: Toward 2025: Assessing Ontario's Long-Term Outlook

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Province of Ontario
Ministry of Finance

Why the Ontario Government is Releasing this Report

  • To inform and inspire public debate about the long-term issues facing Ontario.
  • To support the public debate with reliable information and relevant analysis.
  • To advance the principles of transparency in decision-making and accountability with Ontarians.
  • To fulfill the requirements of the Fiscal Transparency and Accountability Act, 2004.


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Ontario will see continued economic growth as a result of its diverse and adaptable economy, and its growing and highly-educated population.

A bar chart showing the Ontario Real GDP per cent average annual growth from 1956-65 projected to 2016-25.


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Ontario is on course for balanced budgets in the medium term. Maintaining these over the longer term will require fiscal discipline

A bar chart showing the Ontario projected fiscal balance from 1981-82 projected to 2024-45.


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Ontario will continue benefiting from productivity growth, which is fundamental to maintaining strong economic growth.

A Line graph showing the Real GDP per capita in thousands of constant 1997 dollars from 1981 projected to 2025.


Summary: Demographic Projections and Implications

  • Slower but still robust population growth of 3.1 million.
  • Population growth driven largely by immigration; increasing diversity.
  • Shift to older age structure to accelerate with a rapid rise in share of seniors.
  • Growth in the core working-age population (ages 15-64) to slow down significantly.
  • Population growth concentrated in the GTA.


Summary: Long-Term Projection of Ontario's Economic Growth

  • The outlook is for continued real economic growth.
  • Long-run rate of economic growth depends on growth in labour supply (largely determined by demographics) and productivity.
  • Productivity growth depends on improving technology and investment in human and physical capital.
  • Although real GDP growth is expected to slow, real GDP per person is expected to increase, leading to improving living standards.


Summary: Strengthening Productivity Growth

  • Apart from labour force growth, strengthening productivity is the only way for economy to grow.

  • The factors for increasing productivity growth and for investment and job creation include:

    • A skilled and adaptable workforce
    • Business investment which enables effective competition;
    • Innovation and Research & Development;
    • Good infrastructure; and
    • Competitive taxation.


Summary: Drivers of Future Health Care Costs

  • Health care represents the most significant fiscal challenge for Ontario over the next twenty years.
  • Key health care cost drivers include: population aging, population growth and utilization (e.g. costs generated by new treatments).
  • Health care's share of provincial program spending could rise to about 55% in 2024-25 from 45% in 2004-05.
  • Health care spending projected to rise at an annual average rate of 6% between 2009-2010 to 2024-25, compared to 4.8% for GDP.


Summary: Intergovernmental Finances

  • Federal transfers are projected to drop from 16% of Ontario's total revenues to 13.5% by 2024-25.
  • Federal transfers for health, postsecondary education and social programs are projected to decline from 24% in 2005-06 to 18% in 2024-25 as a share of Ontario program spending.
  • Municipalities have an important and growing role in the economic future of the province and will face ongoing pressure, particularly for improvements in infrastructure.


Summary: Ontario's Long-Term Fiscal Prospects

  • Having balanced the Budget in 2008-09, the province would be on course for a series of small surpluses in the following decade.
  • After 2018, there is a likelihood of returning to a deficit due largely to health care spending growing faster than revenue.
  • Deficits would remain small enough that the debt to GDP ratio would be on a downward trend, leading to a decline in the share of debt interest.
 

Ontario's Fiscal Cycle

 

Ontario's Economy

 

Borrowing & Debt (OFA)

 

Ontario's Tax System

 

Demographics

 

Forms and Publications

 

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Popular Topics

 

Contacts

 

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Additional Resources

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