Commission on the Reform of Ontario's Public Services

Chapter 2: The Fiscal Challenge in Context
The biggest broad expense category is spending on goods and services, which includes
compensation for the public service. That amounted to an average of 8.7 per cent of GDP over
the latest 10-year period (compared with 10.3 per cent for all provinces) and 10.7 per cent in
2009 (12.0 per cent for all provinces). Transfers to local governments were the next biggest
expense, coming in at 3.3 per cent in the latest decade (3.1 per cent for all provinces) and
3.9 per cent in 2009 (3.5 per cent for all provinces). Transfers to persons, that is, social
services, amounted to 2.3 per cent in the latest decade (below the 2.6 per cent for all
provinces) and 2.7 per cent in 2009 (again below the 2.9 per cent for all provinces).
A separate Statistics Canada database 10 offers even more detail on provincial government
spending. In 2008–09, the latest year available in Financial Management System data, the
Ontario government’s total spending amounted to 17.8 per cent of GDP, the third lowest of all
provinces; the average for all provinces was 19.6 per cent. In the latest decade, from
1998–99 to 2008–09, spending grew by an average of 4.8 per cent annually, fourth lowest in
Canada and below the all-province average of 5.3 per cent.
This pattern is reflected in spending on the major provincial budget items, in comparisons that
are only possible from this source:
� Health spending was 6.9 per cent of GDP in Ontario, above the all-province average of
6.6 per cent. Ontario ranked sixth among the provinces for health spending;
� Spending on all education — primary, secondary, post-secondary and training — was
3.5 per cent of GDP, below the 3.9 per cent Canada-wide average. Ontario ranked sixth;
� Social services cost the government the equivalent of 2.9 per cent of GDP, less than the
3.3 per cent average. Ontario ranked sixth; and
� All other spending came to 4.5 per cent, compared with 5.8 per cent for all provinces.
Ontario ranked ninth.
10 The Financial Management System database is the most detailed source of comparable data for government finance. Statistics Canada
dismantles every government budget — federal, provincial and municipal — and reconstructs its revenue and spending on a common
grid, regardless of the accounting system used by each government. The result is a data set that is fully comparable, a huge advantage,
given that most governments use different accounting systems. The disadvantage is that the numbers come only with a lag; the latest data
go up to 2008–09.
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