Provincial Public Finance

1. Principal areas of revenue
1. Tax vs. non-tax
2. Reasons for variation

2. Principal areas of expenditure
1. Changes over time
2. Accountability

3. Federalism and finance

Federal Transfers – conditional and unconditional; federal standards and provincial autonomy

Income tax collection and federal government – Ontario’s personal income tax is collected by the federal government, therefore is calculated on federally determined base (but some tax expenditures varied by Ontario)

4. Fiscal policy – balance, deficit, surplus

5. Public debt

What proportion of operating expenditures?

What proportion of gross provincial product?

6. Operating vs. Capital

7. Tax Expenditures

    Tax Expenditures – use of tax system to encourage behaviour by forgoing tax on items that would otherwise be taxable 

8. Post-audit

1. Post-audit – a Budget is a plan for expenditures and revenues; the Public Accounts indicate to what extent the plan has been successful
2. Public Accounts Committee of Legislature
3. Provincial Auditor

                                                               i.      Probity

                                                            ii.      Value for Money

9. Limits to flexibility

        i. Public Opinion ii. Balanced Budget Legislation iii. Tax Approval Legislation

        iv. Downward inelasticity of demand for some public services

        v. Importance of wages as a cost of public services; lack of opportunity for productivity improvements

        vi. Public Accounts Committee vii. Provincial Auditor

The fiscal plan of the last budget of the current government can be found at the Government of Ontario web site, Ministry of Finance www.fin.gov.on.ca/english/budget/ontariobudgets/2006

Budgets of previous years can also be found through that site.