Ontario Finances - 2004-05 third quarter

Archived Release

Ontario Finances - 2004-05 third quarter

Ministry of Finance

Quarterly update - December 31, 2004 TORONTO, Feb. 14 - NOTE: This is an incomplete version of Ontario's third-quarter finances. For the complete version, please see the Ministry of Finance web site at http://www.gov.on.ca/FIN/english/finances/2004/ofin043e.htm ------------------------------------------------------------------------- Fiscal Summary ($ Millions) ------------------------------------------------------------------------- 2004-05 -------------------------- Actual Budget Current* In-Year 2003-04 Plan Outlook Change ------------------------------------------------------------------------- Revenue(xx) 68,400 78,360 79,041 681 Expense Programs 62,104 66,695 67,515 820 Capital 2,175 2,575 2,580 5 Interest on Debt 9,604 10,329 10,114 (215) ----------------------------------- Total Expense 73,883 79,599 80,209 610 Reserve - 1,000 1,000 - ------------------------------------------------------------------------- SURPLUS/(DEFICIT) (5,483) (2,239) (2,168) 71 ------------------------------------------------------------------------- * Third-quarter fiscal forecast as at December 31, 2004. (xx) Includes one-time revenue gain of $3,881 million related to the projected elimination of the liability for non-utility generator power purchase agreements in 2004-05. 2004-05 FISCAL OUTLOOK As at December 31, 2004, a deficit of $2,168 million is projected for 2004-05, an in-year improvement of $71 million from the deficit projected in the 2004 Ontario Budget, and a $3.3 billion improvement from the 2003-04 deficit of $5.5 billion. The deficit outlook of $2.2 billion includes a one-time revenue gain of $3.9 billion related to the projected elimination of the above-market liability for power purchase agreements with non-utility generators, based on a reformed electricity market structure being in place this fiscal year, and sufficient and appropriate evidence that the liability has been eliminated. Since the 2004 Budget, the Electricity Restructuring Act, 2004 has been introduced and passed by the Legislature. The Act provides the legislative framework for the government's new vision for the electricity sector. Effective January 1, 2005, the full costs of the existing power purchase agreements signed by the former Ontario Hydro are being recovered from electricity consumers. Decisions on the initial regulated rate for Ontario Power Generation regulated output and other implementation details are expected to be announced shortly. The Act, associated regulations and implementation details will be assessed to determine whether sufficient and appropriate evidence exists to support the elimination of the liability. The outlook for 2004-05, excluding this one-time gain, is a deficit of $6.0 billion (including a reserve of $1.0 billion). ONTARIO ECONOMIC OUTLOOK Ontario's economic performance over the last calendar year was broadly in line with the 2004 Budget assumptions. The current average private-sector estimate of real GDP growth in 2004 equals the Budget projection of 2.3 per cent. The outlook for 2005, however, has deteriorated in large part as a result of the unexpected strength of the Canadian dollar. Recent private-sector forecasts for 2005 real growth average 2.6 per cent compared to a Budget assumption of 3.2 per cent. Slower growth in 2005 would not affect revenues in 2004-05 significantly but will need to be taken into account in developing the 2005 Budget. The Ministry of Finance is currently analyzing a number of risks including the ongoing volatility of the Canadian dollar, fluctuations in oil prices, and wage settlements as it determines prudent growth forecasts for 2005 and beyond and the resulting effect on future revenues, and expenses. FISCAL PERFORMANCE ------------------------------------------------------------------------- REVENUE AT $79.0 BILLION - The revenue outlook, at $79,041 million, is up a net $681 million from the 2004 Budget and is unchanged from the 2004 Ontario Economic Outlook and Fiscal Review. The increase from Budget, as reported last quarter, is primarily due to the First Ministers' health agreement, which increased federal payments to Ontario by $824 million. EXPENSE AT $80.2 BILLION - The total expense outlook, at $80,209 million, is up a net $610 million from the 2004 Budget and is unchanged from the 2004 Economic Outlook and Fiscal Review. The increase from Budget, as reported last quarter, is primarily due to increased health spending of $824 million, equal to Ontario's entitlement from the First Ministers' health agreement, partially offset by interest on debt savings of $215 million. OPERATING EXPENSE - The program expense outlook, at $67,515 million, is up a net $820 million from the 2004 Budget and down a net $5 million from the 2004 Economic Outlook and Fiscal Review. Changes this quarter include: - Ministry of Agriculture and Food: An additional $20 million in assistance under the Companion Program Strategy during the transition to the Agricultural Policy Framework, fully offset from the Contingency Fund. - Ministry of the Attorney General: An additional $23 million for the recent Judges' and Justices' of the Peace salary awards, fully offset from the Contingency Fund. - Ministry of Children and Youth Services: An additional $3 million in investments to support the establishment of a dedicated youth justice system, and to support the ministry in its mandate to reform the child welfare system, both fully offset from the Change Fund. - Ministry of Consumer and Business Services: A reduction of $6 million in the ministry's operating program, transferred to fund ServiceOntario capital requirements. - Ministry of Culture: An additional $1 million in funding for the Royal Botanical Gardens, transferred from the ministry's capital program to operating. - Ministry of Education: An additional $60 million for Teacher Development Accounts, fully offset from the Change Fund, to provide one-time funding to support teachers' professional development and school board collective bargaining; and an additional $2 million for the Reporting Entity Project, an initiative to add hospitals, school boards and school authorities, and community colleges to the Province's financial plans and reports, in accordance with Public Sector Accounting Board (PSAB) recommendations, fully offset from the Ministry of Finance. - Ministry of Finance: An additional $20 million for special payments to the City of Hamilton, fully offset from the Contingency Fund; and a reduction of $7 million to reflect transfers to the Ministries of Health and Long-Term Care, Education, and Training, Colleges and Universities to implement the Reporting Entity Project, an initiative to add hospitals, school boards and school authorities, and community colleges to the Province's financial plans and reports, in accordance with PSAB recommendations. - Ministry of Health and Long-Term Care: An additional $4 million for the Reporting Entity Project, an initiative to add hospitals, school boards and school authorities, and community colleges to the Province's financial plans and reports, in accordance with PSAB recommendations, fully offset from the Ministry of Finance. - Ministry of Intergovernmental Affairs: An additional $5 million to support rebuilding and recovery efforts in areas affected by the tsunami in South Asia, fully offset from the Contingency Fund. - Management Board Secretariat: An additional $2 million, fully offset from the Change Fund, for various investments including implementation of an Ontario Public Service (OPS) Workplace Safety and Insurance Board claims management strategy, human resources transformation projects, funding for the Project and Partnership Centre of Excellence and a horizontal review of OPS central agencies. - Ministry of Municipal Affairs and Housing: An additional $8 million for disaster relief assistance due to flooding in Peterborough in July 2004, fully offset from the Contingency Fund. This funding supported emergency costs incurred by individuals and small business, as well as response costs incurred by the municipality. - Native Affairs Secretariat: An additional $4 million for land claim settlements, including the Wahta Mohawk land claim and the final payment to Big Grassy First Nation, fully offset from the Contingency Fund. - Ministry of Northern Development and Mines: An additional $1 million in Change Fund investments for mining lands and geosciences systems upgrades, fully offset from the Change Fund. - Ministry of Training, Colleges and Universities: An additional $1 million for the Reporting Entity Project, an initiative to add hospitals, school boards and school authorities, and community colleges to the Province's financial plans and reports, in accordance with PSAB recommendations, fully offset from the Ministry of Finance. - Ministry of Transportation: An additional $2 million in Change Fund investments, including implementation of real time roadside data capture systems and improvements to the Oversize/Overweight electronic permit application process for vehicles, fully offset from the Change Fund. - The Interest on Debt expense forecast, at $10,114 million, is down $215 million from the 2004 Budget and is unchanged from the 2004 Economic Outlook and Fiscal Review. CAPITAL EXPENSE - Capital expense, at $2,580 million, is up a net $5 million from the 2004 Budget and the 2004 Ontario Economic Outlook and Fiscal Review. Changes this quarter include: - Ministry of Consumer and Business Services: An additional $6 million to fund ServiceOntario, transferred from the ministry's operating program to capital. - Ministry of Culture: A reduction of $1 million in the ministry's capital program and transferred to operating, for the Royal Botanical Gardens. RESERVE AT $1.0 BILLION - The reserve at $1 billion, is unchanged from the 2004 Budget and the 2004 Economic Outlook and Fiscal Review. The reserve is included to protect the fiscal plan against unexpected and adverse changes in the economic and fiscal outlook. Any portion of the reserve not required at year-end will be used to reduce the deficit. ------------------------------------------------------------------------- Change Fund Investments ($ Millions) ------------------------------------------------------------------------- 2004-05 ------------------------------------------------------------------------- BUDGET PLAN Investments for Health Care Community Health Services - home care and community mental health 140 Family Health Teams 111 e-Health Initiatives 78 Other Projects (including wait lists and workplace safety) 280 -------- 609 Other Investments ServiceOntario Enhancement 27 College Stabilization 25 Nutrient Management Financial Assistance Program 5 All Other 6 -------- 63 PROJECT APPROVALS SINCE BUDGET Teacher Development Accounts 60 All Other 8 -------- 68 Unallocated amounts remaining 260 ------------------------------------------------------------------------- TOTAL CHANGE FUND INVESTMENTS 1,000 ------------------------------------------------------------------------- - The 2004 Budget included a one-time $1.0 billion Change Fund to support the government's plans to change and improve Ontario's public services. The Fund will help pay for projects that rationalize or better integrate existing programs and services, put in place new systems and processes to reduce long-term costs, or mitigate the demand for services over the long run. - New key investments of $68 million financed from the Change Fund this quarter include: - Ministry of Education: $60 million for Teacher Development Accounts to provide one-time funding to offset some of the costs that teachers now bear for their professional development and to support school board collective bargaining. - All other approvals totalling $8 million include projects supporting transformation in Management Board Secretariat and the Ministries of Children and Youth Services, Northern Development and Mines, and Transportation. - Any unallocated amounts remaining in the Change Fund at year-end will be applied to reduce the deficit. ------------------------------------------------------------------------- Statement of Financial Transactions ($ Millions) ------------------------------------------------------------------------- Current* Actual Outlook 2000-01 2001-02 2002-03 2003-04 2004-05 ------------------------------------------------------------------------- Revenue(xx) 66,294 66,534 68,891 68,400 79,041 Expense Programs 51,396 53,932 57,204 62,104 67,515 Capital(xxx) 2,123 1,890 1,876 2,175 2,580 Interest on Debt 10,873 10,337 9,694 9,604 10,114 --------------------------------------------- Total Expense 64,392 66,159 68,774 73,883 80,209 Reserve - - - - 1,000 --------------------------------------------- SURPLUS/(DEFICIT) 1,902 375 117 (5,483) (2,168) ------------------------------------------------------------------------- Net Debt(+) 132,496 132,121 132,647 138,557 141,493 Accumulated Deficit(+) 132,496 132,121 118,705 124,188 126,356 ------------------------------------------------------------------------- * Third-quarter fiscal forecast as at December 31, 2004. (xx) Includes one-time revenue gain of $3,881 million related to the projected elimination of the liability for non-utility generator power purchase agreements in 2004-05. (xxx) Starting in 2002-03, major tangible capital assets owned by Provincial ministries (land, buildings and transportation infrastructure) are accounted for on a full accrual accounting basis. Other tangible capital assets owned by Provincial ministries will continue to be accounted for as expense in the year of acquisition or construction. All capital assets owned by consolidated government organizations are accounted for on a full accrual basis. (+) Net Debt is calculated as the difference between liabilities and financial assets. The annual change in Net Debt is equal to the Surplus/Deficit plus the change in tangible capital assets. Accumulated Deficit is calculated as the difference between liabilities and financial and tangible capital assets. The annual change in the Accumulated Deficit is equal to the Surplus/Deficit. ------------------------------------------------------------------------- Selected Ontario Economic and Fiscal Statistics ------------------------------------------------------------------------- Current* Actual Outlook 2000-01 2001-02 2002-03 2003-04 2004-05 ------------------------------------------------------------------------- Gross Domestic Product (GDP) at Market Prices ($ Millions) 440,759 453,931 479,556 494,501 516,259 Population (000s) - July 1 11,685 11,898 12,102 12,257 12,393 Revenue as a per cent of GDP 15.0 14.7 14.4 13.8 15.3 Revenue Growth (%) 1.9 0.4 3.5 (0.7) 15.6 Total Expense as a per cent of GDP 14.6 14.6 14.3 14.9 15.5 Total Expense Growth (%) 0.0 2.7 4.0 7.4 8.6 Total Program Expense as a per cent of GDP 11.7 11.9 11.9 12.6 13.1 Total Program Expense Growth (%) 6.1 4.9 6.1 8.6 8.7 Interest on Debt as a per cent of Revenue 16.4 15.5 14.1 14.0 12.8 Interest on Debt as a per cent of Total Expense 16.9 15.6 14.1 13.0 12.6 Interest on Debt as a per cent of GDP 2.5 2.3 2.0 1.9 2.0 Surplus/(Deficit) as a per cent of GDP 0.4 0.1 0.0 (1.1) (0.4) Net Debt per capita ($) 11,339 11,104 10,961 11,304 11,417 Net Debt as a per cent of GDP 30.1 29.1 27.7 28.0 27.4 Accumulated Deficit per capita ($) 11,339 11,104 9,809 10,132 10,196 Accumulated Deficit as a per cent of GDP 30.1 29.1 24.8 25.1 24.5 ------------------------------------------------------------------------- * Third-quarter fiscal forecast as at December 31, 2004. Sources: Ontario Ministry of Finance and Statistics Canada. ONTARIO REAL GROSS DOMESTIC PRODUCT (GDP) UP IN JULY-SEPTEMBER QUARTER - Ontario real GDP grew by 1.0 per cent in the third calendar quarter of 2004, up from a 0.9 per cent pace in the second quarter of 2004. For the year 2004 as a whole, the Ontario Ministry of Finance May Budget forecast of real GDP growth was 2.3 per cent, equal to the current average estimate from private-sector forecasts. ONTARIO UNEMPLOYMENT RATE DROPS TO 6.8 % IN 2004 - Ontario employment increased by 1.7 per cent or 108,000 new jobs in 2004, slightly exceeding the Ontario Budget forecast, while the unemployment rate fell to 6.8 per cent for the year, down from 7.0 per cent in 2003. - In January, Ontario employment fell by 28,300 jobs. The unemployment rate declined by 0.1 percentage points to 6.7 per cent in January. RETAIL SALES UP IN 2004 - Ontario retail sales slipped 0.1 per cent in November, following a 1.3 per cent advance in October. Over the first eleven months of 2004, Ontario retail sales were 2.6 per cent higher than the same period in 2003. Retail sales growth for 2004 will be below the 3.5 per cent rate projected in the 2004 Budget. INFLATION LOWER IN 2004 - The Ontario CPI inflation rate fell to 1.9 per cent (year-to-year) in December from 2.2 per cent in November. In 2004, the Ontario CPI inflation rate was 1.9 per cent, matching the 2004 Budget forecast, down from 2.7 per cent in 2003. HOUSING MARKET STRONG IN 2004 - Annual Ontario housing starts remained at a robust level in 2004, despite declining 0.1 per cent from a 14-year high in 2003. In January 2005, Ontario housing starts fell 11.8 per cent to 71,700 units (seasonally adjusted annual rate), the third decline in as many months. Housing starts totalled 85,100 in 2004 exceeding the 2004 Budget forecast of 77,600 units. - Ontario home resales increased for the fourth consecutive year to a record high of over 197,000 units in 2004, up 7.0 per cent from 2003. ONTARIO BUILDING PERMITS REACH RECORD HIGH IN 2004 - In 2004, Ontario building permits hit a record level for the third year in a row, increasing 2.9 per cent to $23.9 billion. A 6.6 per cent increase in the value of residential permits offset a 3.0 per cent decline in the non-residential component. The value of Ontario building permits issued in December surged 33.1 per cent to $2.5 billion, the highest monthly total on record. EXPORTS AND SHIPMENTS WEAKER - Real Ontario merchandise exports fell 0.4 per cent in the October to December quarter of 2004, following a 1.6 per cent decline in the third quarter (Ontario Ministry of Finance estimates). Real imports rose 2.6 per cent in the final quarter of 2004. On an annual basis, real Ontario exports rose 5.1 per cent in 2004 while imports advanced by an even stronger 7.9 per cent. - In November, the value of Ontario manufacturing shipments fell for the third month in a row, down 0.6 per cent to $25.9 billion. Over the first eleven months of 2004, Ontario shipments were 7.1 per cent higher than the same period in 2003. ------------------------------------------------------------------------- ------------------------------------------------------------------------- ONTARIO KEY ECONOMIC INDICATORS (Per Cent Change from previous period, unless indicated otherwise) ------------------------------------------------------------------------- Annual Quarterly ------------------------------------------ 2002 2003 03:3 03:4 04:1 04:2 04:3 ------------------------------------------ Output (Seasonally Adjusted at Annual Rates) Real GDP 3.4 1.6 (2.4) 4.6 1.8 3.7 4.0 Nominal GDP 5.6 3.1 (0.5) 4.3 4.5 8.6 6.4 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Annual Monthly 2004 ------------------------------------------ 2003 2004 Aug Sep Oct Nov Dec ------------------------------------------ Other Indicators (Seasonally Adjusted) Labour Markets Labour Force (Change in 000s) 174 103 (9) (20) 33 18 6 Employment (Change in 000s) 173 108 (18) 4 25 (2) 7 Unemployment Rate (%) 7.0 6.8 6.8 6.5 6.6 6.8 6.8 Household Sector Retail Sales 3.4 N/A 1.8 (0.4) 1.3 (0.1) N/A Housing Starts (000s)* 85.2 85.1 92.0 85.1 86.9 85.0 81.3 MLS Home Resales(xx) 3.6 7.0 6.3 0.1 (5.2) 10.4 (1.4) Manufacturing Shipments (1.7) N/A 1.5 (0.0) (2.3) (0.6) N/A Transportation Equipment (3.3) N/A 1.6 (0.6) (4.1) (1.6) N/A Consumer Price Index(xx) 2.7 1.9 1.5 1.5 2.1 2.2 1.9 ------------------------------------------------------------------------- Sources: Statistics Canada, Ontario Ministry of Finance, Canada Mortgage and Housing Corporation and Canadian Real Estate Association. ------------------------------------------------------------------------- * Monthly housing starts are expressed at a seasonally adjusted annual rate. (xx) per cent change from a year earlier. N/A equals Data not available. ONTARIO FINANCES FINANCIAL TABLES REVENUE ------------------------------------------------------------------------- ------------------------------------------------------------------------- ($ Millions) 2004-05 ----------------------------- Actual Budget Current* In-Year 2003-04 Plan Outlook Change ------------------------------------------------------------------------- TAXATION REVENUE Personal Income Tax 18,301 18,821 19,050 229 Retail Sales Tax 14,258 15,036 14,876 (160) Corporations Tax 6,658 8,320 8,250 (70) Employer Health Tax 3,753 3,874 3,862 (12) Gasoline Tax 2,264 2,328 2,263 (65) Fuel Tax 681 716 716 - Ontario Health Premium - 1,635 1,622 (13) Tobacco Tax 1,350 1,452 1,452 - Land Transfer Tax 909 927 977 50 Electricity Payments-In-Lieu of Taxes 627 630 630 - Other Taxes 347 259 259 - -------------------------------------- 49,148 53,998 53,957 (41) ------------------------------------------------------------------------- GOVERNMENT OF CANADA Canada Health and Social Transfer (CHST) 6,958 - - - Canada Health Transfer (CHT) - 4,677 5,065 388 Canada Social Transfer (CST) - 2,924 2,924 - CHST Supplements 577 775 775 - Social Housing 528 521 521 - Health Reform Fund 387 582 582 - Medical Equipment 192 193 387 194 Wait Times Reduction Fund - - 242 242 Infrastructure 150 267 267 - Other Government of Canada 1,101 859 859 - -------------------------------------- 9,893 10,798 11,622 824 ------------------------------------------------------------------------- INCOME FROM INVESTMENT IN GOVERNMENT BUSINESS ENTERPRISES Ontario Lottery and Gaming Corporation 2,106 2,117 2,015 (102) Liquor Control Board of Ontario 1,045 1,117 1,108 (9) Ontario Power Generation Inc. and Hydro One Inc. (17) 335 335 - Other Government Enterprises (64) (5) (5) - -------------------------------------- 3,070 3,564 3,453 (111) ------------------------------------------------------------------------- OTHER NON-TAX REVENUE Net Reduction of Power Purchase Contract Liability(xx) 104 4,024 4,024 - Reimbursements 1,206 1,252 1,252 - Electricity Debt Retirement Charge 1,000 1,009 1,009 - Vehicle and Driver Registration Fees 985 987 987 - Power Sales 510 675 675 - Other Fees and Licences 594 536 536 - Liquor Licence Revenue 488 499 507 8 Sales and Rentals 532 403 403 - Royalties 248 239 239 - Miscellaneous Other Non-Tax Revenue 622 376 377 1 -------------------------------------- 6,289 10,000 10,009 9 ------------------------------------------------------------------------- TOTAL REVENUE 68,400 78,360 79,041 681 ------------------------------------------------------------------------- * Third-quarter fiscal forecast as at December 31, 2004. (xx) Includes one-time revenue gain of $3,881 million related to the projected elimination of the liability for non-utility generator power purchase agreements in 2004-05. OPERATING EXPENSE ------------------------------------------------------------------------- ------------------------------------------------------------------------- ($ Millions) 2004-05 ----------------------------- Actual Budget Current* In-Year MINISTRY 2003-04 Plan Outlook Change ------------------------------------------------------------------------- Agriculture and Food 673 549 569 20 Attorney General 1,199 1,162 1,195 33 Board of Internal Economy 196 149 149 - Children and Youth Services 2,640 2,832 2,835 3 Citizenship and Immigration 52 62 62 - Community and Social Services 5,995 6,317 6,317 - Community Safety and Correctional Services 1,666 1,745 1,738 (7) Consumer and Business Services 182 213 207 (6) Culture 303 277 278 1 Democratic Renewal Secretariat - 4 4 - Economic Development and Trade 253 414 414 - Education 9,665 10,623 10,685 62 Teachers' Pension Plan (TPP) 235 359 359 - Energy 116 137 137 - Environment 261 304 304 - Executive Offices 24 19 19 - Finance - Own Account 1,255 1,184 1,197 13 Interest on Debt 9,604 10,329 10,114 (215) Change Fund - 328 260 (68) Community Reinvestment Fund 651 656 656 - Electricity Consumer Price Protection Fund 253 - - - Power Purchases 797 946 946 - Health and Long-Term Care 28,036 29,652 30,480 828 Change Fund - 609 609 - SARS-related and Major One-Time Health Costs 824 - - - Intergovernmental Affairs 6 9 14 5 Labour 117 133 133 - Management Board Secretariat 214 355 358 3 Retirement Benefits 309 433 433 - Contingency Fund - 965 877 (88) Municipal Affairs and Housing 662 692 705 13 Native Affairs Secretariat 15 14 18 4 Natural Resources 516 505 505 - Northern Development and Mines 76 73 74 1 Office of Francophone Affairs 3 4 4 - Public Infrastructure Renewal 18 31 31 - Tourism and Recreation 209 184 184 - Training, Colleges and Universities 3,883 4,194 4,195 1 Transportation 800 862 864 2 Year-End Savings - (300) (300) - ------------------------------------------------------------------------- TOTAL OPERATING EXPENSE 71,708 77,024 77,629 605 ------------------------------------------------------------------------- * Third-quarter fiscal forecast as at December 31, 2004. CAPITAL EXPENSE ------------------------------------------------------------------------- ------------------------------------------------------------------------- ($ Millions) 2004-05 ----------------------------- Actual Budget Current* In-Year MINISTRY 2003-04 Plan Outlook Change ------------------------------------------------------------------------- Agriculture and Food 1 7 7 - Attorney General 24 55 55 - Children and Youth Services - 9 9 - Community and Social Services 10 21 21 - Community Safety and Correctional Services 47 42 42 - Consumer and Business Services 1 2 8 6 Culture 24 70 69 (1) Economic Development and Trade 31 39 52 13 Education 15 27 27 - Energy 53 52 52 - Environment 4 13 13 - Finance 5 4 4 - Health and Long-Term Care 358 346 346 - Management Board Secretariat(xx) (33) (13) (13) - Municipal Affairs and Housing 206 234 237 3 Native Affairs Secretariat - 2 2 - Natural Resources 111 85 85 - Northern Development and Mines 332 447 447 - Public Infrastructure Renewal 18 168 168 - Capital Contingency Fund - 150 134 (16) Tourism and Recreation 51 65 65 - Training, Colleges and Universities 120 171 171 - Transportation 797 679 679 - Year-End Savings - (100) (100) - ------------------------------------------------------------------------- TOTAL CAPITAL EXPENSE 2,175 2,575 2,580 5 ------------------------------------------------------------------------- * Third-quarter fiscal forecast as at December 31, 2004. (xx) Ministries' contributions for investments in Provincially owned land and buildings are recorded as an expense by the contributing ministries. Any resulting adjustment to expense from the capitalization and amortization of most of these Provincially owned land and buildings is recorded in Management Board Secretariat. ------------------------------------------------------------------------- Schedule of Net Investment in Capital Assets - 2004-05 Current Outlook* ($ Millions) ------------------------------------------------------------------------- Government Land and Transportation Organizations' Buildings Infrastructure Capital Assets Total ------------------------------------------------------------------------- Acquisition/Construction of Major Tangible Capital Assets 135 998 432 1,565 Amortization of Provincially Owned Major Tangible Capital Assets (78) (524) (195) (797) ------------------------------------------------------------------------- NET INVESTMENT IN CAPITAL ASSETS(xx) 57 474 237 768 ------------------------------------------------------------------------- * Third-quarter fiscal forecast as at December 31, 2004. (xx) Major tangible capital assets owned by Provincial ministries (land, buildings and transportation infrastructure) are accounted for on a full accrual accounting basis. Other tangible capital assets owned by Provincial ministries continue to be accounted for as expense in the year of acquisition or construction. All capital assets owned by consolidated government organizations are accounted for on a full accrual basis. ONTARIO'S 2004-05 FINANCING PROGRAM ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Provincial Borrowing Program ($ Millions) ------------------------------------------------------------------------- 2004-05 ----------------------------- Actual Budget Current* In-Year 2003-04 Plan Outlook Change ------------------------------------------------------------------------- Deficit 5,483 2,239 2,168 (71) Adjustments for: Non-Cash Items Included in Deficit (707) 3,219 3,237 18 Amortization of Major Tangible Capital Assets (785) (797) (797) - Acquisitions of Major Tangible Capital Assets 1,350 1,565 1,565 - Debt Maturities 13,296 16,087 15,440 (647) Debt Redemptions 1,542 1,041 1,377 336 Canada Pension Plan Borrowing (100) (1,133) (1,033) 100 Increase / (Decrease) in Cash and Cash Equivalents 887 - - - Decrease / (Increase) in Short-Term Borrowing 1,441 150 150 - Other Uses / (Sources) of Cash 3,042 1,380 1,546 166 ------------------------------------------------------------------------- Long-Term Public Borrowing Requirement 25,449 23,751 23,653 (98) ------------------------------------------------------------------------- * Third-quarter fiscal forecast as at December 31, 2004. ------------------------------------------------------------------------- Borrowing Program Status (as at December 31, 2004) ($ Millions) ------------------------------------------------------------------------- Completed Remaining Total ------------------------------------------------------------------------- Province 16,533 3,123 19,656 Ontario Electricity Financial Corporation (OEFC) 2,656 1,341 3,997 ------------------------------------------------------------------------- TOTAL 19,189 4,464 23,653 ------------------------------------------------------------------------- - The Province's Long-Term Borrowing Requirement, at $23,653 million, is down $98 million from the 2004 Budget and up $239 million from the 2004 Economic Outlook and Fiscal Review. Changes this quarter include: - An $800 million increase in Cash and Cash Equivalents, and a $76 million decrease in Short-Term Borrowing. This action was taken because the Province is well ahead in its 2004-05 borrowing program and long-term interest rates remain at very attractive levels. This returns these components of the Long-Term Borrowing Requirement to their Budget Plan levels. - A $98 million increase in Other Uses of Cash mainly attributable to the deferral of a $250 million principal payment on a loan from OEFC to Ontario Power Generation (OPG), partially offset by a smaller- than-expected net increase in loans to the Ontario Student Loan Trust. - The $647 million decline in debt maturing this year is attributable to debt which had extendible features which were exercised - either the investor or the Province had the right to extend the maturity to future years. As part of prudent budget forecasting, it was assumed that this debt would mature in fiscal 2004-05. $608 million of these maturity deferrals have occurred since the release of the 2004 Economic Outlook and Fiscal Review. - A $123 million decline in Ontario Savings Bond (OSB) redemptions as compared to the forecast at the time of 2004 Ontario Economic Outlook and Fiscal Review. - A $4 million decline in Non-Cash Items Included in Deficit which includes a $95 million interest payment on a loan from OEFC to OPG, for which OEFC received a promissory note in lieu of cash. - Long-term public borrowing undertaken as at December 31, 2004, was $19.2 billion as follows: --------------------------------------------------- ($ Millions) --------------------------------------------------- Ontario Savings Bonds 1,144 Domestic Issues 11,634 Euro Medium Term Notes 1,629 Other 4,782 ------------------- 19,189 --------------------------------------------------- Contact Info For further information: Communications and Corporate Affairs Branch, (416) 325-0333, Frost Building North, Queen's Park, Toronto, M7A 1Z1; Ce rapport est disponible en français, Direction des communications et des affaires ministérielles, (416) 325-0333, Edifice Frost Nord, Queen's Park, Toronto, M7A 1Z1; This document is available on the Internet at: http://www.gov.on.ca/FIN/english/engfinances.htm HELP | CONTACT US | PRIVACY | IMPORTANT NOTICES © Queen's Printer for Ontario, 2008-2009 — Last Modified: February 15, 2009 For further information: Communications and Corporate Affairs Branch, (416) 325-0333, Frost Building North, Queen's Park, Toronto, M7A 1Z1; Ce rapport est disponible en français, Direction des communications et des affaires ministérielles, (416) 325-0333, Edifice Frost Nord, Queen's Park, Toronto, M7A 1Z1; This document is available on the Internet at: http://www.gov.on.ca/FIN/english/engfinances.htm