Mandate letter progress: Finance
The Minister’s response letter to Premier Wynne, outlining the results achieved on key mandate priorities in 2014-15.
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January 11, 2016
The Honourable Kathleen Wynne
Premier of Ontario
Room 281, Main Legislative Building
The Ministry of Finance is making solid progress on the priorities spelled out in my ministry’s mandate letter. Working with the Treasury Board Secretariat, we are taking deliberate steps to exceed our deficit reduction targets and balance the budget in 2017-18, while continuing to make the investments needed to strengthen Ontario’s economy.
We have put forward a positive plan to achieve greater prosperity for Ontarians. Since receiving your mandate letter, we have focused on the following key priorities:
Managing Ontario’s Revenues and Expenses and the Province’s Borrowing Program
- Reduced the deficit to $10.3 billion in 2014-15, an improvement of $2.2 billion compared with the 2014 Budget projection.
- Outlined a plan in the 2015 Budget to eliminate the deficit that centres on program review, renewal and transformation, managing compensation costs, addressing the underground economy and maintaining tax fairness, as well as sound financial management and fiscal accountability.
- Forecasted revised deficits in the 2015 Ontario Economic Outlook and Fiscal Review to $7.5 billion in 2015-16, $4.5 billion in 2016-17, and balance in 2017-18.
- Achieved several net-zero compensation agreements with public sector unions.
- Increased revenue by $225 million over what was reported in the 2015 Budget by combatting the underground economy and tax avoidance activities.
- Completed $21.9 billion of $30.1 billion of the 2015-16 provincial long-term borrowing requirement as of December 10, 2015, as part of a strategy to consistently keep interest-on-debt costs below budget projections.
Maintaining a Modern and Affordable Financial System
- Completed the credit union review and launched reviews of key aspects of the financial services system, including the following major regulatory agencies: the Financial Services Commission of Ontario, the Financial Services Tribunal and the Deposit Insurance Corporation of Ontario.
- Announced the Capital Markets Regulatory Authority chair and published revised draft capital markets legislation for comment.
- Introduced auto insurance reforms that will help lower rates and increase consumer choice.
- Undertaking a review of the solvency funding framework applicable to defined benefit pension plans.
Optimizing Government Assets
- Amended the Liquor Control Act, struck a new framework agreement with The Beer Store and implemented new initiatives in Liquor Control Board of Ontario (LCBO) stores.
- Supported the Ministry of Energy on the Hydro One initial public offering (IPO).
- Driven by the Hydro One IPO, we anticipate that $2.7 billion in dedicated funds will be made available to the province in 2015-16 for strategic infrastructure investments — $1.1 billion over the 2015 Budget asset optimization target.
Building Retirement Security
- Passed the Pooled Registered Pension Plans Act, 2015, the Ontario Retirement Pension Plan (ORPP) Act, 2015 and the Ontario Retirement Pension Plan Administration Corporation Act, 2015.
- Announced key design elements of the ORPP related to plan comparability, phasing in of contribution rates and timing of stages of implementation, and minimum earnings threshold and eligibility age.
- Developing regulatory frameworks for target benefit multi-employer pension plans and conversion of single-employer pension plans to jointly sponsored pension plans.
Supporting a Dynamic Business Climate
- Maintained a competitive tax environment to support long-term growth.
- Authorized 58 grocery stores to sell beer in December, following the new beer framework agreement and in a way that safeguards the LCBO’s central role as wholesaler, sustains government revenue, maintains Ontario’s high standards of social responsibility towards alcohol consumption, and enhances efficiency and consumer choice and convenience.
- Implemented tobacco reforms designed to address the sale of contraband tobacco, including overhauling oversight through legislative amendments.
- Made using electronic sales suppression devices an offence.
- Oversaw Ontario Lottery and Gaming’s modernization efforts, including the procurement and selection of gaming bundle operators, and launched the Horse Racing Integration Plan.
- Established a Sharing Economy Advisory Committee to harness opportunities in this emerging sector.
- Fostering growth in the financial services sector through measures such as partnering with the Toronto Financial Services Alliance and supporting the launch of an Ontario renminbi trading hub, as well as supporting government-wide sector strategies in mining, agri-food, advanced manufacturing and many others.
- Strengthened economic relationships through trips to China, Japan, New York City and Chicago.
Collaborating on Shared Responsibilities Across Government
- Created the Trillium Trust to support asset optimization and infrastructure.
- Supporting the Ministry of Environment and Climate Change in developing the policy and regulatory framework for the cap and trade program.
- Collaborating with the Ministry of Economic Development, Employment and Infrastructure and other ministries to develop the Business Growth Initiative and support the Jobs and Prosperity Fund.
- Working with other ministries to improve the administration and delivery of Ontario government benefits.
- Providing fiscal planning and economic policy to support initiatives across government and individual ministry allocations.
Working with Other Levels of Government
- As part of fund redesign, directed a larger share of the Ontario Municipal Partnership Fund to more fiscally challenged municipalities.
- Partnering with Québec to develop a series of economic roundtables, which will include leaders of the business communities from both provinces.
- Directly engaged with ministers and ministries of other jurisdictions in Canada to further shared priorities such as the Common Capital Markets Regulator and retirement income security.
- Collaborated with the federal government on common goals: infrastructure, retirement income security, climate change, jobs and the economy, Aboriginal and other partnerships, health care, and refugee relief and settlement.
In summary, we are continuing to work hard and achieve our commitments. Our entire team at the Ministry of Finance has made significant progress in implementing the plan laid out in Budgets 2014 and 2015. Together, we are building Ontario up, and the Ministry of Finance is proud to do its part.
Minister of Finance
|Mandate Letter Commitment||Progress to Date|
|Make fiscal discipline a priority, while continuing to make the investments needed to strengthen Ontario’s economy, support critical investments and protect public services for all Ontarians.|
|Work with the President of the Treasury Board to eliminate the deficit by 2017-18 through the effective management of Ontario’s revenue and expenditures and the province’s borrowing program.|
|Table an annual budget that aligns with the government’s fiscal objectives and key priorities.|
|Providing strong oversight of Ontario’s regulatory system for pensions, insurance, financial services and capital markets. Your goal is to ensure that the financial system is modern, affordable, protects investors and consumers, and supports economic growth.|
|Delivering on our commitment to reduce automobile insurance rates. You will continue to work with the Financial Services Commission of Ontario and stakeholders to drive the necessary regulatory reforms and fraud prevention measures to ensure that the auto insurance system is fair and affordable and that consumers are protected.|
|Working with the Attorney General to establish a Serious Fraud Unit, whose mandate will include addressing automobile insurance fraud.|
|Taking a leadership role in developing a co-operative capital markets regulatory system that will ensure consistent, fair and transparent rules for investors, issuers and other capital market participants. I ask that you continue to work with other provinces and the federal government to seek a national consensus on a single regime that also recognizes Toronto’s key role in the financial services sector.|
|Continuing to pursue pension reform that increases the sustainability of Ontario’s public-sector pension plans. Consult with the Minister of Energy and the Minister of Training, Colleges and Universities on pension reforms in the electricity and postsecondary education sectors. I ask that these reforms include moving toward an equal cost-sharing model, increased risk-sharing and the establishment of sector-wide strategies.|
|Continuing to review and provide advice and regulatory oversight related to privately and publicly held pensions. Your goal is to ensure the affordability and sustainability of these plans.|
|Advising the Premier’s Advisory Council on Government Assets on ways to maximize the value of Ontario Power Generation, Hydro One and the Liquor Control Board of Ontario (LCBO). You will engage with the public and stakeholders to communicate and implement the government’s decisions with respect to these assets.|
|Building a strong and secure retirement income system to ensure that Ontarians enjoy their retirement years. You will continue to seek an enhancement to the Canada Pension Plan, but also recognize the need to act now to provide greater retirement income security to Ontarians.|
|Working in partnership with the Associate Minister of Finance to develop the Ontario Retirement Pension Plan (ORPP) so that it can be implemented in January 2017. The goal of the pension plan is to support working people who do not already participate in a comparable workplace pension plan. It should be similar to the Canada Pension Plan and provide a predictable stream of income in retirement, require contributions to be shared equally between employees and employers — and target a replacement rate of 15 per cent, up to an annual earnings threshold of $90,000.|
|Consulting and collaborating with the Minister of Economic Development, Employment and Infrastructure, the Minister of Labour, the Attorney General and the President of the Treasury Board during the development of the ORPP. I ask that you —in partnership with the Associate Minister of Finance — update Cabinet on your progress during the implementation of this important file.|
|Maintaining and administering the tax system. You will need to balance the benefits of an internationally competitive tax system with the need to raise revenue to fund Ontario’s essential programs and services.|
|Continuing efforts to modernize Ontario’s tax system so that it supports key sectors of the economy appropriately and treats taxpayers fairly.|
|Ensuring taxes are collected efficiently and that minimal revenue is lost because of non-compliance or the underground economy. You will implement the raw-leaf tobacco reforms and take action on illegal tobacco sales, while working with partner ministers and First Nations to support First Nation economic development goals.|
|Providing oversight of Ontario revenue agencies, such as the LCBO and the Ontario Lottery and Gaming Corporation. You will maintain strong partnerships with these agencies to ensure that they embrace the government’s commitment to social responsibility.|
|Improving the province’s existing beer retailing system by reducing red tape and allowing new opportunities for retailing.|
|Providing advice to other ministries on fiscal planning and economic policy that supports effective budgetary and financial planning decisions.|
|Establishing dedicated and substantial funding for public transit and transportation infrastructure. You will work closely with the Minister of Transportation, the Minister of Economic Development, Employment and Infrastructure, and the Treasury Board Secretariat to establish and report on two dedicated funds and the Trillium Trust — which will make nearly $29 billion available over the next 10 years for investments in infrastructure projects across the province.|
|Maintaining strong partnerships with other orders of government.|
|Continuing to engage the federal government to make the case for equitable funding treatment for Ontarians. You will work to ensure the federal government preserves the integrity of our shared tax base and does not unilaterally impose measures that have a significant fiscal impact on Ontario.|
|Supporting Ontario’s relationship with municipalities. You will work with partner ministries to establish appropriate levels of funding support — recognizing that municipalities have benefitted from the uploading of services that has allowed them to remove these costs from the municipal property tax base.|