Ontario Releases 2022-23 Third Quarter Finances
Latest fiscal update demonstrates Ontario’s economy remains resilient amid global challenges
February 15, 2023
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TORONTO — Today, the government released the 2022-23 Third Quarter Finances, to provide an update on Ontario’s economic and fiscal outlook since the release of the 2022 Ontario Economic Outlook and Fiscal Review.
Overall, the report shows that despite global geopolitical conflict, high inflation, rising interest rates and ongoing supply chain challenges, Ontario’s economy continues to be resilient, with real gross domestic product (GDP) estimated to have increased by 3.7 per cent in calendar year 2022.
“While today’s update is positive, Ontario and the rest of the world continue to face ongoing economic and geopolitical uncertainty,” said Peter Bethlenfalvy, Minister of Finance. “Though the road ahead may not be easy, our government’s Plan to Build is a responsible and prudent approach to getting Ontario through the challenges of today while planning for tomorrow.”
The 2022-23 Third Quarter Finances show the government is projecting a deficit of $6.5 billion in 2022-23, an improvement of $6.4 billion compared to the Province’s last published fiscal update. Revenues in 2022–23 are projected to be $9.6 billion higher than forecast, mainly reflecting stronger than expected taxation revenues as a result of higher net tax assessments for 2021 and prior years, based on new information from the Canada Revenue Agency (CRA) received since the 2022 Ontario Economic Outlook and Fiscal Review. Ontario, similar to other provinces, incorporates updated information received from the CRA in its regular financial updates.
Overall program expense in 2022–23 is projected to be $188.6 billion, $3.4 billion higher than forecast in both the 2022 Budget and the 2022 Ontario Economic Outlook and Fiscal Review. Increases in program expense are primarily due to significant one-time costs associated with ongoing land and land-related claims with Indigenous communities where Ontario is in active negotiations, claims are accepted for negotiation or are under review. This additional spending has been partially offset by existing contingences within the fiscal plan, and savings.
“Our government is taking a targeted approach to deliver on our Plan to Build while laying a strong fiscal foundation for the province’s future generations,” said Minister Bethlenfalvy. “We will continue to be transparent with the people of Ontario by providing regular updates on the province’s economic and fiscal situation.”
The government plans to provide its next update as part of the 2023 Budget on or before March 31, 2023.
- Other program expense increases since the release of the 2022 Ontario Economic Outlook and Fiscal Review include spending related to reopening of colleges following the easing of public health restrictions and resulting additional on-campus activity, the government’s commitment to support the City of Toronto to address a portion of its 2022 operating deficit with up to one-third of the city’s projected COVID-19 pressures, and additional funding for prevention and containment of COVID-19 at long-term care homes. These expenses have been partially offset by additional third-party revenues from colleges, savings and the drawdown of existing contingencies within the fiscal plan.
- Interest on debt expense is projected to $13.4 billion, slightly lower than the $13.5 billion forecast in the 2022 Budget and approximately $0.2 billion lower than the $13.6 billion projection in the 2022 Ontario Economic Outlook and Fiscal Review. Due to rising interest rates, Ontario’s cost of borrowing has, however, increased to 4.0 per cent, which is higher than the 3.4 per cent forecast in the 2022 Budget but lower than the 4.2 per cent forecast in the 2022 Ontario Economic Outlook and Fiscal Review.