Ford government disputes report on unspent pandemic funds

The Ford government is pushing back on a report from a left-leaning think tank that found it's sitting on money that could be used to battle the pandemic.

It's an accusation that has dogged the province for months, thanks to an unusual budgeting decision the province made when the pandemic shook its fiscal outlook. Early in the fiscal year, the government socked away more than $13 billion into contingency funds that could be used to respond to unanticipated needs arising from COVID-19. According to the government, $2.6 billion remained unspoken for as of the November budget and some of the remainder will go to the Small Business Support Grant that opened for applications earlier this month.

However, the Canadian Centre for Policy Alternatives released a report earlier this week on how the cost of pandemic-related relief was split between the federal government and the provinces. It found 94 per cent of the spending on direct COVID-19 measures in Ontario came from the federal government. On health care, it found that pandemic spending totalled $1,180 a person, with only $160 on the provincial tab and the rest borne by the federal government. It found pandemic spending related to child care and education totalled $100 a person, with only $20 of that on the provincial tab.

Overall, it found Ontario lagged behind other provinces in pandemic spending — with B.C. spending nearly three times as much per capita.

But the conclusion that the premier's office and the finance minister disputed is that Ontario still has $6.4 billion in unallocated contingency funds that could be used in the fight against COVID-19.

This analysis is based on an FAO report that looked at spending up until September and didn’t include the budget that was delivered in November. Any suggestion that Ontario is “sitting” on COVID-19 contingency funding is totally false. https://t.co/2OMxudv3bk

— Ivana Yelich (@yelich_ivana) January 26, 2021

A statement from the finance minister's office said the report relied "on months-old data" and the $6.4 billion figure is "patently false, presenting a gross mischaracterization of reality."

"Budget 2020 clearly shows that, as of November, dedicated COVID-19 Health Contingency Fund and the Support for People and Jobs Fund was $2.6 billion, significantly lower than the alleged $6.4 billion figure touted by this group," said Sebastian Skamski, press secretary to Finance Minister Peter Bethlenfalvy.

"As that time, 80 per cent of dedicated COVID-19 contingency funds were committed with nearly five months remaining in the fiscal year. In fact, since being accounted for in Budget 2020, portions of the $2.6 billion in contingency funds have been used to support the Ontario Small Business Support Grant and money has been made available to cover property tax and energy cost rebates to help eligible businesses."

Another update will come when the province releases its third-quarter finances report, due by Feb. 15.

The report's author, David Macdonald, told QP Briefing his analysis is up to date as of Dec. 31, 2020. While he did draw on the reports from earlier in the year, including the Nov. budget, he used all of the information the province had made available as of the end of the calendar year.

Macdonald said he believes the discrepancy comes because he included the province's plans to create a $4 billion pandemic fund for the fiscal year that begins Apr. 1, 2021, which he defined as pandemic funds that have not been spent. But he noted he did not include other funds the province could have used for pandemic needs because they weren't explicitly earmarked as COVID-related — in particular, a $3 billion standard contingency fund that the province said could be tapped "in cases where health and safety may be compromised."

According to the budget, if that $3 billion is spent this year, it will go to reducing the deficit.

Based on Macdonald's calculations, the CCPA published a blog post concluding that "Queen’s Park is still holding back funds that could save lives."

While the Finance Minister's office disputed the figure for the uncommitted contingency funds, it didn't dispute the overall conclusion that Ontario's pandemic spending came mostly from the federal government and that the provincial share was comparatively less than some other large provinces.

Excluding federal transfers, Ontario spent just over 1 per cent of its GDP on pandemic measures, behind British Columbia — at nearly 3 per cent — and Manitoba, Quebec, Saskatchewan and Nova Scotia, and nearly tied with Alberta. PEI, Newfoundland and Labrador, and New Brunswick spent less, proportionally.

Those figures are important because they highlight how much of a province's capacity to spend is being put toward fighting COVID-19, said Macdonald. He compared Ontario to B.C., where individuals and businesses are receiving more direct support.

On average, British Columbia's pandemic measures total $10,544 per person, $1,669 of which is provincial funds, compared to $9,845 in Ontario, $612 of which is provincial funds. Considering only provincial dollars, Ontario spent the lowest per person on pandemic measures in all provinces, excluding the Maritimes.