2017 2018 Annual Report

1.3 MB·English

Treasury Board Secretariat
Public Accounts
of Ontario
Annual Report
Please address your comments on this report to:
and Consolidated
The Honourable Peter Bethlenfalvy
President of the Treasury Board
Room 4320, Fourth Floor, Whitney Block Financial Statements
99 Wellesley Street West
Toronto, Ontario
M7A 1W3
2017–2018
You can also send your comments to the Minister
by electronic mail to: [email protected]
To access this document online, visit Ontario.ca/publicaccounts
© Queen’s Printer for Ontario, 2018
ISSN 0381-2375 (Print)
ISSN 1913-5556 (Online)

Treasury Board Secretariat Ministry of Finance Secrétariat du Conseil du Ministère des Finances
Office of the Minister Office of the Minister Trésor Bureau du ministre
Bureau du ministre
99 Wellesley Street West 7th Floor, Frost Building South 7 étage, Édifice Frost Sud
Room 4320, Whitney Block 7 Queen’s Park Crescent 99, rue Wellesley Ouest 7 Queen’s Park Crescent
Toronto, ON M7A 1W3 Toronto ON M7A 1Y7 Édifice Whitney, bureau 4320 Toronto ON M7A 1Y7
Tel.: [phone] Telephone: [phone] Toronto (Ontario) M7A 1W3 Téléphone: 416-325-0400
Fax: [phone] Facsimile: 416-325-0374 Tél. : [phone] Télécopieur:416-325-0374
Téléc. : 416 327-3790

The Honourable Elizabeth Dowdeswell, OC, OOnt
Lieutenant Governor of Ontario
Legislative Building
Queen’s Park
Toronto, ON M7A 1A1

May It Please Your Honour:

The undersigned have the privilege to present the Public Accounts of the Province of
Ontario for the fiscal year ended March 31, 2018, in accordance with the requirements
of the Financial Administration Act.

Respectfully submitted,

Original signed by Original signed by

The Honourable Peter Bethlenfalvy The Honourable Victor Fedeli
President of the Treasury Board Minister of Finance
Toronto, September 2018 Toronto, September 2018

Contents
Foreword .................................................................................................................................. iii 
Introduction ............................................................................................................................... 1 
Guide to the Public Accounts.................................................................................................. 2 
Financial Statement Discussion and Analysis ...................................................................... 2 
The Consolidated Financial Statements ............................................................................... 2 
Other elements of the Annual Report ................................................................................... 4 
Supporting volumes .............................................................................................................. 4 
Statement of Responsibility .................................................................................................... 5 
Highlights .................................................................................................................................. 9 
Analysis of 2017–18 Results ................................................................................................. 12 
Revenue ............................................................................................................................. 12 
Expense .............................................................................................................................. 18 
Statement of financial position analysis .............................................................................. 24 
Infrastructure expenditures ................................................................................................. 27 
Liabilities ............................................................................................................................. 28 
Risks and risk management ............................................................................................... 30 
Accounting discussion ........................................................................................................ 32 
Subsequent events ............................................................................................................. 35 
Key Financial Ratios .............................................................................................................. 36 
Fiscal Management ................................................................................................................ 38 
Non-Financial Activities ......................................................................................................... 40 
Health care ......................................................................................................................... 40 
Education ............................................................................................................................ 41 
Postsecondary and training ................................................................................................ 41 
Children’s and social ........................................................................................................... 42 
Justice ................................................................................................................................. 42 
Condition of provincial tangible capital assets .................................................................... 43 
Transparency and Accountability ......................................................................................... 45 
Recent developments in public sector accounting standards ............................................. 45 
The C.D. Howe Institute Fiscal Accountability Report ........................................................ 45 
Financial Statement Discussion and Analysis, 2017–2018 i
CONSOLIDATED FINANCIAL STATEMENTS
Auditor’s Report ....................................................................................................................... 49
Consolidated Statement of Operations .................................................................................... 51
Consolidated Statement of Financial Position ......................................................................... 52
Consolidated Statement of Change in Net Debt ...................................................................... 53
Consolidated Statement of Change in Accumulated Deficit .................................................... 53
Consolidated Statement of Cash Flow ..................................................................................... 54
Notes to the Consolidated Financial Statements ..................................................................... 55
Schedules to the Consolidated Financial Statements .............................................................. 99
Glossary ................................................................................................................................. 120
Sources of Additional Information .......................................................................................... 126

ii Financial Statement Discussion and Analysis, 2017–2018
Foreword
I am pleased to present to you the Province of Ontario’s Public Accounts for the year of
2017–18. The Public Accounts offer the people of Ontario an honest and transparent
picture of the province’s financial situation. Unfortunately, these documents also reveal that
under the previous government, spending occurred at an unsustainable level.
Your Government for the People believes that it is our collective responsibility to achieve
fiscal prudence and efficiency while ensuring programs and services meet the needs of the
people we serve. We have, and will continue to, take action and deliver on our promise to
restore accountability and trust in the province’s finances.
The road ahead will be a challenging one, but I can assure you that we are committed to
driving strategic change, and we are focusing our efforts on the priorities that matter most
to you.
Knowing the challenges that we face, we have moved quickly and decisively, securing
experts to lead a thorough line-by-line review of past spending across all government
programs and services. This assessment will help pinpoint the areas we need to focus on
to fix the province’s finances. As part of that, we have launched Planning for Prosperity, an
online public consultation where the people of this great province have had the opportunity
to share their ideas about government services in an open and transparent way.
Additionally, we have taken unprecedented action to restore the people’s trust. On July 17,
2018, the Independent Financial Commission of Inquiry (Commission) was established.
The Commission had a mandate to assess and advise on past accounting practices and
the budgetary position of the Province relative to the one presented in the 2018 Budget.
The final report of the Commission was delivered to the Attorney General and Minister of
Finance on August 30, 2018. The Public Accounts of Ontario 2017–2018 are informed by
the Commission’s recommendations. As part of this report, we are accepting the
recommendations from those experts and have adjusted the 2017–18 Public Accounts to
reflect that advice.
The challenges we have inherited from the previous government are significant. However,
Ontario’s Government for the People has, and will continue to, put our province back on
the path to fiscal health and economic growth. We are collaborating with ministries and
stakeholders across the broader public sector to harness the power of innovation, find
efficiencies, and ensure our province remains competitive. We will continue to be open,
honest and transparent about the state of Ontario’s finances as we work to ensure that
every tax dollar spent achieves the best value for the people of Ontario.
Financial Statement Discussion and Analysis, 2017–2018 iii
The work will be difficult but the proper management of public finances is a moral
imperative. It is our duty and our legacy to achieve structural balance and a more
sustainable government, for the people.

Original signed by

The Honourable Peter Bethlenfalvy
President of the Treasury Board

iv Financial Statement Discussion and Analysis, 2017–2018
Introduction
The Annual Report is a key element of the Public Accounts of the Province of Ontario and
is central to demonstrating the Province’s transparency and accountability in reporting its
financial activities and position. Ontario’s Consolidated Financial Statements present the
financial results for the 2017–18 fiscal year against the 2017 Budget released in
April 2017, and the financial position of the government as at March 31, 2018. As in
previous years, the Annual Report also compares the current year’s results to the prior
year’s results and provides a five-year trend analysis for a number of key financial ratios.
Producing the Public Accounts of Ontario requires the teamwork and collaboration of many
stakeholders across Ontario’s public sector. The Office of the Auditor General plays a
critical role in auditing and reporting on the Province’s financial statements, and the
Standing Committee on the Public Accounts also plays an important role in providing
legislative oversight and guidance. I would like to thank everyone for their contributions.
We welcome your comments on the Public Accounts. Please share your thoughts by email
at [email protected], or by writing to the Office of the Provincial Controller,
Re: Annual Report, Treasury Board Secretariat, Second Floor, Frost Building South,
7 Queen’s Park Crescent, Toronto, Ontario M7A 1Y7.

Original signed by

Nancy Kennedy
Deputy Minister, Treasury Board Secretariat
and Secretary of Treasury Board and
Management Board of Cabinet

Financial Statement Discussion and Analysis, 2017–2018 1
Guide to the Public Accounts
The Public Accounts of the Province of Ontario comprise this Annual Report and three
supporting volumes.
The Annual Report includes a Financial Statement Discussion and Analysis,
the Consolidated Financial Statements of the Province and other supporting schedules
and disclosures.
Financial Statement Discussion and Analysis
The first section of the Annual Report is the Financial Statement Discussion and Analysis
section, which:
 Compares the Province’s financial results to both the 2017 Budget and results for
the previous year;
 Shows trends in key financial items and indicators of financial condition;
 Sets out key potential risks to financial results and strategies used to manage them;
 Includes descriptions of various assets and liabilities on the statement of financial
position; and
 Presents non-financial activities results and discusses important initiatives related
to enhancing transparency and accountability.
The Consolidated Financial Statements
The Consolidated Financial Statements show the Province’s financial position at the end of
the previous fiscal year, its financial activities during the reporting period and its financial
position at the end of the fiscal year. The statements are linked, and figures that appear in
one statement may affect another.
The Province’s financial statements are presented on a consolidated basis, meaning that
the Province’s statement of financial position and statement of operations reflect the
combination of ministry results as well as financial results for entities that are controlled by
the government (see Note 1 to the Consolidated Financial Statements for more details).
Therefore, reported revenues and expenses of the Province can be affected directly by the
activities of ministries as well as the performance of controlled entities such as government
business enterprises (GBEs) and broader public sector (BPS) organizations, i.e., hospitals,
school boards and colleges. In addition, the Province’s results are also affected by transfer
payments made to non-consolidated entities, such as municipalities and universities.
2 Financial Statement Discussion and Analysis, 2017–2018