Doing Less with Less
Doing Less with Less: How shortfalls in budget, staffing and in-house expertise are hampering the effectiveness of MOE and MNR
This Special Report was submitted to the Legislative Assembly of Ontario on April 24, 2007. For more information, including the full report in .PDF and communications materials, please click here.
Introduction
Sound management of Ontario’s environmental resources is critical to safeguarding their ecological sustainability and ensuring our social, economic and environmental well-being. Although other ministries play important roles in this regard, the Ministry of the Environment (MOE) is the primary agent protecting Ontario’s air and water quality and its ecosystems, and the Ministry of Natural Resources (MNR) is the primary steward of Ontario’s wildlife, forests, wetlands, aquatic life, plants and aggregate resources.
As environmental stewards, these ministries must, on an on-going and regular basis:
- track the health of Ontario’s natural environment;
- identify instances where environmental degradation has occurred or is imminent;
- take action to prevent, mitigate or manage existing or imminent degradation or impairment;
- develop and implement rules and procedures governing human activities that are sufficient to protect the environment;
- conduct investigations to determine whether there is compliance; and
- undertake education, enforcement and other activities to promote compliance.
Responsibilities of MNR and MOE have expanded over the long-term
Since the creation of MOE and MNR in the early 1970s, the core responsibilities of both ministries, the volume of work they must perform, and complexities of their mandates have greatly increased. The regulated communities also have grown in number; for example, there are more manufacturing facilities requiring approvals for air and water emissions, more pits and quarries, and so on. Over the same period, many environmental issues have become more complex and technically demanding, and the regulatory framework to manage these issues has grown in sophistication. Finally, a number of new program demands have emerged – some as a consequence of local crises, such as Walkerton; others, like invasive species, which present new ecological challenges as they appear on the landscape; and still others, like ozone depletion, arising from new scientific understanding about our impact on the environment.
The expanding responsibilities of MOE and MNR have resulted in a need for additional staff to carry out the necessary monitoring, inspection, enforcement, research and reporting duties. The growing technical sophistication of the science underlying much of the work has also generated an increased need for specialized expertise. Operational funding needs have also grown.
As will be shown in the following chapter, the budgets of MOE and MNR have not kept pace, in real terms, with the increased responsibilities of the two departments. Instead, there have been episodes of significant cut-backs, intermittent periods of partial recovery, and long periods of constraint. In real terms (2006 constant dollars), the budgets of both MNR and MOE are significantly (18 to 34 per cent) lower in 2006/2007 than 14 years earlier.
The following chapter will also show that in terms of per capita expenditures on the environment, MOE’s operating budget in real terms declined from $39 per capita to $22 per capita in the 15-year period from 1992/1993 through 2006/2007. MNR’s per capita operating budget also declined over the same period. The declines have occurred under governments formed by all three major political parties of Ontario.
ECO reviews impact of capacity problems within MOE and MNR
In this report, the Environmental Commissioner of Ontario (ECO) reviewed the mandates, budgets and staff levels of MOE and MNR, to determine whether these ministries have sufficient capacity to carry out their duties. For the purposes of this report, ‘capacity’ is defined as having the ability to effectively carry out a function, task or mandate.
A lack of capacity could stem from a shortfall of one or more of three specific types of resources: financial resources, human resources, and/or expertise. Financial resources are the dollars dedicated to a task so that staff members are able to travel, inspect sites, complete plans, purchase necessary equipment, etc. Human resources are the number of staff members dedicated to a function. Expertise represents the need for staff with certain skills, knowledge or experience (e.g., enforcement experience, scientific or legal training, etc.).
To assess these ministries’ capacities to carry out their mandates, the ECO reviewed:
- the process by which provincial budgets are set;
- changes in the MOE and MNR budgets between 1992/1993 and 2006/2007;
- changes in MOE and MNR staffing levels during the same period;
- funding levels for ministries with similar mandates in other provinces;
- the consequences of long-term capacity constraints on program delivery;
- the expanding mandates and evolution of priorities of these ministries;
- alternative delivery mechanisms used to partially offset capacity shortfalls; and
- eight core programs at MOE and MNR, including parks management, wildlife monitoring, environmental approvals, and the inspection of water wells, to gauge how well these programs have evolved in a climate of fiscal restraint (see Appendix 1).
The report concludes with a series of recommendations designed to restore the operational funding, staffing levels and in-house expertise of MOE and MNR to a level that reflects the value that Ontarians place on the natural resources of this province.
In addition to the eight case studies noted above, the appendixes contain an overview of the budget setting process in Ontario, reviews of the evolving mandates of MOE and MNR, and explanatory notes that supplement the budgetary analyses.
Analysis of the Operating Budgets of MOE and MNR
The ECO’s review of the operating budgets of the MOE and MNR covers a period of 15 years and four governments. Operating budgets cover expenditures dedicated to, primarily, personnel and programs, and reflect how many people a ministry has available to carry out its mandate. Capital spending, while still very important, relates mostly to buildings, large equipment and infrastructure needs. This report deliberately focuses on the personnel side of ministry spending; the ECO has observed for a number of years that these ministries do not have the personnel necessary to effectively carry out all elements of their mandates. If a function or task, like inspection or enforcement, does not have sufficient personnel allocated, the function or task can not be carried out effectively.
Operating budgets have declined, in real terms, over study period
The trend of MOE’s operating budget over the first half of the study period is one of decrease throughout most of the 1990s, finally hitting its lowest level in the fiscal years 1997/1998 and 1998/1999 (see Figure 1 and Notes). This period marked a critical juncture, in terms of MOE’s budget and the reductions the ministry was facing, according to Justice O’Connor:
- “With one exception, there was no negotiation between the central agencies and the MOE about the amount of the targeted budget reductions in view of the ministry’s statutory responsibilities. The sole exception occurred in 1998, when the central agencies were proposing further reductions. The Minister of the Environment at the time … was advised by his staff that the MOE had reached the point where further budget reductions would affect the delivery of core programs.”
From that point forward, MOE’s operating budget began to recover, but much of the increase was dedicated to meeting drinking water protection obligations flowing from the Walkerton tragedy and the recommendations arising from the subsequent Inquiry. For example, MOE’s Clean Water Program had planned expenditures of about $7 million in 1999/2000. This number grew to approximately $43 million in the 2003/2004 estimates, and to approximately $120 million in the 2005/2006 estimates. This program alone accounted for almost all of the budget increase that MOE has experienced in the past decade.
Although MOE’s budget has been on the incline in recent years, it is only just beginning to approach the budget levels seen in the early 1990s. However, this apparent rebound is deceptive because it does not account for the impact of inflation over the study period, 1992/1993 to 2006/2007. For instance, services purchased for approximately seventy-seven cents in 1992 would cost one dollar in 2006 – a 30 per cent decrease in value. After adjusting MOE’s operating budget for the effects of inflation, the actual decrease in MOE’s operating budget between 1992/1993 and 1998/1999 was approximately 56 per cent. Despite subsequent increases, the buying power of MOE’s 2006/2007 operating budget is approximately 34 per cent lower than it was in 1992/1993 level (see Figure 3).
MNR’s operating budgets exhibit greater variability than those of MOE over the study period. MNR’s budget declined and then stabilized, to some degree, in the late 1990s and into this decade (see Figure 2). When MNR’s budget is assessed on a 2006 constant dollar basis or its budget is charted year-by-year on a per capita spending basis, then this ministry has not fared so well. Expressing MNR’s operating budget in real terms (see Figure 4), the actual decrease in MNR’s operating budget between 1992/1993 and 2004/2005 was approximately 35 per cent. Despite a subsequent increase, MNR’s 2006/2007 operating budget is approximately 18 per cent lower than its 1992/1993 level (see Figure 4). In addition, the recent increase in MNR’s operating budget is somewhat misleading, because it includes money that just ‘flows through’ the ministry to industry and other private sector partners. For example, 97 per cent of the increase in MNR’s operating budget in 2006/2007 was new funding to respond to a crisis in the forest industry, and consisted, primarily of direct transfers to forest companies. If all transfers to industry and other organizations are netted out, MNR’s budget in 2006/2007 is actually 22 per cent lower, in real dollars, than it was in 1992/1993.
Figure 1: Trend in MOE’s operating budget, nominal and adjusted to 2006 constant dollars. See Notes in Appendix 5 for this graph. Source: MOE.
Figure 2: Trend in MNR’s operating budget, nominal and adjusted to 2006 constant dollars. Source: MNR’s Estimates Briefing Book. Note, SPA refers to Special Purpose Accounts (see MNR Case Study #2, Parks Program, for more detail).
Figure 3: Per cent change since 1992/1993 in MOE’s operating budget, after inflation (2006 constant dollars).
Figure 4: Per cent change since 1992/1993 in MNR’s operating budget, after inflation (2006 constant dollars).
Budgets have not kept pace with growing population
Another way of reviewing MOE’s operating budget is to track how it has fluctuated in relation to Ontario’s growing population base. During the period 1992/1993 to 2006/2007, Ontario’s population grew approximately 20 per cent, from 10.6 to 12.7 million people. During that same period, MOE’s operating budget in real terms declined from $39 per capita in 1992/1993 to a low of $16 per capita in 1997/1998 and 1998/1999, before partially recovering to $22 per capita in 2006/2007 (see Figure 5). During that same period, MNR’s operating budget in real terms declined from $72 per capita in 1992/1993 to a low of $40 per capita in 2004/2005, before partially recovering to $49 per capita in 2006/2007 (see Figure 6).
Figure 5: MOE’s operating budget on a dollars spent per person basis, for the population of Ontario.
Figure 6: MNR’s operating budget on a dollars spent per person basis, for the population of Ontario.
Ministry staffing levels mirror changes in operating budgets
Operating budget reductions have a relatively direct correlation with staffing levels. As can be seen in Figure 7 (and the Notes to the figures in Appendix 5), MOE’s staffing levels have generally mirrored changes in annual operating budgets, falling with reductions and rising with increases. MNR’s staffing level has fallen since 1992/1993, but has remained almost constant since 1997/1998, at about 3,500 full-time equivalent (FTE) positions (see Figure 8).
Figure 7: MOE staff levels 1992/1993 to 2005/2006. Totals are measured in full-time equivalent positions, as reported at fiscal year-end. See Notes in Appendix 5. Source: MOE
Figure 8: MNR staff levels 1992/1993 to 2005/2006. Totals are measured in full-time equivalent positions, as reported at fiscal year-end. Source: MNR
Another means of analyzing the spending allocation and capacity of MOE and MNR is to compare these ministries’ operating budgets to the overall operating budget of the Ontario Government. This comparison clearly illustrates that both ministries (but especially MOE) have been allocated less and less of the overall Ontario Government operating budget over the study period (see Figure 9).
On a percentage basis, MOE’s planned operating budget for 2006/2007 is about a third of one per cent of the entire operating budget of the Ontario Government. In the early 1990s, MOE’s and MNR’s operating budgets had been as high as 0.63 and 1.15 per cent, respectively, of the operating budget of Ontario (see Table 1). Today, both MNR’s and MOE’s operating budgets, combined, account for only about one per cent of the overall provincial operating budget. This decline has occurred despite the significant growth in the overall operating budget of Ontario (see Table 1).
Figure 9: The planned 2006/2007 Ontario Government’s operating budget ($84.7 billion)
- See Notes in Appendix 5.
| Fiscal Year | Ont. Government Operating Budget | MOE Allocation | MNR Allocation | ||
|---|---|---|---|---|---|
| 1992/1993 | $50,643 M | $318 M | 0.63% | $584 M | 1.15% |
| 1993/1994 | $51,324 M | $296 M | 0.58% | $505 M | 0.98% |
| 1998/1999 | $55,573 M | $152 M | 0.27% | $552 M | 0.99% |
| 1999/2000 | $57,022 M | $174 M | 0.30% | $473 M | 0.83% |
| 2006/2007 | $84,716 M | $273 M | 0.32% | $622 M | 0.73% |
Table 1: Ontario budget percentage allocations to MOE and MNR, selected years. MNR allocation includes funds from Special Purpose Accounts.
Another method of assessing the magnitude of a ministry’s budget is to compare the percentage its budget represents of the overall Ontario budget to the allocation comparable ministries receive in other jurisdictions. For example, the Government of British Columbia will allocate to its Ministry of Environment between 0.54 and 0.65 per cent of the overall provincial budget (operating and capital) over the period 2005/2006 to 2007/2008. Similarly Alberta’s Environment Ministry will be allocated 0.48 to 0.52 per cent of the provincial budget over the same period.
In Ontario, MOE’s planned share of the provincial budget ranges from 0.32 to 0.35 per cent over the period 2005/2006 to 2007/2008 (see Figure 10).
Figure 10: Budgets of three provincial environment ministries presented as a percentage of the overall budgets of their respective provinces. (It should be noted that comparisons with other provinces are not easily drawn because of differences in the mandate or structure of ministries with environmental responsibilities.)
Ontario’s October 2006 Fiscal Outlook Report reported that the Ontario Government is seeking to identify $750 million in program review savings by 2007/2008. Cost-cutting measures could have a further detrimental effect on the capacity of MNR and MOE to carry out their mandates, as these two ministries have been the target of repeated expenditure reductions in the past.
The Impact of Capacity on Program Delivery
Anecdotal evidence indicates significant loss of expertise
In this report, the term “expertise” means the scientific and technical knowledge, skill and understanding needed to develop and carry out programs. It typically requires not only academic training in a relevant field of study, but also significant hands-on training and years of experience on the job, to acquire such expertise.
It is challenging to describe and quantify how levels of expertise within a ministry have changed over time. The ECO has no documented evidence that expertise within the ministries has declined to unsatisfactory levels. Further, there is no indication that the ministries are tracking or evaluating whether levels of expertise within their programs are sufficient to permit them to fulfill their mandates.
In the course of reviewing various ministry programs, the ECO has concluded (based on circumstantial observation) there has been a gradual decline of expertise within MOE and MNR. The ECO has observed a number of factors that are likely contributing to the decline. These factors include:
- the trend in shifting program delivery to partners outside the ministry, while retaining the policy development work in-house;
- cuts in staffing, with associated loss of expertise;
- the increasing use of contracted specialists and consultants for the completion of reports (often, the consultant relies on former ministry staff for expertise);
- reduced funding for the development and delivery of monitoring programs;
- the consolidation of many specialist positions to fewer generalist positions;
- a reduction in the number of positions that focus on science; and
- the transfer of people with technical expertise to policy and management positions where that technical expertise is only indirectly applied, if at all.
A number of examples of lost expertise were documented in the case studies conducted to support this report. These include the loss of:
- field expertise within MOE with respect to the inspection and oversight of private water wells;
- engineering and operational expertise within MOE in relation to the approval and compliance inspection of operating sewage and water infrastructure;
- expertise within MNR with regard to certain wildlife surveying and inventory work; and
- hydrogeological expertise within MNR related to sand and gravel operations.
Other observers have commented on the gradual loss of expertise at MOE. For example, senior MOE officials testified at the Walkerton Inquiry that early retirement programs (implemented as cost-cutting measures prior to 1996-97) resulted in a significant and premature loss of experience and ‘collective memory.’ Within MOE, at least, high staff turn-over in some divisions and branches may also be playing a role in declining expertise.
Trends at MNR have been somewhat different; that ministry is experiencing an aging workforce, and is beginning to examine the need for succession planning.
ECO has documented a history of program problems
Strategic priority-setting, reforms in delivery mechanisms and the reallocation of resources to better achieve objectives are all, in and of themselves, desirable attributes of an effective organization. Over the past 15 years, both MOE and MNR have made serious efforts to address an expanding mandate with decreasing resources by changing the way they have run their programs. Such changes are laudable, so far as they permit the ministries to efficiently and cost-effectively protect natural resources, air, water and land.
However, the ECO in its annual reports has consistently provided numerous examples of policy development and implementation, baseline monitoring, and enforcement programs that have been negatively impacted by capacity limitations.
- MOE relies on a 15-year-old, rudimentary inventory of waste disposal sites that inhibits its ability to monitor and properly regulate Ontario’s landfill sites. The Ministry has indicated that it lacks the staff and financial resources to update and enhance the database.
- To control industrial air emissions, MOE relies on a number of outdated air standards for contaminants that the ministry has classified as “Group 1, high priority candidates”. While, the ministry had originally planned to finish updating standards for these substances by 1996/1997, this has not been completed by 2006/2007.
- MNR’s already small budget for acquiring properties of high ecological significance has remained virtually frozen for the past decade, while land values in Southern Ontario have increased dramatically and inflation has eroded the purchasing power of the fund.
- In 2001, MOE proposed a five-year phase-out of the land application of untreated sewage from septic tanks due to increasing concerns about the potential impact on surface and groundwater quality. Even though other jurisdictions have banned the practice, the policy remains at the proposal stage.
- For 75 years, the province was active in re-establishing forested areas, in concert with municipalities and conservation authorities. Since 1994, MNR has withdrawn from this activity, losing one of the few levers available for encouraging reforestation in Southern Ontario.
- After running Ontario’s tree seedling nurseries for 90 years, MNR closed or privatized those nurseries during the 1990s. Seedling sales decreased from an estimated peak of nearly 30 million trees in 1992 to less than three million seedlings by 1998. There is currently no ministry program to track plantings on private land.
- MNR has very limited capacity to monitor fish populations, including valuable sport fish species, such as lake trout, which are vulnerable to over-fishing. In 2003/2004, the ECO reported that the ministry has long-term population data for less than two per cent of the lakes inhabited by this species.
- Mercury contamination is the cause of over 95 per cent of all the fish consumption restrictions in Ontario’s smaller inland lakes. However, neither MOE nor MNR have been monitoring mercury concentrations or impacts in vulnerable top predators, such as loons or otters, while budget constraints have limited mercury monitoring in fish populations.
- MOE has downloaded control of noise, dust and odour problems to municipalities which may lack the resources, expertise or legal authority to take effective action. In a number of cases, frustrated complainants have managed to convince MOE to take action by resorting to applications under the EBR.
The ECO believes that these examples are not simply a long list of unrelated, isolated failings or oversights but, rather, represent a pervasive syndrome, caused by chronically over-stretched resources, and resulting in poor delivery of important programs.
Case studies illustrate capacity problems
The ECO has also undertaken a series of eight case studies to illustrate the practical impact that chronic under-funding and other systemic capacity constraints have had on program delivery in MOE and MNR. The case studies, presented in this report, provide additional clear and compelling evidence that both ministries are struggling to meet their core responsibilities.
MOE Case Study #1: Inspection Programs
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MOE is responsible for inspecting the numerous facilities in Ontario to ensure that they are complying with all of the provincial environmental laws and regulations. The case study notes that MOE has the capacity to inspect only about 2-4% of all regulated facilities each year, and that many facilities may go decades without inspection. When inspection sweeps are conducted, extremely high levels of non-compliance are often found. Despite MOE’s concerted efforts to refocus its inspection resources, MOE’s inspection program continues to face significant challenges.
MOE Case Study #2: Oversight of Sewage Treatment Plants
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MOE is responsible for regulating the discharge of sewage into Ontario’s waters. This includes responsibility for approving the construction and operation of sewage treatment plants (STPs), enforcing compliance by STPs with ministry laws, policies and other environmental requirements, and monitoring and reporting on STP performance trends and impacts on the environment. Although the public would expect that MOE is ensuring that this most basic public service does not pose a threat to the environment or human health, large discharges of raw or inadequately treated sewage are continuing to pollute bodies of water throughout the province.
MOE Case Study #3: Water Well Inspections
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MOE is responsible for enforcing Regulation 903 (Wells, R.R.O. 1990) made under the Ontario Water Resources Act, which specifies standards for water well construction, disinfection and abandonment among other things. Given the importance of groundwater to millions of Ontarians, the public would expect MOE to have a program to guard against improper well construction and inadvertent water contamination. As of early 2007, MOE does not have staff dedicated to investigating private drinking water well construction, repair or abandonment operations on an on-going basis.
MOE Case Study #4: Certificates of Approval
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One of MOE’s core responsibilities is regulating activities that may have an impact on the environment. MOE regulates these activities by issuing permits known as “Certificates of Approval” (Cs of A), and by attaching legally-binding compliance conditions to these Cs of A to minimize impacts on human health and the environment. Thousands of applications for Cs of A are submitted to MOE each year at a rate faster than the ministry can process. In addition, a large number of facilities in Ontario are operating with Cs of A that contain conditions both outdated and inconsistent with those imposed on similar, but newer operations.
MNR Case Study #1: Aggregate Planning and Compliance
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MNR is responsible for managing Ontario’s aggregate resources – the sand, gravel and rock which are essential materials for all types of construction. The aggregate industry operates roughly 6,000 pits and quarries across the province. The case study notes that the number of aggregate inspectors has been cut significantly, and that inspectors are not able to meet the ministry’s own targets for site audits. Compliance problems are evident. The ministry also has inadequate capacity to carry out long-term planning for aggregates or to oversee rehabilitation of worked-out sites. Although the ministry has been taking some early steps to shore up its aggregates program, more resources and support will be needed to rebuild the ministry's capacity in this area.
MNR Case Study #2: Parks Program
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MNR is responsible for Ontario's system of 631 parks and conservation reserves. The parks system has grown rapidly, and new legislation requires more complex management, as well as mandatory management planning, monitoring and reporting. The parks system is managed under a business model, relying mainly on user fees, with steadily diminishing government funding. The ECO found that, even with increased revenues, the parks operating budget has not kept up with the rapid growth in the parks system. The ministry has not been able to meet its full responsibilities for management planning, monitoring, or enforcement, due to insufficient resources.
MNR Case Study #3: Fish and Wildlife Monitoring
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The case study summarizes capacity issues related to the inventory and monitoring of populations and harvests of mammals, birds, sport fish, reptiles and amphibians, in particular, and of Ontario's native plants and animals, in general. The case study notes the lack of published state of the resource reports and MNR's reliance on the revenue from hunters and anglers, and on partnerships to support existing inventory, monitoring, assessment and reporting activities.
MNR Case Study #4: Enforcement of Conservation Laws
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MNR employs Conservation Officers (COs) to enforce fish and game laws and other statutes. The case study notes that the responsibilities of COs have expanded significantly over time to include public education, control of invasive species, protection of endangered species, and enforcement of a wide range of legislation. However, the numbers of COs in the field have declined significantly since 1992. Operating funding is also limited, and key enforcement statistics have been in decline for a number of years.
Capacity problems at MOE and MNR have wider economic impacts
A lack of capacity at MNR and MOE affects more than Ontario’s environment. The under-funding of these ministries also has a negative impact on Ontario’s economy. The ECO has been informed of numerous instances where regulatory uncertainty or delay has hampered business activities, including the following:
- The permits, licences, certificates of approval and other legal instruments issued by MOE and MNR are required for a wide range of industrial, commercial and resource extraction projects. These projects can be delayed if they are not assessed in a timely manner and, pending a project’s approval, if the related instrument is not issued expeditiously. Staff or expertise shortfalls can contribute to these delays.
- Companies in one sector were unwilling to proceed with environmentally-beneficial facility upgrades, unless MOE passed a regulation establishing a level playing field and requiring their competitors to take similar action. In another instance, contractors complained that MOE regulatory amendments had created confusion with one of MOE’s licencing systems, hampering their ability to carry out projects and execute contracts.
While the primary purpose of this report is to detail the environmental impacts of MOE’s and MNR’s capacity shortfall, it is worth noting that approvals delays, regulatory uncertainty and extended processes, all of which could stem from a lack of capacity, can result in negative impacts to businesses in Ontario.
How the Capacity Problem Arose
Ministry budgets and spending directions set by the government
Once a year, usually in late winter or spring, the Minister of Finance tables a budget in the Provincial Legislature. This document sets out the revenue projections and spending priorities for the Ontario Government for the forthcoming fiscal year (April 1st to March 31st ). Typically, the Minister of Finance holds a number of pre-budget consultations at which stakeholders can provide input into the process. However, the contents of the budget are kept confidential until it is tabled in the Legislature. Only certain members of the Ontario government, certain staff of the offices of the Premier and Minister of Finance (MOF), and cabinet committees (such as Treasury Board and Management Board of Cabinet) would have knowledge of some or all of its contents.
In effect, most of the large-scale financial numbers and spending directions are established by the Finance Minister through the budget process. The implications of this centralized, top-down approach were noted by Justice O’Connor in his Report of the Walkerton Inquiry:
- “Beginning in 1992-93 and continuing until 1997-98, the budget of the Ministry of Environment (MOE) underwent very substantial reductions…The budget reduction targets for the MOE were not set by that ministry. They also did not involve a review of the question of whether the reductions could be achieved without sacrificing the MOE’s capacity to fulfill its statutory mandate. Rather, the reduction targets were initiated by the central agencies, and the MOE’s responsibility was to develop strategies for achieving those targets.”
- -- Report of the Walkerton Inquiry, Part One, (2002), Chapter 11
Establishing government spending priorities and meeting program delivery and fiscal objectives entails a number of steps and procedures involving Ontario ministries, Cabinet Office and other agencies. During this process, significant spending directions are established, and the relative magnitude of each ministry’s budget (compared to the others) is set. After the major financial decisions and spending directions are established by the Finance Minister through the budget process, an all-party committee of the Legislature called the Standing Committee on Estimates reviews specific spending plans of certain ministries. Ministries also rely on a process called “Results-based Planning” to guide the organization of spending activities and program development. (see Appendix 2 for further detail).
How the ministries have responded to the challenges
Both ministries have tried hard to adapt to on-going budget constraints, with repeated efforts to reprioritize (more detail on these efforts is provided in Appendices 3 and 4). At any given time, the ministries have focused their limited resources on one or more “flagship” programs, reflecting the priorities of the government of the day, such as MOE’s Municipal Industrial Strategy for Abatement (MISA), or MNR’s Lands for Life program . But on-going “day-to-day” core activities (such as inspections or baseline monitoring) not directly related to the flagship programs have suffered as a consequence, and have often been at risk of being phased out or absorbed into some other function. The periodic emergence of new “flagship” initiatives has in turn drawn expertise, staff and funding away from previous high priorities, resulting in an expanding arena of regulatory and policy obligations, but without growing resources to follow through.
MOE and MNR have also both worked diligently since the early 1990s to find creative alternative strategies to deliver programs and activities. Sometimes these approaches have been relatively effective, but the ECO has observed many instances where important activities have been handed off to entities ill-equipped (or reluctant) to take them on. Depending on the situation, the ministries have downloaded programs to local levels of government, off-loaded activities to the private sector, or partnered with volunteer groups. For example in 1997, MOE downloaded noise, dust and odour issues to municipalities, and MNR gave the aggregate industry the task of reporting on their own sites. In other instances, programs have been scaled back, or simply discontinued; MOE discontinued unannounced inspections of water well installations and MNR discontinued the Southern Ontario Forestry Program.
In a number of situations, legislation and policies have been amended to allow for the alternative delivery approaches – to allow third parties to carry out activities formerly done by ministry staff. But despite such legislative amendments, MNR remains the ultimate steward of Ontario’s natural resources, and MOE remains responsible for protecting the province’s air, water and land from pollution. While activities may be devolved or downloaded, the stewardship responsibility continues to rest with the provincial ministries. This is the expectation of the Ontario public, and the ministries acknowledge this expectation in their self-described mandates.
Conclusions and Recommendations
The ECO’s review of the operating budgets of both MNR and MOE indicates that these key environmental Ministries have not been allocated financial resources in accordance with the growth in the overall operating budget of the Ontario Government.
During the study period MOE’s budget declined dramatically, leveled off and appears to be making a slow recovery. However, most of the growth in MOE’s operating budget can be linked to its Clean Water Program. Other core programs have not enjoyed a similar infusion of financial and staff resources, and continue to have difficulty in fully realizing their program objectives. MNR’s budget history is more variable, but with an underlying downward trend in the mid-to-late 1990s. Most of the recent increase in MNR’s operating budget represents funding that will flow through to the forest industry, and not funding for enhancing MNR’s core programs.
The net effect of Government policies and budget priorities over the last 15 years has been to limit the capacity of MOE and MNR to undertake their basic functions in a timely, effective and comprehensive manner. As a result, Ontario is losing ground on meeting the most basic obligations for protecting the environment.
In consultation with the ministries and the public, the Ontario government should:
1. Undertake a step-wise, strategic rebuilding of capacity at MOE and MNR, to ensure that the ministries can fulfill their mandates.
2. Develop planning, priority-setting and budgeting processes to ensure that MOE and MNR are adequately equipped to:
- know the overall state/health of Ontario’s natural environment;
- know when degradation or impairment of the environment is imminent;
- take action to prevent, mitigate or manage existing or imminent substantive degradation or impairment;
- set rules and procedures governing human activities that are sufficient to protect the environment; and
- know where rules and procedures are not being complied with, and take measures to achieve compliance.
3. Direct MOE and MNR to undertake a third party evaluation of the adequacy and distribution of technical and science expertise within their agencies.
Citing This Article:
Environmental Commissioner of Ontario. 2007. Doing Less with Less: How shortfalls in budget, staffing and in-house expertise are hampering the effectiveness of MOE and MNR, ECO Special Report, 2007. Toronto, ON : Environmental Commissioner of Ontario.
