Sessional Paper

No. a/~

Parliament

e&JL-

public accounts

1979-80

volume 1 —financial statements

ONTARIO

PUBLISHED BY THE MINISTRY OF TREASURY AND ECONOMICS

CA20N TE

P71

public accounts

1979-80 volume 1 financial statements

ONTARIO

Ontario

PUBLISHED BY THE MINISTRY OF TREASURY AND ECONOMICS

Printed by J. C. Thatcher, Queen's Printer for Ontario

To The Honourable John Black Aird, O.C., Q.C., LL.D., B.A. Lieutenant Governor of the Province of Ontario

May It Please Your Honour:

The undersigned has the honour to present to Your Honour the Public Accounts of the Province of Ontario for the fiscal year ended March 31, 1980, in accordance with the requirements of The Ministry of Treasury and Economics Act, 1978.

Respectfully submitted,

>£Lt4KM^

Frank S. Miller

Treasurer of Ontario and Minister of Economics.

Toronto, September 30, 1980

iii

TREASURERS REPORT

It is with pleasure that I present the 1979-80 Public Accounts of the Province of Ontario for the fiscal year ended March 31, 1980.

To assist readers, the organization and content of the Public Accounts is described in A Guide to Public Accounts on page viii of this volume.

I would like to draw your attention to two particular improvements to this year's financial statements. My budget plan of April 1979 is included in the financial statements for comparison to the final results. Secondly, all transactions in respect to the flow-through financing to Ontario Hydro have been isolated to show more clearly the Province's own performance in relation to plan.

Comments or queries will be welcome and should be directed to the Financial Information and Accounting Policy Branch, Office of the Treasury, Ministry of Treasury and Economics.

Frank S. Miller

Treasurer of Ontario and Minister of Economics

Toronto, September 30, 1980

TABLE OF CONTENTS

Page

A Guide to Public Accounts viii

Section 1 Financial Statements

Summary of Significant Accounting Policies 1-2

Statement of Consolidated Revenue Fund 1-3

Statement of Budgetary Revenue 1-4

Statement of Budgetary Expenditure 1-5

Statement of Non-Budgetary Transactions 1-6

Statement of Debt Transactions 1-7

Statement of Ontario Hydro Transactions 1-7

Statement of Assets and Liabilities 1-8

Notes to the Financial Statements 1-9

Provincial Auditor's Opinion 1-13

Section 2 Schedules to Financial Statements

Statement of Budgetary Revenue

Details of Budgetary Revenue 2-3

Summary of Budgetary Revenue by Main Classification and Ministry 2-8

Statement of Budgetary Expenditure

Details of Budgetary Expenditure 2-10

Summary of Budgetary Expenditure by Standard Accounts Classification and Ministry 2-15

Statement of Non-Budgetary Transactions

Receipts 2-16

Disbursements 2-18

Credits 2-19

Charges 2-22

Statement of Debt Transactions

Proceeds of Loans 2-25

Retirements of Loans 2-26

Statement of Ontario Hydro Transactions 2-27

Statement of Assets and Liabilities

Cash, Temporary Investments and Marketable Securities 2-28

Advances to Ontario Hydro 2-28

Advances and Investments Other Corporations, Boards and Commissions 2-28

Investments in Water Treatment and Waste Control Facilities 2-30

Loans to Municipalities 2-30

Other Loans and Investments 2-31

Inactive Assets 2-32

Net Debt 2-32

Deposits with The Province of Ontario Savings Office 2-32

Pension Funds 2-32

Deposit, Trust and Reserve Accounts 2-33

Advances Payable 2-35

Treasury Bills 2-35

Debentures and Notes Summary 2-35

Details of Debentures and Notes Outstanding 2-37

Contingent Liabilities 2-42

Ten year Review

Consolidated Revenue Fund 2-48

Assets and Liabilities 2-49

Section 3 Miscellaneous Statements

Public Service Superannuation Fund 3-3

Legislative Assembly Retirement Allowances Account 3-5

vi

TABLE OF CONTENTS -Continued

Section 3 Miscellaneous Statements Continued Page

Superannuation Adjustment Fund 3-6

The Province of Ontario Savings Office 3-11

Motor Vehicle Accident Claims Fund 3-13

Wintario Proceeds 3-14

Provincial Lottery Trust Fund 3-14

The Financial Administration Act Losses 3-15

The Ministry of Revenue Act Remissions 3-15

Accounts Payable 3-16

Accounts Receivable 3-17

Section 4 Ministry Statements

Summary of Appropriations and Actual Expenditure 4-3

General Government

I Office of the Lieutenant Governor 4-5

II Office of The Premier 4-11

III Cabinet Office 4-17

IV Management Board of Cabinet 4-23

V Government Services 4-37

VI Intergovernmental Affairs 4-57

VII Northern Affairs 4-67

VIII Revenue 4-79

IX Treasury and Economics 4-95

X Office of The Assembly 4-111

XI Office of the Provincial Auditor 4-119

XII Office of the Ombudsman 4-125

Justice Policy Field

XIII Justice Policy 4-131

XIV Attorney General 4-137

XV Consumer and Commercial Relations 4-157

XVI Correctional Services 4-179

XVII Solicitor General 4-189

Resources Development Policy Field

XVIII Resources Development Policy 4-205

XIX Agriculture and Food 4-21 1

XX Energy 4-229

XXI Environment 4-245

XXII Housing 4-261

XXIII Industry and Tourism 4-281

XXIV Labour 4-297

XXV Natural Resources 4-317

XXVI Transportation and Communications 4-333

Social Development Policy Field

XXVII Social Development Policy 4-357

XXVIII Colleges and Universities 4-363

XXIX Community and Social Services 4-377

XXX Culture and Recreation 4-391

XXXI Education 4-409

XXXII Health 4-425

Index to Expenditure 4-439

vii

A GUIDE TO PUBLIC ACCOUNTS

Scope of the Public Accounts

The 1979-80 Public Accounts of the Province of Ontario comprise three volumes:

Volume 1 contains the financial statements of the Province and schedules of supporting information.

Volume 2, a supplementary volume, contains the financial statements of those provincial crown corporations,

boards and commissions in which the Province has an investment or which have borrowed from the Province

or from others with a guarantee by the Province. Also included are certain significant operational agencies

which are funded in whole or in part by revenues generated from their operations.

Volume 3, also a supplementary volume, contains the details of expenditures required by the Standing Public

Accounts Committee.

2. A Guide to Volume I of the Public Accounts

( 1 ) Financial Statements

The financial statements of the Province are presented on a comparative basis and rounded to millions of dollars. The financial statements and notes disclose in summary, the major financial activities of the Province in the fiscal period and report on the significant aspects of financial position at the close of the fiscal period. Also included in this section is a summary of the Province's significant accounting policies.

(2) Schedules to the Financial Statements

The schedules to the financial statements report in greater detail and to the nearest dollar the content of the various financial statements. Supplementary analyses of both budgetary revenue and budgetary expenditure are provided. Also included are complete details of direct debt obligations and contingent liabilities at the fiscal year end, and a ten year review of both the Consolidated Revenue Fund and the recorded assets and liabilities.

(3) Miscellaneous Statements

Statements of certain special purpose accounts and other supplementary financial data are provided in this section. The financial statements of The Province of Ontario Savings Office, a branch of the Ministry of Revenue, also appear in this section.

(4) Ministry Statements

A Government-wide tabular Summary of Appropriations and Actual Expenditure is provided as an introduction to this section on page 4-3. Individual ministry reports of financial activity are provided on pages 4-5 to 4-437. The following six separate statements are presented for each ministry as applicable.

(a) "Statement of Expenditure by Program"

This Statement provides an overview of the expenditures of each ministry. It shows, by ministry program and in total for the ministry, the amount of the current year's actual expenditures which is compared with the related appropriation for the current year and the previous year's actual expenditures. Ministry totals for budgetary expenditures and disbursements and charges are also shown.

(b) "Statement of Expenditure by Program and Activity"

This statement, prepared for each ministry program, is designed to show the activities comprising the program. The appropriation for each activity is analyzed according to funds appropriated through the Expenditure Estimates or approved by Management Board and the total is compared to the actual amount spent for the fiscal year. Statutory payments are reported separately. The "program description" narrative contained in the Expenditure Estimates is included with the statement to provide the reader with a general description of the program.

(c) "Details of Expenditure by Activity and Standard Accounts Classification"

This statement reports actual ministry expenditures for each program on the basis of the Standard Accounts Classification within each activity. Statutory Appropriations and Disbursements and Charges are not Standard Accounts. Amounts required for Statutory Appropriations and Disbursements and Charges are shown, where applicable, as separate entries under the Standard Accounts Classification details relating to each Activity.

viii

PUBLIC ACCOUNTS, 1979-80

The following is a brief outline of the types of budgetary expenditures included in each of the eight Standard Accounts comprising the Standard Accounts Classification:

Salaries and Wages

Includes salaries and wages, overtime and other remuneration paid to regular, probationary, unclas- sified and other staff; temporary help costs; indemnities and allowances paid to Members of the Legislative Assembly; and special allowances paid to public servants.

Employee Benefits

Includes the government's contribution as an employer to the Canada Pension Plan; the Public Service Superannuation Fund; the Unemployment Insurance Fund; the Workmen's Compensation Board; and other employee benefit plans.

Transportation and Communication

Includes travelling expenses of public servants on government business and recipients of government services, such as wards of the Province; relocation expenses of public servants who are transferred or recruited; expenses of moving office furniture and equipment; costs of transportation of goods other than for initial delivery; mailing costs, such as postage and registration; and communication costs, such as telephone, telegram, and data communications.

Services

Includes information services, such as, advertising provided by professional agencies and advertising placed directly with the media; rental and the purchase, repair and maintenance of machinery, equipment, buildings, land and engineering structures; data processing services; insurance premiums; and other professional and special services.

Supplies and Equipment

Includes provision for the purchase of all machinery and equipment; both new and used; and the

purchase of all materials, supplies and utilities.

Acquisition/Construction of Physical Assets

Includes all costs of acquisition and construction by contract of new and used buildings and engineering

structures; and the cost of acquisition of land.

Transfer Payments

Includes grants, subsidies, assistance to persons; the business sector; non-commercial institutions; and

other government bodies.

Other Transactions

Includes special transactions, such as Ontario Development Corporation Loan forgiveness and

Guarantees; and Municipal Taxes on A.R.D.A. owned property.

(d) "Statement of Budgetary Revenue"

This ministry statement reports on a comparative basis the fiscal year revenues analyzed by the thirteen standard revenue sources used in the Province's accounts. A more detailed analysis of amounts within the standard sources is provided where appropriate. All revenues are deposited to the Consolidated Revenue Fund and reporting by ministry denotes the revenue collection responsibility only.

(e) "Statement of Receipts"

This statement reports on a comparative basis the "receipts" which are the repayments of loans or recoveries of investments collected by the ministry. Reporting by a ministry generally denotes responsi- bility for the related loans, advances and investments made from the Consolidated Revenue Fund.

(f) "Statement of Credits"

This statement reports on a comparative basis the "credits" which are payments into deposit, trust and special purpose accounts received by the ministry. Reporting by a ministry generally denotes responsibility for the related trust administration account.

section 1

financial statements

1-2 PUBLIC ACCOUNTS, 1979-80

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

THE ACCOUNTING ENTITY

In the operation of its financial affairs the Province employs the concept of a Consolidated Revenue Fund, unique to the parliamentary system of government. The financial transactions of government ministries are recorded and displayed as Consolidated Revenue Fund cash inflows and outflows. With respect to the financial operations of provincial crown corporations, agencies, boards and commissions, the financial statements of the Consolidated Revenue Fund reflect only the extent to which their operations have been financed from or have contributed to the Fund for the year.

THE ACCOUNTING BASIS

The Province uses the cash basis of accounting for its financial transactions, modified to allow an additional thirty days to pay for goods and services pertaining to the fiscal year just ended. In this regard, payments to employees for the pay period which overlaps the fiscal year end date are apportioned between the two years. Cash inflows, on the other hand, are closed at March 31 for cash received or in transit. The cash basis of accounting, modified as described, is used to disclose to the the public the stewardship of the Government in regard to monies entrusted by appropriation, and raised through taxes and borrowing. Revenues and expenditures being unrelated in nature are matched only by timing of cash flow.

CLASSIFICATION OF TRANSACTIONS

The transactions of the Province are presented in summary form according to the four distinct areas of government activity through the Consolidated Revenue Fund.

"Budgetary Transactions" are operational activities which include the revenues raised through taxation, premiums, fees, licences and permits, payments from the federal government under shared-cost programs and income from investments. Expenditures on government programs include payments for goods and services, interest on the public debt, salaries, transfer payments to individuals, municipalities and institutions under various social programs, subsidies and grants, and the acquisition or creation of fixed assets.

"Non-Budgetary Transactions" are the lending, investment and trust administration functions which include, as distinct from expenditure, the government lending and investment activity in various crown corporations, agencies and municipalities. All of these loans and advances are repayable or represent equity holdings supported by the assets of the corporations. Also included in this category is the activity within deposit, trust and certain special purpose accounts. "Disbursements" is the term used to describe the lending and investment transactions of the government. "Receipts" consist of the repayment of loans or recovery of investments. "Credits" is the term used to describe payments into deposit, trust and special purpose accounts. Payments made from these same accounts are termed "Charges".

"Debt Transactions" are the borrowing and repayment transactions which include obligations issued to both non-public and public sources of funds.

"Ontario Hydro Transactions" relate to amounts borrowed by the Province on behalf of Ontario Hydro. The Province issues debentures and advances the proceeds to Ontario Hydro in exchange for bonds with the same terms and conditions. Since these transactions and the ensuing retirement and debt servicing costs are the result of a financing alternative and are not a part of the Province's own budget plan, they are classified separately.

ASSETS AND LIABILITIES

The assets and liabilities reported in the financial statements are financial claims which have been created by cash transactions. The assets are claims by the Consolidated Revenue Fund on other parties. The liabilities are claims by other parties on the Consolidated Revenue Fund.

Since expenditures on fixed assets do not represent financial claims on other parties and are not considered to differ from any other service to the public they are not reported as assets but are expensed as budgetary items in the year of acquisition.

Debentures, notes and treasury bills are recorded as liabilities at the face value of the debt instrument, and discount, premium and commission expenses are treated as current year budgetary transactions. The general resources of the Province are used for the continued orderly retirement of debt and no sinking funds are maintained for this purpose.

The contingent liabilities of the Province consist of guarantees by the Treasurer of Ontario of debt instruments issued by provincial agencies, boards and commissions and bank loans under certain government programs. Other significant legal commitments and liabilities are disclosed in notes to the financial statements.

The net debt of the Province is the excess of liabilities over recorded assets. It is also the accumulation of all budgetary deficits and surpluses since Confederation. The year-to-year change in net debt is the amount by which revenues exceed or are less than budgetary expenditures.

PUBLIC ACCOUNTS, 1979-80

1-3

STATEMENT OF CONSOLIDATED REVENUE FUND

for the year ended March 31, 1980 ($ millions)

Budget 1980

Actual 1980

Actual 1979

Opening Balance

Cash, temporary investments and

marketable securities

Budgetary Transactions

Revenue

Expenditure

Budgetary deficit

Non-Budgetary Transactions

Loans, Advances and Investments

Receipts

Disbursements

Net Decrease in Loans, Advances

and Investments

Trust Administration Functions

Credits

Charges

Net Increase in Trust Administration Functions

Non-Budgetary Transactions (net). . . .

Net Cash Requirements

Debt Transactions

Proceeds of Loans

Retirements of Loans

Debt Transactions (net)

Ontario Hydro Transactions

Proceeds of Debentures

Retirements of Debentures

Related Advances, Interest and Recoveries. Ontario Hydro Transactions (net)

Closing Balance

Cash, temporary investments and

marketable securities

13,446 15,105

14,214 15,346

(1,659)

1,295

300 86

214

(214)

1,020

(1,132)

12,322 13,913

1,133

750 83

667

(667)

548

(1,591!

444

391

420

329

351

378

42

115

40

515

641

491

124

133

122

391

506

508

548

369

411

(1,153)

(584)

(1,180)

1,580

1,567

1,763

285

434

111

1,652

1,569

1,020

See accompanying Summary of Significant Accounting Policies and Notes to the Financial Statements.

1-4

PUBLIC ACCOUNTS, 1979-80

STATEMENT OF BUDGETARY REVENUE

for the year ended March 31, 1980 ($ millions)

Taxation

Personal Income Tax

Retail Sales Tax (Note 10)

Corporations Tax

Gasoline Tax

Tobacco Tax

Motor Vehicle Fuel Tax

Mining Profits Tax

Land Transfer Tax

Succession Duty

Race Tracks Tax

Federal Government Income Tax Revenue Guarantees . Other

Budget

Actual

Actual

1980

1980

1979

2,971

3,184

2,735

2,295

2,414

1,717

1,335

1,616

1,278

607

610

539

292

274

258

122

128

94

50

100

42

92

95

67

35

47

63

49

51

46

5

44

9

3

23

7,862

8,522

6,906

Other Revenue

Premiums Ontario Health Insurance Plan. . Profits from Crown Corporations and Boards

Liquor Control Board of Ontario

Ontario Lottery Corporation

Ontario Energy Corporation (Note 3). . .

Vehicle registration fees

Liquor Licence Board fees

Other fees and licences

Fines and Penalties

Royalties

Utility Service Charges

Other

1,035

1,037

977

412

400

356

53

62

46

37

35

310

310

301

119

123

113

145

141

131

69

68

62

58

70

57

48

56

55

108

143

102

2,394

2,445

2,200

Government of Canada

Established Programs Financing

Cash Contribution

Extended Health Care Services

Canada Assistance Plan

Economic Stimulation (Note 10)

Adult Occupational Training Agreement.

Other

Interest on Loans, Advances and Investments. Total Budgetary Revenue

1,834

1,817

1,605

210

208

188

455

472

410

2

289

100

93

105

171

165

191

2,770

2,757

2,788

420

490

428

13,446

14,214

12,322

See accompanying Summary of Significant Accounting Policies and Notes to the Financial Statements.

PUBLIC ACCOUNTS, 1979-80

1-5

STATEMENT OF BUDGETARY EXPENDITURE

for the year ended March 31, 1980 IS millions)

Social Development Policy Field

Health

Education (Note 12)

Colleges and Universities

Community and Social Services.

Culture and Recreation

Social Development Policy

Resources Development Policy Field

Transportation and Communications.

Natural Resources

Housing

Agriculture and Food

Environment

Industry and Tourism

Labour

Energy

Resources Development Policy

Justice Policy Field

Solicitor General

Attorney General

Correctional Services

Consumer and Commercial Relations.

General Government

Intergovernmental Affairs (Note 12).

Government Services

Revenue

Treasury and Economics

Northern Affairs

Office of The Assembly

Other

Public Debt interest

Contingency Fund (Note 11)

Total Budgetary Expenditure

Budget

Actual

Actual

1980

1980

1979

4.183

4,269

3,955

2,515

2,563

2,391

1,430

1,446

1,371

1,318

1,342

1,228

189

202

207

2

2

2

9,637

9,824

9,154

1,134

1,139

1,069

261

280

246

227

196

167

178

159

174

130

135

122

65

68

60

40

41

34

15

11

10

4

3

3

2,054

2,032

1,885

175

186

168

149

157

140

131

137

130

64

68

63

519

548

501

547

685

510

272

329

253

195

194

194

223

150

21

141

137

125

19

20

22

22

19

18

1,419

1,534

1,143

1,388

1,408

1,230

88

15,105

15,346

13,913

See accompanying Summary of Significant Accounting Policies and Notes to the Financial Statements.

1-6

PUBLIC ACCOUNTS, 1979-80

STATEMENT OF NON-BUDGETARY TRANSACTIONS

for the year ended March 31, 1980 (S millions)

Budget 1980

Actual 1980

Actual 1979

Loans, Advances and Investments

Receipts

Corporations, boards and commissions

Ontario Energy Corporation

Ontario Mortgage Corporation

The Ontario Education Capital Aid Corporation

The Ontario Universities Capital Aid Corporation

Development Corporations

Ontario Housing Corporation

Other

Water treatment and waste control facilities

Loans to municipalities

Nuclear power generating station Pickering (Note 2) Other loans and investments

Disbursements

Corporations, boards and commissions

The Ontario Education Capital Aid Corporation

Development Corporations

The Crop Insurance Commission of Ontario . . .

Ontario Land Corporation

Ontario Housing Corporation

Ontario Mortgage Corporation

Other

Water treatment and waste control facilities

Loans to municipalities

Other loans and investments

Net Decrease in Loans, Advances and Investments

Trust Administration Functions

Credits

Pension funds

Deposit, trust and reserve accounts

The Province of Ontario Savings Office

Deposits net increase

Charges

Pension funds

Deposit, trust and reserve accounts

Net Increase in Trust Administration Functions

Total Non-Budgetary Transactions

105

106

100

45

144

72

73

67

30

30

28

18

22

20

13

5

4

8

10

43

35

53

52

13

22

22

25

5

20

25

20

20

444

391

420

69

69

71

37

39

38

40

19

19

15

10

4

29

4

15

8

2

21

153

139

147

27

40

39

2

1

1

329

351

378

115

40

42

330

333

302

157

154

128

28

154

61

515

641

491

80

84

71

44

49

51

124

133

122

391

508

369

506

548

411

See accompanying Summary of Significant Accounting Policies and Notes to the Financial Statements.

PUBLIC ACCOUNTS, 1979-80

1-7

STATEMENT OF DEBT TRANSACTONS

for the year ended March 31, 1980 ($ millions)

Proceeds of Loans

Non-public

Canada Pension Plan Investment Fund

Teachers' Superannuation Fund

Ontario Municipal Employees Retirement Fund. . . .

Canada Mortgage and Housing Corporation waste

control loans

Public

Treasury bills (net)

Total Proceeds of Loans

Retirements of Loans

Non-public

Canada Mortgage and Housing Corporation waste

control loans

Government of Canada, Municipal Development

Loan Board

Government of Canada, Federal-Provincial

Employment Incentive Programs

Public

For general purposes

Treasury bills (net)

Total Retirements of Loans

Debt Transactions (net)

Budget 1980

Actual 1980

Actual 1979

960

550

988

537

916 489 100

70

42

63

1,580

1,567

1,568 195

1,580

1,567

1,763

19

16

14

4

4

4

3

3

3

26

23

21

64

86

90

195

325

259

411

90

285

434

111

1,295

1,133

1,652

STATEMENT OF ONTARIO HYDRO TRANSACTIONS

for the year ended March 31, 1980 ($ millions)

1980

1979

Proceeds of debentures (public)

Retirements of debentures (public)

Net increase in debentures for Ontario Hydro purposes.

Related advances, interest and recoveries

Loans to Ontario Hydro

Interest on debentures

Recovery of interest and debenture retirements. . .

Related advances, interest and recoveries (net)

300

750

86

83

214

667

300

750

316

244

(402)

(327)

214

667

See accompanying Summary of Significant Accounting Policies and Notes to the Financial Statements.

1-8 PUBLIC ACCOUNTS, 1979-80

STATEMENT OF ASSETS AND LIABILITIES

as at March 31, 1980 ($ millions)

1980 1979

Assets

Cash, temporary investments and marketable securities (Note 1) 1,569

Advances to Ontario Hydro (Note 2) 3,782

Advances and investments other corporations, boards and

commissions (Note 3) 4,220

Investments in water treatment and waste control facilities (at cost

less recoveries) (Note 4) 1 ,062

Loans to municipalities 360

Other loans and investments (Note 5) 230

Total recorded assets 11 ,223

Net debt 10,701

21,924

Liabilities

Deposits with The Province of Ontario Savings Office 560 406

Pension Funds (Note 6) 1,816 1,567

Deposit, trust and reserve accounts 504 399

Advances payable 66 91

Treasury bills 325

Debentures and notes (Note 7) 18,978 17,281

See accompanying Summary of Significant Accounting Policies and Notes to the Financial Statements. Approved on behalf of the Ministry of Treasury and Economics.

MUUk«

A. RENDALL DICK, Deputy Treasurer of Ontario and Deputy Minister of Economics. G. McINTYRE, F.C.A., Assistant Deputy Minister, Office of the Treasury.

1,020

3,573

4,340

975

342

250

10,500

9,569

20.069

21,924 20,069

Contingent liabilities (Note 8) 7,593 6,734

PUBLIC ACCOUNTS, 1979-80 1-9

NOTES TO THE FINANCIAL STATEMENTS (all figures in millions of dollars}

1. Cash, Temporary Investments and Marketable Securities

Temporary investments, which include obligations of Canadian chartered banks and other short-term invest- ments, are recorded at cost. Marketable securities, which include debentures and bonds issued by the Province and Ontario Hydro, are recorded at cost which was $57 million at March 31, 1980 (1979 $51 million). The market value of these securities was $45 million at March 31, 1980 (1979 $48 million).

2. Advances to Ontario Hydro

1980 1979

Secured by bonds $3,782 $3,568

Nuclear power generating station Pickering 5

$3,782 $3,573

The Province, in addition to guaranteeing Ontario Hydro debt obligations, has issued U.S. dollar debentures on behalf of Ontario Hydro. The proceeds have been advanced to Ontario Hydro in exchange for U.S. dollar bonds with the same terms and conditions as the debentures of the Province.

The Province, by agreement with Ontario Hydro and Atomic Energy of Canada Limited, contributed $100 million to the capital cost of the Pickering nuclear power generating plant and under the terms of a thirty year agreement receives payments based on the net operational advantages of the plant. These payments have amounted to $120 million, of which $100 million has been applied to retire the advance and $20 million is included in other budgetary revenue.

3. Advances and Investments Other Corporations, Boards and Commissions

The Ontario Education Capital Aid Corporation

The Ontario Universities Capital Aid Corporation

Ontario Mortgage Corporation

Ontario Land Corporation

Ontario Housing Corporation

Development Corporations

Ontario Energy Corporation

Other

The Ontario Education Capital Aid Corporation has received advances from the Province to purchase bonds or debentures issued by school boards for capital expansion programs. The securities held by the Corporation are the obligations of the individual school boards. However, under current support arrangements for local school boards, approved debt charges are subject to Provincial grants averaging 75%. Effective April 1, 1980 the loan program has been replaced by grants to school boards from the Ministry of Education. The Corporation will continue to administer the amortization of the outstanding loans.

The Ontario Universities Capital Aid Corporation, under a program which was discontinued in 1978, received advances from the Province to purchase bonds or debentures issued by provincial universities, colleges, the Art Gallery of Ontario, the Royal Ontario Museum and municipalities on behalf of public libraries, for approved capital construction projects. The securities held by the Corporation are the obligations of the issuing institu- tions. However, these institutions received budgetary grants in 1980 of $115 million (1979 $116 million) from the Province to cover the full amount of principal and interest due to the Corporation.

The Ontario Mortgage Corporation has used advances from the Province to provide primary and secondary mortgage financing for eligible persons. The Province paid subsidies amounting to $2.3 million in 1980 ($2.5 million in 1979) to the Corporation for certain loans made at interest rates lower than cost. No new loan commitments were made in the current year and the Corporation sold $9.6 million (1979 $109 million) of its mortgage portfolio.

1980

1979

$1,274

$1,278

1,174

1,204

585

630

506

492

204

205

215

198

16

121

246

212

$4,220

$4,340

1-10 PUBLIC ACCOUNTS, 1979-80

NOTES TO THE FINANCIAL STATEMENTS - Continued

The Ontario Land Corporation was established in 1974 to assemble land for new communities and industrial parks. In 1978 the Corporation's objects were broadened to include land development. In this connection, certain assets of the Ontario Housing Corporation including land leases, mortgages, mortgage guarantees, agreements for sale and lands scheduled for residential, industrial and commercial development, were transferred along with related liabilities to the Ontario Land Corporation with effect from January 1, 1979. At March 31, 1979 the Corporation's liability to the Province was increased by $147 million. The Province charges no interest on advances being used to finance land holdings. At March 31, 1980 these advances were $400 million (1979 $397 million).

Ontario Housing Corporation plans, constructs and manages residential housing projects. Financing is provided by the Province and Canada Mortgage and Housing Corporation, and municipalities. The Province's share of the subsidy for the calendar year 1979 was $102 million (1978 $91 million). As described above, certain assets and liabilities were transferred to the Ontario Land Corporation with effect from January 1, 1979. At March 31, 1979 the Corporation's liability to the Province was reduced by $147 million.

Ontario Development Corporation and the associated Eastern Ontario Development Corporation and Northern Ontario Development Corporation provide loans and arrange for provincial guarantees of bank loans to qualified enterprises. The Province has purchased an equity of $7 million and has advanced all funding for the lending programs of the Corporations. Through its budgetary expenditures, the Province also transfers to the Corporations an amount to defray the costs of all administrative expenses, loans made at low interest rates, certain loan forgiveness, honouring guarantees, and writing off loans and losses. In 1980 these transfers amounted to $24.4 million (1979 $20.8 million).

Ontario Energy Corporation was established in 1975 with a $100 million equity investment by the Province to develop energy sources for Ontario through investment in energy exploration, development and production. The Corporation sold its equity interest in Syncrude Canada Ltd. in 1978. As a result, in the current year, the Province received a payment of $142 million of which $35 million was a dividend. The balance was used to reduce the advances and to repurchase some of the Corporation's share capital from the Province. At March 31, 1980 the Province's equity investment was $15 million.

4. Investments in Water Treatment and Waste Control Facilities

The Ministry of the Environment lets extensive contracts for the building of water and sewage systems to serve municipalities. These investments are being recovered over the life of the agreement with the municipalities. Agreements covering $967 million of the investment are for provincially-owned projects which are subject to service rate billings. The proceeds from billings are used to amortize the investment over periods up to forty years, to pay for operating costs and to provide a return on the investment. Certain other agreements provide for the accumulation of the principal portion of annual amortization payments in a sinking fund. The accumulated balance in such funds (included in deposit, trust and reserve accounts) was $41 million at March 31, 1980 (1979 $37 million).

5. Other Loans and Investments

Included in other loans and investments are Ministry of Health capital construction loans to public hospitals amounting to $217 million (1979 $236 million). During the 1980 fiscal year, the Province made grants of $19.3 million (1979 $19.1 million) to assist public hospitals in meeting principal and interest payments. No new loans have been made since 1978 when the Ministry changed its public hospitals capital financial support program from loans to grants.

6. Pension Funds

Public Service Superannuation Fund

Legislative Assembly Retirement Allowances Account.

1980

1979

$1,800

$1,551

16

16

$1,816 $1,567

The Province maintains accounts within the Consolidated Revenue Fund for all contributions and interest earnings less pension payments for both the Public Service Superannuation Fund and Legislative Assembly Retirement Allowances Account. The amounts recorded by the Province are essentially the sole assets of these pension plans.

PUBLIC ACCOUNTS, 1979-80

Ml

NOTES TO THE FINANCIAL STATEMENTS - Continued

Based on the latest actuarial report as at December 31, 1976, the Public Service Superannuation Fund had unfunded liabilities as follows:

1. An initial unfunded liability of $83 million, upon which an interest contribution of $6 million is required to be credited annually in accordance with The Pension Benefits Act.

2. Residual unfunded liabilities of $422 million which are required to be amortized by annual payments of $49 million until January 1, 1990 and $32 million on January 1, 1991 and 1992.

As at March 31, 1980, the Province had made all scheduled payments.

An actuarial review of the Legislative Assembly Retirement Allowances Account as at March 31, 1980 revealed a surplus of $43 thousand.

Teachers' Superannuation Fund:

Through the budgetary expenditures of the Ministry of Education the Province makes annual contributions to the Teachers' Superannuation Fund (which is administered by the Teachers' Superannuation Commission) equal in amount to contributions by members. Further, the Province is committed to paying any deficiency in the fund.

Based on the latest actuarial report as at December 31, 1978, the Teachers' Superannuation Fund had unfunded liabilities as follows:

1. An initial unfunded liability of $328 million upon which an interest contribution of $23 million is required to be credited annually in accordance with The Pension Benefits Act.

2. Residual unfunded liabilities of $768 million which are required to be amortized by annual payments of $97 million until December 31, 1989 and $94 million on December 31, 1990.

As at March 31, 1980 the Province had made all scheduled payments.

7. Debentures and Notes

1980

1979

Payable in

Years of

United

Maturity

Canadian

States

Deutsche

March 31

Dollars

Dollars

Marks

Total

Total

1980

$

$

$

$

$ 100

1981

133

7

140

52

1982

62

40

7

109

108

1983

122

125

7

254

254

1984

106

82

7

195

203

1985

104

2

106

1-5 years

527

247

30

804

717

6-10 years

2,205

99

10

2,314

1,973

11-15 years

3,787

44

3,831

3,423

16-20 years

6,931

429

7,360