Commission on the Reform of Ontario's Public Services

Revenues and Expenditures: How Ontario Compares
It is always instructive –– and sometimes surprising –– to compare ourselves with
other provinces.
Ontario’s provincial government, for example, takes relatively less from its economy than
almost all other provinces. From 1981 through 2006, for example, Ontario’s total revenues
were the lowest in Canada, ranging in a narrow band between 14.5 per cent and 16.6 per cent
of GDP; from 2007 to 2009, Alberta fell below Ontario, with an average take of 14.3 per cent,
while Ontario was second lowest with an average of 16.3 per cent. 6 Quebec, Manitoba and the
four Atlantic provinces, in the most recent data, have generated the largest revenues ––
between 23 per cent and 33 per cent of GDP.
In broad terms, there are two sources of revenue for a provincial government: transfers from
the federal government and the revenues it can raise on its own, mainly by taxing people,
companies and retail sales. For the poorer provinces, transfers from the federal government
have historically been an important source of revenue, averaging about 36 per cent to 43 per
cent of revenue in the Atlantic provinces in the latest decade for which there are data (2000
through 2009). In Ontario, transfers accounted for 14.8 per cent of revenues during this period,
though the recent trend is rising. Traditionally, Alberta’s reliance on federal transfers has been
the lowest of any province, with Ontario and British Columbia jostling for the second-lowest
spot. In 2009, however, Ontario received 18.7 per cent of its revenues from Ottawa, 7 which
put it third from the bottom; below it were Alberta (13.8 per cent) and British Columbia
(17.6 per cent).
6 These figures are based on the Provincial Economic Accounts compiled by Statistics Canada. The latest data for governments are
from 2009.
7 The figure of 20 per cent cited in Chapter 1, The Need for Strong Fiscal Action, was based on the Ontario public accounts measure.
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