the Centralized Intake pilot for Ontario Works to 15 additional municipalities, including Toronto. This now supports 35 municipalities and 104 local Ontario Works offices, with time saved on more than 100,000 applications received and processed to date;

Funding $46 million in healing, health and wellness programs designed and delivered by and for Indigenous peoples in First Nations and in urban and rural communities;

Investing $60 million to increase access to rehabilitation services for children and youth with special needs — helping to serve up to 10,000 more preschool-aged children with speech and language needs, and up to 47,000 more children and youth with rehabilitation needs annually; and

Investing approximately $190 million in community-based agencies across Ontario to provide services and supports to women and dependents who have experienced violence or are at risk of experiencing violence, including gender-based domestic violence.

Responding to the COVID-19 pandemic with innovative digital solutions in the criminal justice system, including moving services online and expanding remote hearing technology. As well, implementing the Virtual Courts and Criminal Justice Video Strategies, Criminal Justice Digital Design, and GPS electronic monitoring for bail strategies.

Working to ensure safety in courtrooms by upgrading courtroom equipment to support virtual and hybrid hearings; installing plexiglass barriers and hand sanitizer stations and providing personal protective equipment; as well as developing and implementing an online jury pre-screening and check-in tool for prospective jurors to complete before their summons date. Since its launch, the tool has screened over 140,000 potential jurors.

Expanding digital filing to an additional 36 courthouses and dozens of other police and justice sector partners, in order that police could file criminal charges electronically, helping to speed up the criminal justice process.

Implementing a new Criminal Case Backlog Recovery Strategy that supports the hiring of additional Crown prosecutors and new staff to prioritize public safety, safeguard an individual’s constitutional right to a trial within a reasonable timeframe, and ensure offenders are held accountable for their crimes.

Partnering with Ministry of Health and Metrolinx to implement GO-VAXX, a new, convenient mobile option for people to receive their COVID-19 vaccine, including hotspot communities as well as in malls, festivals, community hubs and events. As of March 31, 2022, more than 52,300 people had received vaccination via GO-VAXX.

Recognizing the need to support police with leading-edge equipment and technology to meet the complex demands of modern police operations. This includes providing the tools they need to do their jobs, improve public safety and strengthen roadside law enforcement efforts across Ontario, such as investing in the Automated Licence Plate Recognition technology to mitigate the elimination of licence plate stickers by allowing the capability of capturing vehicles of interest such as amber alerts, drivers with a suspended licence and stolen vehicles.

Investing in the build of a new, modern 345-bed multi-purpose correctional centre complex in Thunder Bay to support safe community reintegration and address overcrowding in correctional facilities. The investment builds on Ontario’s strategy to invest more than $500 million over five years to transform correctional services.

Constructing new structures at both the Thunder Bay Correctional Centre and the Kenora Jail allowed for increased access to literacy, skills development and technology programs that support safe community reintegration. This investment also helped address overcrowding in Kenora and Thunder Bay during construction of the new Thunder Bay Correctional Complex.

Coordinating the evacuation of approximately 3,700 First Nation community members during a challenging forest fire season, as well as piloted new hosting models in Sudbury, Peel Region and London.

Investing in correctional and police frontline workers, and in new measures to prevent harmful items and substances such as drugs, alcohol, weapons and cell phones from entering Ontario’s adult correctional facilities. This included investments in more tools and technology to increase detection, enhance security measures, and improve the collection, analysis and sharing of data with justice sector partners to ensure the safety of staff and individuals in custody. As well, investing in the mental health services available to the Ontario Provincial Police (OPP) and their families. Police personnel are among the professionals who are most likely to be exposed to occupational stress situations while protecting communities.

The Province compiled its first infrastructure asset inventory in 2016 as a key step in managing provincial assets more effectively. The infrastructure asset inventory is now updated annually and currently contains information such as the location, age, condition and value of over 15,000 tangible capital assets, including buildings and Ontario’s entire road and bridge network. This covers the majority of the infrastructure assets owned or consolidated (i.e., certain BPS organizations) by the Ontario government, as well as some other assets that are funded in part, but not owned or consolidated, by the government.

The Province uses the infrastructure asset inventory to track, monitor and report on the physical condition of assets. For example, the infrastructure asset inventory contains indicators such as Facility Condition Indexes (FCIs), Bridge Condition Indexes (BCIs) and Pavement Condition Indexes (PCIs), which help to inform the state of infrastructure assets.

Ontario has expanded its infrastructure asset data to include other relevant data and analysis such as the current and projected capacity and utilization of assets. This integrated data provides a base to support evidence-based infrastructure planning decisions which help ensure that infrastructure investments provide value for money and are made at the right time and the right place.

INDEPENDENT AUDITOR’S REPORT

To the Members of the Legislative Assembly of the Province of Ontario

Opinion

I have audited the accompanying Consolidated Financial Statements of the Province of Ontario, which comprise the Consolidated Statement of Financial Position as at March 31, 2022, and the Consolidated Statements of Operations, Change in Net Debt, Change in Accumulated Deficit, and Cash Flow for the year then ended, and notes to the Consolidated Financial Statements, including a summary of significant accounting policies.

In my opinion, the accompanying Consolidated Financial Statements present fairly, in all material respects, the consolidated financial position of the Province of Ontario as at March 31, 2022, and the consolidated results of its operations, the consolidated changes in its net debt, the consolidated change in its accumulated deficit and its consolidated cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Basis for Opinion

I conducted my audit in accordance with Canadian generally accepted auditing standards. My responsibilities under those standards are further described in the Auditor’s Responsibility for the Audit of the Consolidated Financial Statements section of this report. I am independent of the Province of Ontario in accordance with the ethical requirements that are relevant to my audit of the Consolidated Financial Statements in Canada, and I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Other Accompanying Information

The Government of Ontario (Government) is responsible for the information in the 2021-22 Public Accounts of Ontario Annual Report.

My opinion on the Consolidated Financial Statements does not cover the other information accompanying the Consolidated Financial Statements and I do not express any form of assurance conclusion thereon.

In connection with my audit of the Consolidated Financial Statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Consolidated Financial Statements or my knowledge obtained during the audit, or otherwise appears to be materially misstated.

If, based on the work I have performed on this other information, I conclude that there is a material misstatement of this other information, I am required to report that fact in this auditor’s report. I have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these Consolidated Financial Statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of Consolidated Financial Statements that are free from material misstatement, whether due to fraud or error.

In preparing the Consolidated Financial Statements, management is responsible for assessing the Province of Ontario’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the Government either intends to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Province of Ontario’s financial reporting process.

Auditor’s Responsibility for the Audit of the Consolidated Financial Statements

My objectives are to obtain reasonable assurance about whether the Consolidated Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Consolidated Financial Statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, I exercise professional judgment and maintain professional skepticism throughout the audit. I also:

•   Identify and assess the risks of material misstatement of the Consolidated Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

•   Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Province of Ontario’s internal control.

•   Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

•   Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Province of Ontario’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Province of Ontario to cease to continue as a going concern.

•   Evaluate the overall presentation, structure and content of the Consolidated Financial Statements, including the disclosures, and whether the Consolidated Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

The audit of the Consolidated Financial Statements is a group audit engagement. As such, I also obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the Consolidated Financial Statements. I am responsible for the direction, supervision and performance of the group audit and I remain solely responsible for my audit opinion.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control identified during the audit.

I also provide those charged with governance with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards.

Revenue (Schedules 1 and 2)

Personal Income Tax

Sales Tax

Corporations Tax

Employer Health Tax

Education Property Tax

Ontario Health Premium

Gasoline and Fuel Taxes

Other Taxes

Total Taxation

Transfers from Government of Canada

Fees, Donations and Other Revenues from Hospitals, School Boards and Colleges (Schedule 10)

Income from Investment in Government Business Enterprises (Schedule 9)

Other

Expense (Schedules 3 and 4)

Health

Education³

Children’s and Social Services

Interest on Debt

Postsecondary Education

Justice

Other Programs

Reserve

Annual Surplus/(Deficit)