using performance data to inform budgeting at the subnational level: the ontario experience by greg...

The Ontario Perspective Using Performance Data to Inform Budgeting at the Subnational Level

10th Annual Meeting of the OECD Senior Budget Officials Performance And Results Network

Greg Orencsak Deputy Minister, Treasury Board Secretary of Treasury Board and Management Board of Cabinet Ontario, Canada

November 24, 2014

Population | 13.5 million Languages | one official, over 200 spoken Size | over one million square km

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About Ontario

• Defense & Foreign Affairs

• Employment Insurance

• Criminal Law

• Trade & Commerce

• Taxation (Direct & Indirect)

Key Federal Responsibilities

• Health

• Education

• Social Services

• Administration of Justice

• Local Government

• Property & Civil Rights

• Taxation (Direct)

Key Provincial Responsibilities

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• Immigration

• Agriculture

• Energy

• Pensions

• Environment

Concurrent Responsibilities

Jurisdictional Arrangements in Canada

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Ontario’s Composition of Revenue: 2014-15

Source: 2014 Ontario Economic Outlook and Fiscal Review

Personal Income Tax

$29.1B 25%

Federal Transfers $21.9B

18%

Income from Government Enterprise

$5B 4%

Other Non-Tax Revenue

$8.6B 7%

Sales Tax $21.9B

18%

Other Taxes $22B 19%

Corporate Tax $9.9B

8%

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18%

14% 14% 26%

16%

19% 15%

34% 35%

39%

Source: Provincial Budgets and Updates

Federal Transfers as a Percentage of Revenue

British Columbia

Alberta

Saskatchewan Manitoba

Ontario

Québec

New Brunswick

Newfoundland

Prince Edward Island

Nova Scotia

Presenter

Presentation Notes

Federal government collects 51% of tax revenue Federal transfers as a percent of revenue NL: 15% PEI: 39% NS: 34% NB: 35% QC: 19% ON: 18% MB: 26% SK: 14% AB: 14% BC: 16% Source: Provincial Budgets and Updates

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Budget Legislation in Provinces

Most provinces have legislation seeking to achieve or maintain balanced budgets. They tend to be principles-based rather than rules-based.

Presenter

Presentation Notes

Provinces with balanced budget legislation: NS, NB, QC, ON, MB, SK, AB, BC (Feds have announced intention to introduce balanced budget legislation, but haven’t done so yet) During the recent economic downturn, many of the more prescriptive provincial balanced budget acts were amended or had certain sections suspended to permit their governments to run deficits (e.g. BC, AB, MB)

Budget Practices Comparison: FISCAL RULES

0

25

50

75

100

No Rules Revenues Expenditures BudgetBalance

Debt

Percentage of Canadian Jurisdictions and OECD Member States with Fiscal Rules for Specified Planning Variables

Canada OECD

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Per cent

Source: L’Observatoire de l’administration publique, Fiscal Governance in Canada: A Comparison of the Budget Practices and Processes of the Federal Government and the Governments of the Provinces and Territories (2011)

Budget Practices Comparison: PERFORMANCE TARGETS

0

25

50

75

100

Canada OECD

Share of Canadian Jurisdictions and OECD Member States By Proportion of Ministries and Agencies that

Use Performance Targets

0% 1% to 40% 41% to 60% 61% to 80% 81% to 100%8

Per cent

Source: L’Observatoire de l’administration publique, Fiscal Governance in Canada: A Comparison of the Budget Practices and Processes of the Federal Government and the Governments of the Provinces and Territories (2011)

Provincial Planning Experience

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“Results-based Planning” guides all Ontario ministries in the development of multi-year plans to meet expense targets.

Broader Reviews

Ontario supplements its annual planning process with a combination of broad and targeted reviews to help inform budgeting decisions.

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Presenter

Presentation Notes

2012 Commission on the Reform of Ontario's Public Services Ontario is moving forward with the commission that will provide advice on how to deliver the most efficient and effective public services possible for people and families. Building on reforms already underway, the commission is examining the way government delivers services to people, including the following: Programs that are no longer serving their intended purpose and could be eliminated or redesigned; Areas of overlap and duplication that could be eliminated to save taxpayer dollars; and Areas of value in the public sector that could provide a greater return on the investment made by taxpayers. The commission will report to the Minister of Finance in time to inform the development of the 2012 Budget. It will not make recommendations that would increase taxes or lead to the privatization of health care or education. The Premier’s Advisory Council on Government Assets will examine how to get the most out of key government assets to generate better returns and revenues for Ontarians. The Council will report directly to the Premier of Ontario and be supported by existing resources within the government. The Council has been given a mandate to maximize the value of these GBEs to the Province, including such measures as efficient governance, growth strategies, corporate reorganization, mergers, acquisitions and public‐private partnerships. The Council will give preference to continued government ownership of all core strategic assets. The government is committed to strengthening the accountability, financial management, and transparency of its business enterprises. The Council will report to the Premier on the LCBO, Hydro One and OPG, by the end of 2014 in order to feed into the 2015 Budget process. We are introducing a new annual program review savings target of $250 million for 2014–15 and $500 million for each of the next two years. This target will focus on maintaining or enhancing the delivery of public services while reducing costs that are not essential to delivering services.

RESULTS: Patient- and Activity-Based Hospital Funding

Global Budgeting for Hospitals

• Provider-centred system • Fixed annual funding • Based on historic funding

levels • No link between actual

costs and allocations • Not based on volume and

types of services delivered

• Not linked to outcomes (i.e. improved performance / increased efficiencies)

Activity-based Funding Model for Hospitals and Community Care Access Centres

• Patient-centred system • Funding based on volume

and types of services delivered

• Evidence and demographic information used to better reflect needs of patients

• Shifts resources to where they are most needed

• Helps drive better patient outcomes

• Directs funding to efficient providers 11

RESULTS: Postsecondary Strategic Mandate Agreements

Recent Postsecondary Education System

• Rapid enrolment growth • Tuition fee increases of

about 5% annually • Institutions expand programs

with little regard for duplication

• Unsustainable cost structures; over-reliance on enrolment growth and tuition fee increases

• Quality of learning experience at risk

• Limited accountability

Differentiated Postsecondary Education System

• Slower enrolment growth • Tuition fee increases capped

at 3% • Institutions focus on unique

strengths; avoid unnecessary duplication

• More efficient and financially sustainable system

• Improved quality of learning experience

• Improved transparency and accountability with measurable results

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RESULTS: Children’s Mandatory Immunizations

Un-coordinated Immunization Records Tracking

• 8 publicly-funded vaccines in 2003

• Public Health Units receive immunization lists directly from schools and school boards

• Processes vary across organizations, resulting in errors and duplications

Modernized Immunization Program

• Immunization records now linked to Ontario Education Number

• Improved accuracy and efficiency in collecting and recording immunization information

• Uses evidence to identify new mandatory immunizations and dose requirements

• 21 publicly-funded vaccines, saving parents $2500 per child

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Program Review, Renewal and Transformation

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Ontario is launching a new approach to multi-year planning and budgeting, called Program Review, Renewal and Transformation.

Program Assessment and Measurement Framework

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Third Party Advice and Innovation

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Source: Better Outcomes For Public Services, Mowat Centre, 2014

Summary Observations

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• Strong linkages to government priorities • End-to-end partnerships are key

• Public servants and elected officials • Funders and delivery organizations

• Evidence matters • No one has all the right answers

Contact

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Greg Orencsak Deputy Minister, Treasury Board Secretary of Treasury Board and Management Board of Cabinet Government of Ontario, Canada

[email protected]

using performance data to inform budgeting at the subnational level: the ontario experience by greg...

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