Less and Less: Budgets for MOE and MNR not Meeting Needs
The bulk of the responsibility for protecting Ontario’s environment and natural heritage falls to two ministries: the Ministry of the Environment (MOE) and the Ministry of Natural Resources (MNR). Since the early 1970s, MOE has been the primary agency protecting Ontario’s air, water and ecosystems, regulating municipal and hazardous waste, and overseeing Ontario’s environmental assessment process. MNR has been the primary steward of Ontario’s terrestrial and aquatic plants and animals, including hundreds of protected areas, and has been responsible for overseeing the extraction of certain natural resources, such as timber, stone, sand and gravel. However, much has changed for these two ministries since their early days. The scope, volume and complexity of their responsibilities have grown greatly, as those responsibilities have for environmental regulatory agencies in all jurisdictions. There are at least two reasons for this.
- The core business of these two ministries has become much more complex.
- They must also deal with expanding responsibilities and address some entirely new environmental issues.
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Managing a More Complex Mandate
The strong growth in Ontario’s population and economy in recent decades has required MOE and MNR to consider environmental impacts of increasing magnitude and from more diverse sectors and industries. At one million manufacturing workers, Ontario is still among the top North American jurisdictions for employment in this sector, but as sectors shift and technologies evolve, the regulatory response to deal with manufacturingrelated air, water and waste emissions also requires increasing sophistication. MOE estimates that the known regulated community addressed by MOE’s current compliance programs is greater than 150,000 systems, facilities and activities, and that its risk-based inspections cover only 4 to 5 per cent of this community annually. Ministry staff must also apply much higher levels of technical and science skills to their work. For example, in a previous generation, inspectors gauged black smoke by eye. Today, ultra-fine particulate emissions can also be monitored by high-tech equipment and predicted by complex mathematical models. Meanwhile, transportationrelated air emissions have grown in relative importance, contributing to a need for better monitoring along traffic corridors. Land use conflicts are increasingly common and difficult, as industrial, rural and residential zones are pushed up against each other. Population pressures in southern Ontario have also made the protection of biodiversity and other natural heritage concerns more challenging.
Tackling an Expanding Array of New Issues
Climate change, biodiversity, invasive alien species and oversight of new development in the Far North are all very complex challenges. They require not just technical responses, but also multi-ministry and multijurisdictional co-ordination, the education and engagement of citizens, and the deployment of significant resources. Major new legislative initiatives, including the Lake Simcoe Protection Act, 2008, the 'Endangered Species Act, 2007, the Green Energy Act, 2009, and the Far North Act, 2010 have been passed in the last few years, all requiring significant resources for effective implementation. With the contemplated expansion of mining, forestry and hydro facilities into Ontario’s Far North, both MOE and MNR will need to have a strong regulatory presence, overseeing site-specific water takings, air emissions, wastewater discharges and habitat alterations. For example, the ECO’s 2009/2010 Annual Report pointed to instances where MNR had to step in and shut down an illegally constructed mining camp and airstrips in the Far North.
Public expectations for transparency, accessible background information and consultative approaches to decision making have also increased greatly. All leading jurisdictions have experienced these trends in public participation, and rightly so, since these inclusive approaches strengthen both accountability and environmental protection. However, they also require that the regulating agencies have the capacity to deliver.
Capacities: Not Keeping Pace
To respond to the increased scope and complexity of many files, both ministries require adequate levels of funding, staffing and expertise. However, as the ECO reported in our 2007 Special Report “Doing Less with Less,” the overall capacities of MOE and MNR have not kept pace, in real terms, with their increased responsibilities. The ECO concluded in 2007 that MOE and MNR “have not been allocated financial resources in accordance with the growth in the overall operating budget of the Ontario Government…. 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 fact, the ECO’s review of the operating budgets of both ministries between 1992 and 2007, under the administration of four governments, clearly showed that by 2007 neither ministry had fully recovered from cuts made in the early to mid-1990s.
In the ECO’s 2007/2008 Annual Report, we reported on some encouraging signs of rebuilding at both MOE and MNR. Based on the 2008/2009 estimates, MOE’s three main programs – Air, Water and Waste – had all received substantial funding increases. MNR’s budget had also received increases for Forest Management, Fish and Wildlife (now the Biodiversity Program), and Enforcement.
Has this improving trend been sustained, or was it a short-term blip? To determine the answer to this question, the ECO has updated its 2007 analysis by examining the most recent three years of operating budgets for both ministries. Since some of MNR’s forestry management responsibilities and operating budget were transferred to the Ministry of Northern Development, Mines and Forestry (MNDMF) in 2008/2009, the MNR comparison includes MNDMF’s operating budget for forestry. In the analysis that follows, some historical dollar figures have been revised to reflect recent input from MNR and MOE and, unless otherwise noted, all dollar figures are in 2009 constant dollars.
For the fiscal year ending March 31, 2011, the Ontario government’s total planned operating budget was approximately $119 billion, a 72 per cent increase since 1992/1993. During that same period, however, MNR’s operating budget (including MNDMF’s forestry program) declined by 22 per cent and MOE’s budget dropped by 45 per cent (in 2009 constant dollars).
As seen in Table 5.1.1, the Ontario government has allocated just 0.31 per cent of its 2010/2011 total operating budget to MOE and 0.45 per cent to MNR (not including the forestry budget transferred to MNDMF). In other words, only approximately three-quarters of one cent of every tax dollar to be spent on government operations in 2010/2011 were allocated to the environment and natural resources. By contrast, of every tax dollar assigned to operations, the Ontario government has allocated 37.57 cents to health care and 17.97 cents to education.
| Table 5.1.1 | ||
| Planned Allocations of the 2010/2011 Ontario Provincial Budget | ||
| Ministry | Total Operation Estimate (Millions of Dollars) | Per Cent of Overall Budget |
|---|---|---|
| Health and Long-Term Care, Health Promotion | $44,634 | 37.57% |
| Education | $ 21,349 | 17.97% |
| Finance | $14,480 | 12.19% |
| Community and Social Services | $ 9,222 | 7.76% |
| Training, Colleges and Universities | $7,177 | 6.04% |
| Children and Youth Services | $4,652 | 3.92% |
| Revenue | $4,201 | 3.54% |
| All Other Operating Expenses | $2,640 | 2.22% |
| Community Safety and Correctional Services | $2,268 | 1.91% |
| Government Services | $2,177 | 1.83% |
| Transportation | $1,401 | 1.18% |
| Energy and Infrastructure | $976 | 0.82% |
| Agriculture, Food and Rural Affairs | $862 | 0.73% |
| Tourism and Culture | $650 | 0.55% |
| Municipal Affairs and Housing | $625 | 0.53% |
| Northern Development, Mines and Forestry1 | $574 | 0.48% |
| Natural Resources2 | $536 | 0.45% |
| Environment | $366 | 0.31% |
| Total | $118,790 | 100.00% |
1 The MNDMF allocation includes the operating funds allocated to the forestry program, which was formerly housed within MNR. 2 The MNR allocation includes funds from the Special Purpose Accounts (SPAs) but not the forestry program.
In fact, as shown in Figure 5.1.1, the combined percentage allocation to MNR and MOE of the overall operating budget has declined by over 64 per cent during the review period from a high of 2.15 per cent in 1992/1993 to a low of 0.76 per cent in 2010/2011.
Figure 5.1.1. Total MOE and MNR per cent allocation of Ontario’s operating budget.
MNR Continues to Operate on Fewer Dollars than in 1992/1993
Figure 5.1.2 shows that in 1992/1993, the first year of this review, MNR had its highest operating budget, $795 million. In the following years, it declined sharply (with a few exceptions) and then levelled off. From 2004/2005 to 2007/2008, the year after “Doing Less with Less” was published, MNR’s operating budget improved to $747 million. However, since 2007/2008, it has declined to a planned $620.4 million (including the Forestry Program now housed in MNDMF) in 2010/2011, about 22 per cent less than in 1992/1993 (in 2009 constant dollars).
Included in MNR’s numbers are the Special Purpose Accounts (SPAs) for the Fish and Wildlife and Parks programs. Revenue earned from fishing and hunting licences, tags, park admissions, etc., are directed to these accounts and, in 2010/2011, will be used to fund approximately 70 per cent of the Fish and Wildlife program and 83 per cent of the Parks program.
Figure 5.1.2. Adjusted and nominal operating budgets for MNR including forestry from 1992/1993 to 2007/2008 and MNR minus forestry
plus MNDMF forestry from 2008/2009 to 2010/2011.
MOE Continues to Operate on Fewer Dollars than in 1992/1993
Figure 5.1.3 shows that in 1992/1993, MOE had its highest operating budget, $692.3 million. It then declined sharply, leveled off, improved for a few years, and then declined abruptly in 2006/2007 to $292.8 million. Since then, it has slowly improved. Still, in 2010/2011, MOE's planned operating budget is $379.3 million, 45 per cent less than 1992/1993 (in 2009 contant dollars).
Figure 5.1.3. Adjusted and nominal operating budgets for MOE from 1992/1993 to 2010/2011.
ECO Comment
The ECO’s evaluation shows that since the early 1990s, Ontario has allocated a declining percentage of its overall operating budget to oversight of the environment and natural resources. Any incremental increases in funding to MOE and MNR have not changed this basic, troubling observation.
The combined strains of increasing complexity and expanding responsibilities have been evident at both ministries. Engagement on new and emerging issues seems an ongoing challenge. Examples include: nanotechnology, with uncertain implications for the natural environment (see Part 10.1 of the ECO’s 2008/2009 Annual Report); shale gas extraction, a new industry burgeoning in nearby jurisdictions, with potential for significant environmental impacts (see this Annual Report, Part 6.1); biofuels, another nascent industry with many unknowns for forest soils and long-term sustainability (see Part 4.3 of the ECO’s 2008/2009 Annual Report); and the assessment of cumulative impacts. Overstretched resources may well be part of the reason for a slow response on such files.
MOE and MNR have repeatedly been expected to deliver ambitious programs by realigning existing resources. The ministries struggle to find efficiencies, to streamline their operations (see Part 5.2: MOE’s Modernization of Approvals), and to redirect operational dollars and staff to the latest important priorities. As a result, ongoing core responsibilities can go begging, a problem amply illustrated throughout the ECO’s 2009/2010 Annual Report. The ECO noted, for example, that MNR’s current afforestation efforts in southern Ontario pale in comparison to previous efforts. The ministry’s response acknowledged the need to increase afforestation, but noted it “would require significant capacity increases.” The ECO was also “dismayed that many ministry offices, particularly those of MNR … are locked and inaccessible,” making it almost impossible to view site-specific approval documents related to proposals posted to the Environmental Registry. MOE’s oversight of municipal wastewater effluents was similarly found lacking in public transparency: “MOE, which regulates wastewater effluents, has not published an overview of basic performance parameters, such as pollution loadings and overall compliance rates, since 1993.” The ECO also raised concerns about oversight of older landfill sites – concerns to which the ministry is now responding.
The evidence is strong that long years of “streamlining” and “realigning” at MNR and MOE, coupled with steadily growing responsibilities, have brought about a crisis of capacity in those ministries. Capacity is stretched too thin on core responsibilities. Ontario needs to make a long-term commitment to gradually rebuild MOE and MNR and to spend considerably more than one cent of its tax dollar on protecting our environment and our natural heritage.
For ministry comments, please see Appendix C.
| Previous section: 'Part 5 – Getting on with the Business of the Environment |
| Next section: Modernization of MOE’s Approvals Framework |
| This is an article from the 2010/11 Annual Report to the Legislature from the Environmental Commissioner of Ontario. |
Citing This Article:
Environmental Commissioner of Ontario. 2011. "Less and Less: Budgets for MOE and MNR not Meeting Needs." Engaging Solutions, ECO Annual Report, 2010/11. Toronto: The Queen's Printer for Ontario. 80-85.
