Ontario Premier Doug Ford and his provincial counterparts have called on the federal government to increase spending for health care systems across the country.Adrian Wyld/The Canadian Press
Ontario has allocated $12.5-billion in “excess funds” over the next three years, including a large portion stocked away for contingency purposes, while spending less than required to meet health care needs, the province’s financial watchdog says.
A report released Monday by the province’s arms-length Financial Accountability Office projects a $5-billion shortfall in health care expenditure and $1.1-billion less than required for the education sector to meet commitments in the government’s three-year spending plan.
Premier Doug Ford and his provincial counterparts have called on the federal government to increase spending for health care systems across the country. On Monday, Prime Minister Justin Trudeau offered the premiers $46.2-billion in new funding over the next decade.
Financial Accountability Officer Peter Weltman said overall spending is expected to be lower over the next three years than the province initially planned, as $12.5-billion set aside isn’t needed to deliver existing programs. This is largely attributable to contingency funds, which he said are bigger than usual. Typically around $1-billion, the government allocated $3.5-billion in its contingency funds this fiscal year.
Mr. Weltman said the government has enough money to cover the projected shortfalls or to reduce net debt.
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Without including the contingency fund amounts, the FAO is forecasting a deficit of $2.5-billion this fiscal year, significantly smaller than the province’s fall projection of $12.9-billion in red ink. The office then projects improving budget surpluses over the next four years, growing to $7.6-billion in 2026-27. The province’s outlook, which only spans three years, projected a declining deficit dropping to $0.7-billion in 2024-25.
Critics and opposition parties say they want the government to increase funding for health care immediately, especially as the province asks for more money from Ottawa.
Sheila Block, senior economist for the Canadian Centre for Policy Alternatives, said the projected underfunding in health care and education is “deeply disturbing” when the government has a significant amount of money that can cover the shortfalls.
She argues the province should be spending more on its own to address challenges in the health care sector, and that any deal with the federal government should have restrictions on how it can be spent to ensure it isn’t moved into a contingency fund or spent on another initiative.
“The Premier has been very adamant in some areas about provincial jurisdiction, and I think health care is clearly provincial jurisdiction,” Ms. Block said in an interview with The Globe and Mail. “The province has the responsibility to step up given its current fiscal situation, and I think it is absolutely crucial that there are very strong strings attached to that funding.”
Responding to the FAO report, Ontario’s Ministry of Finance defended the spending plans, pointing to an overall spending increase of $7.9-billion from the previous fiscal year, including more in both the health care and education sectors.
Emily Hogeveen, spokesperson to Finance Minister Peter Bethlenfalvy, said the government is focused on taking a “prudent approach” to respond to global uncertainty and that contingency funds not used in the FAO’s projections can be used to fund government programs, as has been the case previously.
But Mr. Weltman said the government’s increased use of contingency funds is “not a transparent” way to budget, as it makes it more difficult for the public to know what the plans are and where the money is going. This is the second time the FAO has raised these concerns, after a report in October that estimated $44-billion would be allocated for contingency over the next six years.
“This is something that I do feel the government needs to take a harder look at,” he told reporters. “It does impinge on transparency and budgeting.”
Liberal Finance critic Stephanie Bowman also took issue with the growing contingency funds, accusing the government of not painting a realistic picture of the province’s financial situation.
“The people of Ontario deserve to know how much is truly being squirrelled away and why it isn’t being spent on fixing our health care or improving our schools,” she said in a statement.