WEBVTT Kind: captions Language: en-CA 00:00:04.560 --> 00:00:09.520 Welcome, and thank you for joining us. With the release of the Province’s 2026 Budget,   00:00:09.520 --> 00:00:12.640 my team and I would like to take  this opportunity to update you on   00:00:12.640 --> 00:00:19.000 Ontario’s finances and borrowing program. Ontario completed 58.6 billion dollars in   00:00:19.000 --> 00:00:26.320 long-term borrowing in 2025–26. While 15.8 billion  higher than anticipated in the 2025 Budget,   00:00:26.320 --> 00:00:31.040 it allowed us to pre-fund for next year’s  fiscal borrowing and pre-fund 5 billion   00:00:31.040 --> 00:00:37.040 towards the Protect Ontario Account, which I’ll  provide further details on later in the video.  00:00:37.040 --> 00:00:43.920 The long-term borrowing forecast for this upcoming  fiscal year is 47.2 billion dollars. The forecast   00:00:43.920 --> 00:00:50.960 over the medium-term is 10 to 15 billion  lower than what we borrowed in fiscal 2025–26.  00:00:50.960 --> 00:00:56.480 So how did we complete 58.6 billion dollars  of long-term borrowing this fiscal year? As   00:00:56.480 --> 00:01:01.200 discussed at last year’s budget and the Fall  Economic Statement, we’ve continued to be well   00:01:01.200 --> 00:01:06.400 received across global markets and therefore  our ratio of domestic to foreign borrowing   00:01:06.400 --> 00:01:12.080 moved to a 60:40 split approximately. One highlight of our domestic issuance   00:01:12.080 --> 00:01:17.840 was our first dual tranche Green Bond which  included a tap of our 30-year Green Bond and   00:01:17.840 --> 00:01:24.000 our first ever Green FRN. Otherwise, we were  fortunate to be able to access the domestic   00:01:24.000 --> 00:01:29.280 market across our usual fixed-rate benchmark  maturities and the Floating Rate Market.  00:01:29.280 --> 00:01:33.440 Ontario’s strong credit ratings, fiscal  profile and professional approach to   00:01:33.440 --> 00:01:40.480 markets have contributed to unprecedented global  investor demand for Ontario paper. As a result,   00:01:40.480 --> 00:01:45.520 last year we were able to issue in  U.S dollars, euros and Swiss francs.   00:01:45.520 --> 00:01:50.720 This heightened international demand resulted  in our increased foreign issuance, allowing for   00:01:50.720 --> 00:01:56.960 further diversification of Ontario’s investor  base, and reduce our overall cost of borrowing.   00:01:56.960 --> 00:02:04.160 One highlight, for the first time we issued a  30-year euro denominated bond, tapping into a   00:02:04.160 --> 00:02:09.440 new group of investors and providing extremely  attractive funding levels for the Province.  00:02:09.440 --> 00:02:15.680 In support of all our funding activities last  year, Ontario held close to 190 investor meetings,   00:02:15.680 --> 00:02:21.200 an all-time high, underscoring the province’s  transparent approach to keeping investors informed   00:02:21.200 --> 00:02:27.600 and engaged. We look forward to continuing broaden  our investor engagement including in support of   00:02:27.600 --> 00:02:33.520 our increased activities in the money markets. Looking ahead, the guidance for domestic borrowing   00:02:33.520 --> 00:02:40.320 will be adjusted to 60 to 80 per cent for fiscal  2026–27, and will continue to be adjusted,   00:02:40.320 --> 00:02:46.320 if necessary, in response to evolving  investor demand and market conditions.  00:02:46.320 --> 00:02:52.720 With the release of the 2026 Budget, we expect  to return to the market as soon as possible.  00:02:52.720 --> 00:02:57.760 Building on the Protect Ontario Account  announcement in the 2025 Ontario Budget, and   00:02:57.760 --> 00:03:03.760 later the 2025 Ontario Economic Outlook and Fiscal  Review, the province is establishing the Protect   00:03:03.760 --> 00:03:09.680 Ontario Account – Investment Fund. The Province  will invest up to 4 billion dollars into the Fund   00:03:09.680 --> 00:03:16.160 and has initiated a competitive process to partner  with a best-in-class private investment manager.  00:03:16.800 --> 00:03:22.260 The fund will leverage private sector experience,  while crowding in investment capital from Ontario   00:03:22.260 --> 00:03:28.320 based pension funds along with financial  institutions and other global investors.  00:03:28.320 --> 00:03:33.920 These landmark investments in sectors such  as artificial intelligence, defence, advanced   00:03:33.920 --> 00:03:39.840 manufacturing, life sciences, and research and  development in the critical minerals sector will   00:03:39.840 --> 00:03:45.200 advance Ontario’s long-term economic priorities. Let’s now turn towards the Fiscal Outlook.   00:03:45.200 --> 00:03:52.720 Ontario’s deficit in 2025-26 is projected to  be 12.3 billion dollars — an improvement of 2.3   00:03:52.720 --> 00:03:58.800 billion from the outlook published in the 2025  Budget and 1.2 billion from the Fall Statement.  00:03:58.800 --> 00:04:04.800 The 2026 Budget includes an updated economic and  fiscal outlook, as the government is projecting a   00:04:04.800 --> 00:04:11.440 13.8 billion dollar deficit for the 2026–27  and 6.1 billion the following year, before   00:04:11.440 --> 00:04:19.200 reaching a surplus of 0.6 billion in 2028–29. Interest and Other Debt Servicing Charges   00:04:19.200 --> 00:04:26.000 (IOD) is projected to be 16 billion dollars  this year — 0.2 billion lower than the 2025   00:04:26.000 --> 00:04:32.240 Budget forecast. Over the next couple of years,  IOD is projected to increase from 17.2 billion   00:04:32.240 --> 00:04:40.480 in 2026–27 to 19.7 billion by 2028–29. This  forecast has risen due to higher deficits,   00:04:40.480 --> 00:04:45.440 increased infrastructure spending and increased  loans and investments primarily driven by a   00:04:45.440 --> 00:04:50.880 larger Ontario Student Assistance Program. Despite global headwinds and ongoing trade   00:04:50.880 --> 00:04:57.280 pressures, Ontario’s economy remains resilient  and performed better than expected in 2025.   00:04:57.280 --> 00:05:03.440 Ontario’s real GDP growth is projected to rise  every year over the 3-year outlook starting with   00:05:03.440 --> 00:05:10.160 1 per cent in 2026, then increasing each  year before reaching 2 per cent in 2029.   00:05:10.160 --> 00:05:14.800 These projections are set slightly below  the average of private‐sector forecasts   00:05:14.800 --> 00:05:20.480 for the purposes of prudent fiscal planning. Finally, I’d like to turn to the Province’s   00:05:20.480 --> 00:05:24.480 Debt Burden Reduction Strategy. The government remains committed to   00:05:24.480 --> 00:05:29.920 reducing the debt burden while ensuring that  Ontario’s finances are sustainable. Ontario   00:05:29.920 --> 00:05:34.800 has maintained its targets and continues to  make progress towards achieving them over the   00:05:34.800 --> 00:05:42.480 medium-term outlook. In addition, Ontario’s path  to balance by 2028–29 will further reinforce its   00:05:42.480 --> 00:05:48.160 strategy towards debt burden reduction. Beginning in 2026–27, changes to Public   00:05:48.160 --> 00:05:53.440 Sector Accounting Standards will affect how  Ontario measures and reports on its progress.   00:05:53.440 --> 00:05:58.560 The new standards, which are being implemented  across Canada, require governments to separate   00:05:58.560 --> 00:06:04.160 liabilities into financial and non-financial  items when reporting balance sheet measures.  00:06:04.160 --> 00:06:09.360 To comply with the new standard, Ontario  has refined how Net Debt is calculated.   00:06:09.360 --> 00:06:14.720 Under this updated approach, Net Debt is  equivalent to Net Financial Liabilities,   00:06:14.720 --> 00:06:20.480 meaning it focuses on obligations that must be  financed through future revenues. This improves   00:06:20.480 --> 00:06:27.440 clarity and ensures reporting stays consistent  with public sector organizations across Canada.  00:06:27.440 --> 00:06:32.400 As a result of this change, Ontario  has also updated the names of its debt   00:06:32.400 --> 00:06:38.480 burden ratios to settle on clear, stable  terminology that is widely understood.  00:06:38.480 --> 00:06:42.720 These changes do not affect Ontario’s  fiscal plan, borrowing requirements,   00:06:42.720 --> 00:06:47.280 or debt management strategy. Rather,  they update the accounting presentation   00:06:47.280 --> 00:06:54.240 of key debt sustainability measures to improve  transparency and comparability for all users.  00:06:54.240 --> 00:06:59.360 Turning now to the ratios themselves: • Ontario’s net debt-to-GDP and   00:06:59.360 --> 00:07:03.280 Interest-to-revenue ratios remain  better than the government’s targets   00:07:03.280 --> 00:07:08.720 now and throughout the medium-term outlook. • The net debt-to-revenue ratio remains the   00:07:08.720 --> 00:07:13.440 most challenging measure. While the current  economic environment will temporarily raise   00:07:13.440 --> 00:07:18.240 the level of this ratio, the government  has demonstrated in the past and remains   00:07:18.240 --> 00:07:23.600 confident today that it can bring this ratio  back in line with its target over time.  00:07:23.600 --> 00:07:28.800 We hope this update has provided useful insight  into Ontario’s fiscal position, economic outlook,   00:07:28.800 --> 00:07:34.480 and prudent approach to borrowing and  debt management. Further fiscal and   00:07:34.480 --> 00:07:39.840 economic information related to the 2026 Budget  is available on the Ministry of Finance website,   00:07:39.840 --> 00:07:45.840 and updated borrowing information—including  our Investor Relations Presentation and Fact   00:07:45.840 --> 00:07:51.762 Sheet—can be found on the OFA website. Thank you very much for your time.