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The Consolidated Financial Statements Treasury Board Secretariat PUBLIC ACCOUNTS OF ONTARIO Annual Report and Consolidated Please address your comments on this report to: Financial Statements The Honourable Liz Sandals President of the Treasury Board Room 4320, Fourth Floor, Whitney Block 2015-2016 99 Wellesley Street West Toronto, Ontario M7A 1W3 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, 2016 ISSN 0381-2375 (Print) ISSN 1913-5556 (Online) Treasury Board Secretariat PUBLIC ACCOUNTS OF ONTARIO Annual Report and Consolidated Financial Statements 2015-2016 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.: 416-327-2333 Telephone: 416-325-0400 Toronto (Ontario) M7A 1W3 Téléphone: 416-325-0400 Fax: 416-327-3790 Facsimile: 416-325-0374 Tél. : 416 327-2333 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, 2016, in accordance with the requirements of the Financial Administration Act. Respectfully submitted, Original signed by Original signed by The Honourable Liz Sandals The Honourable Charles Sousa President of the Treasury Board Minister of Finance Toronto, October 2016 Toronto, October 2016 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 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS Highlights ............................................................................................................................... 9 Analysis of 2015–16 Results ................................................................................................12 Revenue ...........................................................................................................................12 Expense ............................................................................................................................17 Statement of Financial Position analysis ...........................................................................23 Infrastructure expenditures ...............................................................................................26 Liabilities ...........................................................................................................................27 Risks and risk management ..............................................................................................29 Key Financial Ratios .............................................................................................................31 Responsible Fiscal Management .........................................................................................34 Non-Financial Activities .......................................................................................................37 Health care .......................................................................................................................37 Education ..........................................................................................................................38 Post-secondary education and training .............................................................................38 Condition of provincial tangible capital assets ...................................................................38 Transparency and Accountability........................................................................................40 Recent developments in public sector accounting standards ............................................40 The C.D. Howe Institute Fiscal Accountability Report .......................................................40 Trillium Trust .....................................................................................................................41 Data visualization ..............................................................................................................41 Financial Statement Discussion and Analysis, 2015–2016 i CONSOLIDATED FINANCIAL STATEMENTS Auditor’s Report ..................................................................................................................... 45 Consolidated Statement of Operations ................................................................................... 47 Consolidated Statement of Financial Position ........................................................................ 48 Consolidated Statement of Change in Net Debt ..................................................................... 49 Consolidated Statement of Change in Accumulated Deficit .................................................... 50 Consolidated Statement of Cash Flow ................................................................................... 51 Notes to the Consolidated Financial Statements .................................................................... 52 Schedules to the Consolidated Financial Statements ............................................................. 87 Glossary............................................................................................................................... 106 Sources of Additional Information ........................................................................................ 112 ii Financial Statement Discussion and Analysis, 2015–2016 Foreword Each year, the Province releases the Public Accounts to update Ontarians on our end-of- year financial position. The Annual Report that accompanies the financial statements provides transparency and accountability for the dollars we spend. Ontario is a recognized leader in financial reporting. The C.D. Howe Institute, an independent research organization that focuses on support for economically sound public policy practices, has acknowledged the consistent basis used by Ontario for our Budget, Estimates and Public Accounts as a best practice for supporting transparency and accountability. I am pleased to present the Public Accounts for the year 2015–16, which confirm that our government’s plan to achieve fiscal balance by 2017–18 is working. At $5.0 billion, Ontario’s deficit is $3.5 billion lower than projected in the 2015 Budget. This marks the seventh year in a row that Ontario has beaten its deficit target. When the global economic recession hit, our government made a deliberate choice to invest in our economy and stimulate growth. Since then, Ontario has created almost 600,000 net new jobs and the unemployment rate declined to an eight-year low of 6.4 per cent in July 2016. Ontario’s economy continues to grow and is expected to remain one of the fastest growing in Canada over the next two years. Although we have made considerable progress since the recession, there is still hard work ahead to eliminate the deficit. Our government will make the tough but necessary decisions needed to ensure our province continues to grow. As President of the Treasury Board, it is my role to lead this effort and to help create a modern and open government — one that is fiscally responsible, uses evidence to track performance and is focused on results. In the spirit of openness and increased transparency, this year we have created new visualization tools to help Ontarians understand the Province’s finances. To access these new tools, and to see the full Public Accounts online, visit Ontario.ca/publicaccounts. Making every dollar count In 2014, we implemented a new fiscal planning and expenditure management approach. Through the Program Review, Renewal, and Transformation (PRRT) process, we are looking across ministries to achieve better value for money. We have deliberately taken a fair and equitable approach, allowing us to continue to make strategic investments in physical infrastructure such as roads and transit, as well as in social capital through the talents and skills of Ontarians, all while protecting the services on which Ontarians rely. By prioritizing cross-ministry collaboration in our planning and policy development, we are undertaking major transformation
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