Slide Deck 15A: Budget Basics

What is a Budget? A budget makes projections about the money you will receive and spend for a specific time period in the future. Budgets are important planning documents that are used by individuals, businesses and governments to ensure financial management, and that help outline priorities and achieve long-term goals.

The Provincial Budget The Ontario government’s fiscal year runs from April 1 to March 31. Every March or April, the government releases an annual budget, which plans out the money it will receive and where it will be spent during this time period.

Revenue vs Expenses Revenue: ‘money in’, income, money received, taxes Expenses/Expenditures: ‘money out’, outflow of money, cost, payment for goods and services

Key Terms Balanced budget: When revenue and expenses are equal. Surplus: Excess, when revenues exceed expenses, positive balance (+). Deficit: Deficiency, when expenses exceed revenues, negative balance (-).

What is a debt? When your expenses exceed your revenues (deficit), you will need to borrow money. The amount owing on borrowings is called a debt. Interest is a penalty charge you have to pay on money that you have borrowed and not yet repaid.

Can you think of reasons why individuals may borrow money? Can you think of reasons why the government may borrow money?

2018-2019 Ontario Budget Projected Revenue = $152.5 billion (money in) Projected Expenditures = $158.5 billion (money out)

Will the government have a surplus or a deficit this year? 2018-2019 Ontario Budget Will the government have a surplus or a deficit this year?

The Provincial Debt In order to continue providing public services, the Ontario government has had to borrow money. As the result of several consecutive deficits, the government’s current debt stands at approximately $350 billion.