OFA’s Loans to Public Bodies Program
The OFA’s Loans to Public Bodies Program (“Program”) provides cost-effective financing to public bodies such as Crown agencies, school boards, colleges, hospitals, and specified Provincial corporations, boards and commissions. Under the Program framework, the Province, through the OFA, provides mainly long-term financing to these entities for capital purposes. In rare cases, the OFA may provide a loan for purposes other than capital investment. The program provides interest savings to the Province upon the consolidation of the public bodies' financial statements into the Public Accounts of Ontario.
To date, the OFA has provided long-term loans to a number of public bodies, including Ontario hospitals, colleges, and Crown corporations. As at March 31, 2023, the OFA had a total outstanding loan portfolio of approximately $5.0 billion, and a conservatively estimated saving of nearly $25 million in annual interest costs. Cumulative interest savings since inception of the Program in 2007 are in excess of $384 million.
The interest rates charged to public bodies are based on the Province’s cost of funds, and include an interest rate spread for the recovery of administrative costs related to managing the loans. Where applicable, a proxy commercial interest rate spread will also be added to reflect the purpose associated with the loan and revenues to service the loan.
Types of Projects
The types of projects that the OFA has provided funding for varies and includes capital projects such as college student residences, hospital information systems, and hospital long-term care facilities.
How to apply?
In order to be eligible to apply for an OFA loan, a proposed borrower must be a public body under the Capital Investment Plan Act, 1993, and submit information on the proposal to the OFA (see below). The proposed borrower must seek and obtain the written support of its oversight ministry. The OFA expects the oversight ministry to perform financial due diligence on the proposal, and the OFA undertakes its own due diligence on the proposed borrower’s request and the project.
Informational Requirements from Borrowers
Some of the material required by the OFA for potential financing typically includes:
- Project Business Case
- Project details (executive summary, scope, budget, governance, risk management, and timelines).
- Any Request for Proposal (RFP), business plan and process map, the first preferred proponent, and contract costs breakdown.
- Financial Information
- Audited financial statements.
- Detailed revenues and expenses cash flow forecast over the loan term, at both corporate and project levels.
- Loan repayment plan.
- Project Approval documents
- Board approval for the project and associated financing.
- Oversight ministry’s approval of the project as well as support for the borrowing from the OFA.
Loan review and approval request results, including timing, depend on a number of factors such as the completeness of the submission materials to the OFA; a project’s size, cost, complexity, business case; and the proposed borrower’s ability to repay the loan. In order to receive the financing in time, it is typically beneficial for a proposed borrower to receive oversight ministry support as soon as it has the required project details and to engage the OFA as soon as possible, including providing preliminary information and materials, to discuss the proposal and application requirements.
To contact the OFA and obtain further information about the OFA’s Loans to Public Bodies Program please submit your request to the following email address CFB-Loans@ofina.on.ca.