Ontario Auditor General Finds Corporate Tax Estimates in Budget’s Three-Year Fiscal Plan Too Low and Contingency Funds Too Conservative

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TORONTO, May 2, 2022 /CNW/ – The Auditor General is required by the Tax Sustainability, Transparency and Accountability Act 2019 examine the multi-year budget plan in a Ontario budget before a provincial election. The multi-year fiscal plan presented in Ontario’s 2022 Budget presents a reasonable forecast of the province’s finances for the next three years, except that it underestimates corporate tax revenues. Moreover, it appears to be overly cautious about contingency funding, Auditor General Bonnie Lysyk said in a statement in her Review of the 2022 pre-election multi-year budget plan published today.

“In my view, the multi-year budget plan is a reasonable presentation of from Ontario finances for the years ending March 31, 2023, March 31, 2024 and March 31, 2025, except for understated estimates of provincial corporate tax revenues for each of the three years. Also, the contingency funds recorded in other program spending appear to be overly conservative,” Lysyk says in her official statement from the Auditor General.

Corporate tax revenue estimates are underestimated by $1.5 billion to $4.2 billion per year for the next three fiscal years. “Understating revenue can make the government look like it has less revenue when deciding on programs and initiatives or reducing the annual deficit,” Lysyk says.

Lysyk also notes that the 2022 budget, tabled April 28, includes overly conservative and higher than usual contingency funding for all three fiscal years. The $19.4 billion budgeted for contingencies in other program spending for the three years ending March 31, 2025 is more than double $7.5 billion in the 2021 Ontario Budgetthree-year financial plan for other program expenditures. (This excludes amounts budgeted for time-limited COVID-19 funding.) More than 80% of the $19.4 billion was not earmarked for specific programs, meaning more than $15 billion could be spent on unforeseen items without affecting the projected deficits that are budgeted for in the multi-year budget plan.

Due to recent legislative changes allowing for a later filing date for the 2022 Ontario Budgetconfidential information sharing agreements have been put in place by the Department of Finance to enable the Office of the Auditor General to plan, conduct and complete its work so that this report can be tabled in the Legislative Assembly before start of the election period.

The Auditor General is required by law to review the multi-year fiscal plan in an Ontario budget before a provincial election to ensure that governing parties are not making unreasonable projections that could influence voting results.

Read the report on
www.auditor.on.ca

https://twitter.com/OntarioAuditor @AuditorOntario

The Office of the Auditor General is an independent office of the Legislative Assembly that conducts value-for-money and financial audits of the provincial government, its departments and agencies. We also audit BPS organizations that receive provincial funding. Our vision is to provide exceptional value and assurance to Members of the Legislative Assembly, the Standing Committee on Public Accounts and all Ontarians through high quality work that promotes accountability, value for money and effective governance in Ontario’s public sector.

SOURCE Office of the Auditor General of Ontario

For further information: Bonnie Lysyk, Auditor General, (647) 267-9263

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