Provincial Budget

What the estimates mean for the sector

On May 12, the Ontario government released the 2020-21 Expenditure Estimates. The estimates provide more details on the government’s plan for the year starting April 1, 2020. They build on the 2020 “mini-budget” tabled March 23 with the COVID-19 Action Plan. 

Of course, a plan tabled in March 2020 could only, at best, begin to prepare us for a turbulent year to follow. The pandemic and economic downturn mean the published numbers may bear little resemblance to what happens over the year. That said, spending plans for operating dollars on the whole are similar to 2019, when fairly deep cuts were made across a vast number of program areas related to the nonprofit sector. 

Released in the middle of a pandemic, the Expenditure Estimates were bound to contain a boost to health spending. Beyond that, the Ontario government would be no better off than most of us in predicting what the rest of 2020-21 might look like. Consequently, a spending plan that looks much like last year’s, with a few cuts reversed and many programs reorganized or combined, was an understandable course of action. 

In targeted areas, on which there has been significant criticism (think autism, public health, legal aid), some of the damage has been repaired, but generally not enough to see a spending growth trend in critical areas affecting nonprofits and the communities they serve. There is also a worrying trend in spending less on capital – the building and maintenance of bricks and mortar for child care centres, schools, health centres, and nonprofit housing. 

Whether this cautious approach will be a cause for regret as other jurisdictions opt for public stimulus to curb the worst effects of the economic downturn will be a question to consider over the next year.

What nonprofits can do

ONN encourages nonprofits across Ontario to document and share with government the impact of the work they do in communities – and the impact of the pandemic on their work. By doing this, we all contribute to the powerful story of our community organizations and how we handled the challenges and opportunities presented by COVID-19 and the economic downturn. 

What the province should do next

The year is still young and there is opportunity for the Government of Ontario to step up and create a robust COVID-19 economic response that supports communities, including a stabilization fund for the nonprofit sector. With 58,000 organizations across the province, the sector is a critical economic driver and is being decimated by the crisis. Despite the challenges, nonprofits and their workers are showing how resilient they are, using innovative ways to continue serving communities. A healthy nonprofit sector on the recovery side of this crisis would mean organization could reopen, rehire, and continue to make communities vibrant and inclusive places to live and work.

So, what are the Expenditure Estimates?

The Expenditure Estimates, also known as the budget estimates, provide details of each ministry’s spending plans, including both operating and capital expenditures. The estimates are the government’s formal request for approval from the Ontario legislature of the government’s plan for the year starting April 1. 

Regardless of the unprecedented circumstances, the Ontario government is required to publish a detailed spending plan and it is important for accountability purposes to track government spending plans and actual spending (“actuals”) from one year to the next. 

These are highlights concerning programs affecting nonprofits. For all expenditures, and year-to-year comparisons at the program level, please refer to the estimates for the last twenty years.

Digging into the data

For the most recent (2018-19) open data table at the transfer payment agreement level, see Public Accounts Vol. 3. This data is searchable and downloadable. Data on 2019-20 transfer payments have not yet been published.

What are we comparing?

The comparisons for this year represent changes from the 2019-2020 expenditure estimates to the 2020-2021 estimates. Inflation was at 2 per cent before the pandemic, meaning spending should generally grow by this amount to offer the same level of services. This analysis does not take inflation into account. It is important to note that previous years’ data has been revised by government to reflect ministry organizational changes. The web page for each ministry estimates includes a table called “Reconciliation to previously published data” that summarizes the financial impact of these reorganizations.

We also took a look at the mini-budget’s interim actuals for 2019-20 (see Table 2.8) to examine the degree to which ministries were over or underspent in the year that ended March 31, 2020, compared to the 2019 Budget.

Expenditures by ministry

  • Base funding increased from $309 million in 2019-20 to $314 million in 2020-21, still well down from $384 million in 2017-18
  • Ministry totals appear lower in 2020-21 because infrastructure funding is moved to the Ministry of Infrastructure in 2020-21, but also because of an unusual insurance payout of $175 million due to 2019 crop conditions
    • Better Public Health and Environment planned spending for 2020-21 is down $2.2 million from last year to $77.3 million
    • Under Strong Agriculture, Food and Bio-product Sectors and Strong Rural Communities, economic development is down $16.5 million in 2020-21 from last year and capital spending is down $74.5 million. The reduction in economic development spending includes a $2.7 million cut to Canadian Agricultural Partnership-Federal-Economic Development and a $9 million cut to the food industry. The Ontario Wine Fund, however, got a $7.7 million boost
  • The Ministry was significantly underspent – by 8 per cent – in 2019-20, having spent only $1.78 billion out of a budget of $1.93 billion. The plan for 2020-21 is to spend $1.68 billion
    • Legal Aid Ontario can expect $327 million this year, up from $323 million. However, this is still well down from its budget of $436 million in 2018-19. A further $31 million in cuts were expected for 2020-21, but the Minister announced this would not go forward when he tabled Bill 161 in December 2019
    • Planned spending for Grants for Sexual Assault Initiatives are down $1 million from 2019-20 to $14.8 million, while Victim Crisis Assistance Ontario is up $2 million to $19 million. Special Victims’ Projects are down 20 per cent from last year to $5.9 million
    • Indigenous Justice is up $7 million to $39 million
  • Interim actuals for 2019-20 are $17.4 billion, up from $16.8 billion in spending the previous year. The plan for 2020-21 is to spend $17.6 billion
  • Highlighted operating expense estimates include the following:
    • Financial and Employment Supports: $9.88 billion (up $341 million from 2019-20)
      • Ontario Disability Support Program – Employment Assistance $43 million (down $5.8 million)
      • Ontario Works – Employment Assistance $183.7 million (down $15.5 million)
      • Note: It is unclear whether these reductions are related to the transfer of ministry employment programs to new service system managers under Employment Ontario (which is accounted for in the Ministry of Labour, Skills Development and Training)
    • Family Responsibility Office: $45.3 million (down $1.5 million from 2019-20)
    • Children and Youth at Risk: $2.04 billion (up $88 million)
      • Transfer payments for Child Welfare – Community and Prevention Supports $57.6 million (up $28 million) and for Child Welfare – Indigenous Community and Prevention Supports $86.4 million (up $25 million)
    • Supports to Individuals and Families: $4.36 billion (up $279 million)
      • Operating support to Community Living is back up to $68 million from a budget of $56.8 million last year (it had been $69 million in 2018-19)
      • Supports to Victims of Violence has a budget of $158.7 million (up $3.7 million)
      • Child and Youth Community Supports has a budget of $188.5 million (down $1.6 million)
      • Autism has $600 million, up $268.6 million from last year
      • Children’s Treatment and Rehabilitation Services gets a boost to $210.9 million from $117 million last year
      • Operating expenses for Residential Services are $1.847 billion, up from $1.685 billion last year
  • Children, Community and Social Services Capital Program (buildings & maintenance) will have $23 million to spend in 2020-21, down 39 per cent from the previous year’s budget of $37.5 million – and down 76.5 per cent from 2017-18 actual spending of $97.8 million
  • Office of Women’s Issues: $21.4 million (down $0.4 million)
  • Language Training and Newcomer Settlement Supports: $73.7 million (down $2.2 million)
  • The Poverty Reduction Strategy (initiated by the previous government), which had a budget of $14.3 million in 2018-19, was cut in half last year and is down to $1.7 million planned spending for 2020-21
  • Ministry spending continues its free fall from $840 million in 2017-18 to $786 million in 2018-19 to interim actuals of $602 million in 2019-20, with a plan to spend $577.8 million in the coming year
  • For the second year in a row, there are no references to social enterprise in the ministry plans
  • In terms of transfer payment spending:
    • New $25-million Regional Opportunities Investment Tax Credit. However, nonprofit enterprises are not eligible
    • The Jobs and Prosperity Fund has dropped from $160.7 million to $137.5 million
    • Numerous business investment lines have been eliminated, such as the $67-million Ontario Research Fund
    • The Sector Support Grants have a budget of $10.4 million, up from $7.9 million the previous year
  • Child Care and Early Years programs
    • Capital expenses are planned at $10 million for the second year in a row, following actual spending of $94.3 million in 2018-19. (The 2019 Ontario Budget included a commitment that $1 billion would be spent over five years to create child care spaces in schools, with care to be delivered by nonprofit or for-profit providers)
    • Of the $2.269 billion in planned child care operating expenses, $375 million is for families via a tax credit (down from $390 million in 2019-20) and $1.87 billion is for operating child care programs through transfer payment agreements (up from $1.78 billion)
  • Northern Economic Development planned spending is down $50 million to $223 million (operating), and down $10 million to $78 million (capital)
    • Aboriginal Economic Development transfer payments will increase to $26.2 million from $13.2 million last year and $19.5 million in 2018-19
    • The Northern Ontario Heritage Fund has a budget of $47.5 million, down from $60 million last year and $70 million in 2018-19
  • After dismantling the cap-and-trade system in 2018 and reducing ministry spending from $851 million in 2017-18 to $687 million in 2018-19 and $629 million in 2019-20, the Ontario government has allocated $656.9 million to this portfolio in 2020-21 (including $33 million in capital spending). Most ministry budget lines have made modest gains a year after seeing sizable reductions
  • Highlights of year-over-year changes:
    • $4 million has been reinstated for Environmental Planning and Action
    • Environmental sciences and standards operating expenses: $43.3 million (up $2.5 million from 2019-20)
    • Climate change and resilience: $20.8 million (up $2 million)
    • Ontario Parks: operating $6 million (down $3.7 million); capital reinstated to $5.4 million after a year at $2.5 million
    • Conservation and water protection: $6 million (up $5.2 million)
    • $5 million for the Muskoka Watershed Initiative (new in 2018, not found in the 2019 estimates)
  • Planned spending is essentially flat at $6.1 million for 2020-21
  • Service Ontario, the main entry point to government for individuals and enterprises, was reduced from $258 million in 2017-18 to $219 million in 2018-19 and again to $214 million in 2019-20. For 2020-21, the program’s planned spending increases to $227 million
  • Overall, ministry spending has been rising faster than inflation, which is expected given Ontario’s population is growing and aging. Ministry spending will rise 5.5 per cent from $59,921 in 2019-20 (interim actual) to $63,215.3 million (planned) for 2020-21. That increase, however, includes the COVID-related $2 billion boost for the Population and Public Health Program, of which $1.8 billion goes to the COVID-19 Health Sector Response Fund
    • The $28.7 billion line (up 3.2 per cent from 2019-20), formerly reserved for Local Health Integration Networks (LHINs), is now listed as Health Services and Programs, delivered through the mega-agency Ontario Health. This agency also took on cancer care, health quality, and other functions last year. While the 2019-20 estimates simply stated funding levels by LHIN, the 2020-21 estimates have more useful breakdowns:
      • Operation of hospitals: $18.9 billion
      • Home care: $3.2 billion
      • Community support services: $645 million
      • Assisted Living Services in Supportive Housing: $341 million
      • Community health centres: $479 million
      • Community mental health: $1.162 billion
      • Addiction program: $252 million
      • Child and youth mental health: $435 million
    • Under Population and Public Health:
      • Outbreaks of Disease gets a boost to $346.8 million from $170.8 million in 2019-20
      • Public Health Ontario (government agency) gets $142.7 million, up from $134.5 million in 2019-20, but still down from $147.7 million in 2018-19
      • The Healthy Communities Fund no longer appears
    • The Health Capital program, which had grown from $1.7 billion in 2018-19 to $1.8 billion in 2019-20, is down to $1.3 billion for 2020-21
      • Capital funding for Community health programs has been reduced from $57 million in 2019-20 to $37 million in 2020-21
  • Ministry base spending was $940 million in 2017-18, $935 million in 2018-19, and $950 million in 2019-20 (interim actual). The forecast for 2020-21 is $946.9 million.
  • Ontario Trillium Foundation (OTF):
    • OTF received an in-year cut of $15 million toward the end of 2018-19, bringing their $115 million budget down to $100 million. For 2019-20, the budget was set at $103.5 million, which was fully spent according to the interim actuals. The plan for 2020-21 is another $103.5 million, meaning $23 million less over the last two years that would otherwise have supported nonprofits, First Nations, and small municipalities
  • Heritage, tourism, arts & culture:
    • Ontario Arts Council remains at $60 million for the second year (after sustaining cuts in 2018-19 and 2019-20). Similarly, the Ontario Music Fund remains at $7 million after losing $1 million last year
    • Arts sector support is down from $6.6 million to $2.2 million. Heritage sector support is steady at $5.7 million
    • Festivals and events grants are down slightly from $20 million in 2019-20 to $19.5 million in 2020-21
  • Sport & recreation
    • Four spending lines in 2019-20 totalled $50.5 million in transfer payments (with dedicated funding for Indigenous and youth programs). These lines have been reduced to two (“Sport” and “Active recreation”), but the total has increased to $53.1 million
  • Capital projects:
    • The Tourism & Cultural capital spending line for transfer payments has a total of $71.4 million, of which $34.8 million is for sport and recreation capital projects (new line item) and $11.8 million is for culture capital projects (down from $14 million in 2019-20). There is also $24.8 million available for Rehabilitation and Repair capital projects, down from $26.6 million in 2019-20
  • Last year, we noted an 8 per cent cut to base funding for 2019-20. Actual spending on base funding for the year just ended was $78 million, up from $75 million in 2018-19 but still down from $86 million in 2017-18. The spending plan for 2020-21 is $82.2 million, with no money set aside for land claim settlements. Actual spending on settlements was $1.1 billion in 2017-18, $215 million in 2018-19, and $14 million in 2019-20 (interim actual)
    • Indigenous Economic Development Fund is down to $7 million from $8.2 million in 2019-20
    • Participation Fund gets a boost to $13 million from $1.9 million
    • Policy Development Engagement Fund is increased to $6.5 million from $5.7 million

 

  • New to the list of the ministry’s priorities this year is the “smart initiative” for capital asset management to improve how infrastructure is planned, procured and delivered, as well as the Unsolicited Proposals framework
  • The ministry looks to deliver on a higher number of infrastructure projects, with total funding set to jump from $444 million in interim actuals in 2019-20 to a projected $862.6 million in 2020-21. This figure includes time-limited funding for Waterfront Toronto and Federal-Provincial Infrastructure Programs, as well as amounts transferred from the Ministry of Agriculture, Food and Rural Affairs
  • Major infrastructure spending creates opportunities for community benefit agreements
  • Training and Skills Development (including Employment Ontario) moved to the Ministry of Labour in 2019. Base funding for the ministry increased from $213 million in 2019-20 to $244 million in 2020-21, not including Demand-Driven Employment and Training Programs, which increased from $970 million to $1.03 billion in 2020-21
  • The Pay Equity Commission is steady at $3 million
  • The Occupational Health and Safety Program’s Prevention Office gets a boost to $116 million from $103 million – closer to the $118 million it spent in 2017-18
  • The Employment Standards enforcement program sees a slight dip to $46.4 million from $47.3 million in 2019-20
  • The Employment Ontario system had its overall operating funding reduced by $123.8 million to $1.269 billion in 2019-20. This is essentially flat for 2020-21 at $1.265 billion
    • Within this envelope, funding for Employment & Training transfer payments had been reduced by $54 million from 2018-19 to $1.049 billion in 2019-20. This amount is up slightly to $1.058 billion for 2020-21
  • Splitting off Long-Term Care from the Ministry of Health in 2019 resulted in a $4.394-billion operating budget restated for 2019-20. This has been increased to $4.621 billion for 2020-21
  • In 2019-20 the former Ministry of Health and Long-Term Care allocated $4.8 million in capital funding for Long-Term Care. There is no stated budget for capital expenditures related to Long-Term Care homes in 2020-21
  • The Housing Program receives $927 million (operating) and $161 million (capital) for 2020-21, including the following program expenses:
    • Community housing program: $351 million in operating dollars, up from $343 million. This was formerly “Payments to Service Managers Including Non-Profit Operations in Unorganized Territories”
    • Homelessness Programs: $401.7 million in operating dollars replacing Ending homelessness ($63 million in 2019-20) and Homelessness prevention ($323.7 million in 2019-20)
    • National Housing Strategy Programs (cost-shared with the federal government) have a new budget of $88 million (operating)
    • Indigenous and Community Housing Initiatives are flat at $8.4 million (operating) for 2020-21
    • Multiple capital funding streams have been combined. Total capital spending on the Housing Program in 2020-21 will be $161 million, down from $218.7 million in 2019-20 (includes federal dollars)
  • Seniors Affairs transfer payments have increased from $19 million in 2019-20 to $31.5 million in 2020-21
  • The Accessibility program has seen a reduction in operating funding from $19.5 million in 2019-20 to $16 million in 2020-21, with very little funding making it out the door in the form of transfer payments this year ($2.3 million)
  • The Anti-Racism Directorate is flat at $4.9 million in operating funding, with no funding allocated for external initiatives. The directorate has not had funding for external initiatives since 2018-19, when it had $800,000
  • The ministry plans to spend $66 million on Ontario Provincial Police fleet (vehicle) management in 2020-21, which is approximately 15 per cent more than the Ontario government plans to spend on Child Welfare – Community and Prevention Supports (Ministry of Children, Community, and Social Services)
  • Overall, the Ontario Provincial Police is slated to receive $1.23 billion in operating dollars for 2020-21, which is more than the budgets for community housing ($351 million), Indigenous affairs ($82 million), legal aid ($327 million), sport and recreation ($53.1 million), assisted living ($341 million) and employment standards enforcement ($46.4 million) combined

Summary table with ministry totals