The Role of Financial Leadership in a Challenging Economic Climate “Financial Management from a Provincial Perspective” Presented by: Bruce L. Bennett Assistant Deputy Minister & Provincial Controller Ontario Ministry of Finance Event 4-3 Community Leaders, Financial Management Institute of Canada Hilton Lac-Leamy, Gatineau 13:30–14:30 November 27th, 2008

1. Purpose Outline public sector financial management issues facing Ontario against a backdrop of a global economic slow-down. Outline what the Ontario Ministry of Finance is doing to address these challenges and to transform finance management.

2. Background New Economic Challenges Existing Structural Challenges The global economic slow-down has no borders. Ontario’s economy is intimately linked to United States as it represent 83.5 percent of the province’s exports. Financial market uncertainty and international interventions to shore-up the financial and industrial sectors. Impact of the economic environment on government revenues and expenses. Existing Structural Challenges An aging population leading to increased demands for healthcare and income security. The need to address the infrastructure deficit through sustainable capital investments. Current Financial Management Challenge Governments must balance the need to respond to these immediate economic challenges without compromising its responsibilities for addressing the longer-term objectives.

3. Financial Leadership Role During economic downturns, the role of the public sector financial leader is even more critical. Our role is to provide government decision-makers with the best financial information possible, so that they can make well informed decisions amongst the competing public policy demands. To be successful in this role in supporting financial decision-making we must: establish a robust financial management framework; emphasize value for money and fiscal accountability; balance immediate fiscal impacts with longer-term stewardship; apply financial risk management principles; and ensure transparency in financial reporting through public disclosure.

4. Key Issues Volatility of revenue forecasts amidst economic uncertainty and the need to build robust fiscal plans in today’s environment. The extent of government fiduciary responsibility toward income security, in light of changing financial market situation. Comprehensive risk assessment of potential public investments, loans and loan-guarantees. The need to ensure on-going and effective evaluation of the government's financial assets. Responsibility to maintain service-levels through our various service delivery partners.

5. Response Ontario’s recent 2008 Fall Economic Statement provided an immediate short-term update of Ontario’s fiscal position. Examination of the public sector’s role to support Ontario’s businesses and citizens during these difficult economic times. The reconstituted Treasury Board Office integrates fiscal planning, controllership and audit leadership enabling government to be better equipped to deal with the competing demands. Strengthened financial management and governance that ensures fiscal accountability and value-for-money. Implementation of supply chain management initiatives that are achieving efficiencies in both the government and Broader Public Sector. Comprehensive strategy to revitalize financial capacity through attraction (financial internships and foreign-trained professional programs), training on core competencies and retention so that Ontario can build the financial leadership of the future.

6. Looking Ahead Responsive: our responses musts be flexible, timely and based on up-to-date information. Supportive: bring our financial expertise to the table to support the decision-makers in making difficult decisions and trade-offs. Innovative: searching for innovative solutions to help achieve public policy and fiscal goals. Balanced: ensuring understanding of the trade-offs amongst immediate challenges and longer-term objectives. Helpful: work with ministries to help them realize efficiencies and greater effectiveness by providing financial tools, training and techniques. Stewardship: ensuring stewardship of public resources, accountability for spending taxpayers dollars and transparency in financial reporting to the public.