Ontario Construction News staff writer
The Financial Accountability Office of Ontario (FAO) has released a new report reviewing the Government of Ontario’s 10-year infrastructure spending plan outlined in the 2025 Ontario Budget, offering a detailed look at how and where the province plans to invest in capital projects over the next decade.
The 2025 capital plan is a 10-year spending projection covering infrastructure owned and controlled by the province, as well as projects delivered by other entities that receive provincial funding. The plan totals $223.1 billion in nominal dollars over the period from 2025-26 to 2034-35.
By sector, health represents the largest share of planned spending at $61.1 billion, accounting for 27 per cent of the total. Transit follows closely at $60.7 billion, also 27 per cent. Provincial highways and other transportation projects account for $31.3 billion, or 14 per cent, while education is allocated $30.1 billion, or 13 per cent. The remaining funding is divided among ‘other’ sectors at $28.2 billion (13 per cent), postsecondary education at $5.1 billion (two per cent), justice at $4.3 billion (two per cent) and social infrastructure at $2.4 billion (one per cent).
To better compare spending trends over time, the FAO adjusted the capital plan from nominal to real dollars. After accounting for inflation, the FAO estimates the $223.1-billion plan is equivalent to $203.4 billion in real 2025 dollars. Of that amount, $93.2 billion, or 46 per cent, is expected to be spent in the first three years of the plan, with the remaining $110.1 billion, or 54 per cent, spread over the final seven years.
Average annual spending is projected to reach $31.1 billion per year over the first three years, before declining to an average of $15.7 billion per year over the last seven years. The FAO notes the drop reflects the early planning stages of many long-term projects, which have yet to be fully defined or included at their complete estimated costs.
Compared with the province’s 2019 10-year capital plan, the 2025 plan is $30.9 billion, or 17.9 per cent, higher in real terms. The largest real increases are in health care, up $23.6 billion or 75 per cent, followed by the ‘other’ category at $12.1 billion, or 87 per cent. Education spending is up $6.3 billion, or 31 per cent, while provincial highways and other transportation increase by $2.9 billion, or 11 per cent. Postsecondary education spending rises by $1.2 billion, or 35 per cent.
In contrast, real planned spending for transit is $13.5 billion lower than in the 2019 plan, a decline of 20 per cent. Justice spending is down $1.3 billion, or 25 per cent, while social infrastructure spending is reduced by $0.4 billion, or 15 per cent.
The FAO also compared projected spending over the next decade with actual capital spending over the past 10 years. In real dollars, the $203.4-billion 2025 capital plan is $1.6 billion, or 0.8 per cent, lower than the $205.0 billion spent between 2015-16 and 2024-25.
Health, ‘other’ sectors and justice are projected to see higher real spending over the next decade than in the previous 10 years, with increases of $17.7 billion, $7.1 billion and $0.8 billion, respectively. However, several sectors are expected to see lower spending, including transit, down $11.4 billion; provincial highways and other transportation, down $6.0 billion; postsecondary education, down $5.0 billion; social infrastructure, down $3.4 billion; and education, down $1.4 billion.
The report also breaks down how the $223.1-billion plan is funded and allocated. The province is expected to contribute $184.6 billion, or 83 per cent, while federal and municipal governments are projected to contribute $16.3 billion, or seven per cent. Third parties, including colleges, hospitals and school boards, are expected to provide $22.2 billion, or 10 per cent, from their own sources such as fees and donations.
Of the total, $191.1 billion, or 86 per cent, is earmarked for capital assets owned or controlled by the province, including hospitals, colleges, schools and highways. The remaining $31.9 billion, or 14 per cent, is allocated to capital expenses, largely in the form of transfer payments to outside entities such as municipalities, long-term care homes and universities. The FAO estimates that $128.2 billion, or 57 per cent, will go toward expansion projects, while $94.9 billion, or 43 per cent, will be used for the renewal and modernization of existing infrastructure.
The full FAO report provides additional detail on sector-by-sector trends and long-term infrastructure planning assumptions.
