The Ontario government spent about $10 billion less last year than it planned to, resulting in a significantly lower deficit.

Those findings, in a new report from the province's Financial Accountability Office (FAO), have turned up the volume on opposition politicians' frequent refrain that the Doug Ford government was stingy in its pandemic response and should have spent more to save lives.

“While our loved ones suffered in long-term care, businesses struggled through painfully long lockdowns, and the province could not keep up with things like contract tracing, the Ford government was squirrelling away billions of dollars that they refused to invest to help Ontarians,” said NDP finance critic Catherine Fife, noting that the FAO found $1 billion in health-care funds went unspent, as did $368 million in funding for public health and $95 million for long-term care.

Liberal leader Steven Del Duca said much the same in a tweet, saying, "Lives and livelihoods could have been saved" and the money should have gone toward paid sick leave, nursing homes and the education system.

During a pandemic when we needed our government most, Doug Ford shortchanged Ontarians. Lives and livelihoods could have been saved.

Report: https://t.co/TNynbLL5Hg

1/2 #onpoli pic.twitter.com/AvGl8FNJA2

— Steven Del Duca (@StevenDelDuca) July 21, 2021

Financial Accountability Officer Peter Weltman offered a more nuanced view. Speaking with reporters on Wednesday, he wouldn't weigh in on whether or not the government should have spent more on its pandemic efforts but did emphasize the turmoil the pandemic caused for the province's finances: "Given the huge swings in growth, revenue, forecasts, expenditure requirements, ability to respond to the pandemic — it's been a crazy year-and-a-half — I think it's pretty tough at the best of times to forecast spending and revenue, but in this sort of environment, I think it's much, much harder."

At the outset of the 2020-21 fiscal year, the Ford government released its budget, forecasting a $38.5 billion deficit. The FAO now forecasts, based on unaudited figures, that it will be $29.3 billion. Over the course of the year, the province increased both its revenue and spending forecasts. It increased budgeted spending by $22.1 billion to $187.3 billion, but by the end of the year had spent $10.3 billion less — $177.0 billion, according to the unaudited figures used by the FAO.

That figure was the heart of the opposition criticism.

As ministries can't overspend their budgets, it's typical for governments to underspend by a small margin, said Weltman, but this year was an outlier, with 5.5 per cent of the budget left unspent.

But there was one area of the budget that wasn't underspent — and Weltman flagged it as "bizarre." The Ford government managed its finances last year by building huge contingency funds into the budget — one dedicated to the health sector response to the pandemic and the other dedicated to the economic response, together totalling over $11 billion. By the end of the year, both were at a zero balance.

"It's amazing how every last penny got spent, right to the zero, of those funds — be curious as to what the rationale was to get those down to zero," he commented.

The FAO report documented the transfers out of those funds in the fourth quarter. Some were clearly aligned with the stated purpose of the funds — such as allocations to the Ontario Small Business Support Grant from the Support for People and Jobs Fund — while others were less so.

For example, the remaining $229 million in the Health Sector Response Fund by the fourth quarter did not go to the Ministry of Health, but funds were transferred to other ministries — such as the Ministry of the Attorney General for programs such as Victim Crisis Assistance Ontario, which, while valuable, is not typically associated with the health-care sector. Both funds contributed to homelessness programs through the Ministry of Municipal Affairs and Housing.

The use of those funds had become political earlier in the year after the FAO's earlier reports highlighted what remained unspent in the funds as the year progressed — about $12 billion as the second wave began — sparking the same kind of outrage and allegations of stinginess from opposition politics and a promise from the finance minister that all of those funds would be spent by the end of the year.

That came to pass. However, the government didn't use all of its contingency funds. It beefed up its standard contingency fund through the year, initially budgeting $1.3 billion and beefing it up by another $4 billion throughout the year. As of the fourth quarter, $3.4 billion remained, contributing to lower deficit and debt.

While Weltman said the government's use of large contingency funds was appropriate for the pandemic, he said that wouldn't be the case in a regular year as the use of large reserves general limits transparency in government spending.

Weltman was asked by a journalist whether he could conclude if the government's priority was to adequately fund the pandemic response or to rein in the deficit, but he left that debate to the MPPs.

He did say that some people would likely read the report and wonder why the government didn't spend all of the additional funds it had authorized during the year.

"If you're inclined to think that the rationale was to reduce the deficit, then you might ask that type of question," he said. "And you might also look at it the other way, say, 'It was a crazy year, they really didn't know what they were getting themselves into and they did the best that they could.' So, where you stand I guess depends on where you sit. And that's probably as far down that road as I'll go."

In a statement, a spokesperson for Treasury Board President Prabmeet Sarkaria said the government has made "unprecedented and historic investments to protect the health-care system and support people and businesses across the province."

"In fact, the FAO himself states that overall spending increased by $21.3 billion or 13.7 per cent compared to the 2019-20 fiscal year as we continue our fight against the COVID-19 pandemic, said press secretary Sebastian Skamski.

However, the statement did not address specific questions about the province's use of the pandemic contingency funds.

Ford government spent $10.3 billion less than planned during the pandemic budget year: watchdog

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