Treasury Board Secretariat Public Accounts of Ontario Please address your comments on this report to: Annual Report The Honourable Peter Bethlenfalvy President of the Treasury Board Room 4320, Fourth Floor, Whitney Block and Consolidated 99 Wellesley Street West, Toronto, Ontario M7A 1W3 Financial Statements You can also send your comments to the Minister by electronic mail 2018–2019 to: [email protected] To access this document online, visit Ontario.ca/publicaccounts © Queen’s Printer for Ontario, 2019 | 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.: 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, 2019, in accordance with the requirements of the Financial Administration Act. Respectfully submitted, Original signed by Original signed by The Honourable Peter Bethlenfalvy The Honourable Rod A. Phillips President of the Treasury Board Minister of Finance Toronto, September 2019 Toronto, September 2019 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 2018–19 Results ................................................................................................. 12 Revenue ............................................................................................................................. 12 Expense .............................................................................................................................. 17 Statement of financial position analysis .............................................................................. 24 Infrastructure expenditures ................................................................................................. 27 Liabilities ............................................................................................................................. 28 Risks and risk management ............................................................................................... 30 Key Financial Ratios .............................................................................................................. 33 Fiscal Management ................................................................................................................ 35 Non-Financial Activities ......................................................................................................... 37 Health care ......................................................................................................................... 37 Education ............................................................................................................................ 38 Postsecondary and training ................................................................................................ 38 Children’s and social services ............................................................................................ 39 Justice ................................................................................................................................. 40 Condition of provincial tangible capital assets .................................................................... 41 Transparency and Accountability ......................................................................................... 43 Recent developments in public sector accounting standards ............................................. 43 The C.D. Howe Institute Fiscal Accountability Report ........................................................ 43 Financial Statement Discussion and Analysis, 2018–2019 i CONSOLIDATED FINANCIAL STATEMENTS Auditor’s Report ....................................................................................................................... 47 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 .............................................................. 91 Glossary ................................................................................................................................. 112 Sources of Additional Information .......................................................................................... 118 ii Financial Statement Discussion and Analysis, 2018–2019 Foreword I am pleased to present the Province of Ontario’s Public Accounts for 2018–19. Each year, the government releases the Public Accounts to give the people of Ontario a clear and transparent view into their province’s finances. Our government’s plan is focused on investing in front-line programs and services like health care and education, restoring trust in Ontario’s finances and making sure our province continues to be a great place to live, work and raise a family. This is our commitment that guides everything we do. From Windsor to Kenora, Ottawa to Moosonee, we are focused on building success today and prosperity for future generations. The Public Accounts of Ontario 2018-2019 demonstrate that we can respect taxpayer dollars and focus on things like our world class health care, education and transportation systems. While we continue to work to change the culture of government, we are investing in core programs and services. For example, this year we committed to invest a total of $18 billion in the hospital sector. When our government assumed office, we knew that restoring trust and accountability to the province’s finances while investing in vital services that the people of Ontario depend on was our top priority. We acted immediately and put a freeze on discretionary spending, curbing things that could be put on hold without putting service delivery at risk. In the months that followed, we have continued the hard work of ensuring public services are effective, efficient and sustainable for future generations by: Implementing measures to curb the “March Madness” — spending that governments typically see at the end of their fiscal year, as they attempt to use the remainder of their budgets — and saving $153 million in taxpayer dollars as a result of these and other expenditure management efforts; Removing fax and phone landlines across the Ontario Public Service; Creating an Independent Financial Commission of Inquiry to look into Ontario's past spending and accounting practices which concluded that the previous government left Ontario with a $15 billion deficit in 2018–19; Implementing a new Audit and Accountability Committee to add more scrutiny and accountability in government spending; Commissioning EY Canada’s line-by-line review and taking action to implement its recommendations to deliver value for money for the people of Ontario; Financial Statement Discussion and Analysis, 2018–2019 iii Initiating a cross-government Multi-Year Planning process to help us take stock of all available opportunities to build a more sustainable government, both now and in the future. Through these measures, we are tackling the deficit in a measured and responsible way. Our government