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Ontario revenue up $1.5 billion since November - but no new health care spending announced

Ontario’s third quarter finances came out yesterday.  They confirm that although planned health care funding has increased $404.1 million since the 2019/20 Budget, no further increase has been achieved since November's Ontario Economic Outlook and Fiscal Review. 

 While the lack of new progress since the fall is disappointing, the $404.1 million is a 0.64% funding increase for health care since the Budget.  Total health care funding for 2019/20 is now planned to increase 3.1% since 2018/19.

Also notable:
  • Total revenue is projected to be $157.2 billion in 2019–20, $3.1 billion higher than the 2019 Budget projection and $1.68 billion higher than expected in the fall 2019 Ontario Economic Outlook and Fiscal Review.
  • Program expenses are $2.45 billion higher than in the 2019/20 Budget. The total increase for the year compared to last year is $3.9 billion (so far).  So, in the Budget, program funding was increased 0.91%, while, since then, program funding was increased a further 1.63%, for a total increase of 2.56%.  Clearly, the Budget is far from the whole story in terms of actual expenditures.  In this case, most of the new funding was won after the Budget.  Indeed, this rather minor third quarter report saw most of the in-year increase and 43% of total increase achieved this year -- $1.68 billion out of a total $3.9 billion. The government, apparently, is retreating from its harsh austerity --which has been under significant attack from popular forces.  
  • Notably the 2019–20 Third Quarter Finances “includes additional funding to help keep Ontarians’ electricity bills more stable and affordable”.  This newly announced spending accounts for $1.56 billion, or over 60% of the increase in program expenses since the Budget and virtually all the new program expense announced since the Fall Economic Outlook.   Subsidies to electricity bills will not help reduce greenhouse gas emissions. 
  • Increased total expenses have been moderated by falling interest rates which has resulted in $630 million in debt savings since the 2019/20 Budget, including $200 million since the fall’s Ontario Economic Outlook and Fiscal Review
  • The deficit projection remains at $9 billion – although that includes the $1 billion originally set-aside as a reserve.  At this late stage in the fiscal year (which ends March 31), this probably means most or all of the reserve will simply be used to reduce the deficit.  Notably, they say “additional details on the Province’s fiscal performance for 2019–20 will be provided in the 2020 Budget.”   
  • Economic growth in 2019 is projected to be up to 1.7% from the Ontario Economic Outlook and Fiscal Review forecast of 1.5%

Bottom line – As expected, the fiscal situation is better than the PC government projected.  The PCs are spending that windfall on their political priorities, rather than reducing the deficit.  Unfortunately, since the fall Ontario Economic Outlook and Fiscal Review, those spending priorities have not included health care  -- and so the crisis of under-capacity continues. 
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