The Ontario government spent $2.6 billion less than planned in the first quarter, with lower investments in health and electricity support programs, according to the province's budget watchdog.

The Ontario Financial Accountability Office (FAO) released a report today, Wednesday, stating that the province spent approximately $40.2 billion in the first three months of the 2023-2024 fiscal year, between April 1 and June 30. The Progressive Conservatives initially allocated $42.8 billion for spending during this period.

The lower-than-expected spending in the health sector can be largely attributed to this. The FAO's review of unverified expenditures concluded that the government spent nearly $1.2 million less than planned, including reductions in health capital, long-term care programs, and drug programs.

The province indicated that the impact on drug programs is largely due to the "delay in the release" of payments in June 2023.

The government also spent about $658 million less than planned for electricity price relief and $75 million less on financial support and employment support, which includes Ontario’s disability support program.

Approximately $203 million more was spent on transportation - including funding for Metrolinx and other municipal infrastructure - while $25 million more was spent on education and $95 million was added to the justice sector.

The FAO found that about $849 million from emergency funds was diverted to various programs by the end of the first quarter. As of June 30, the balance within the emergency fund was approximately $3.2 billion.

It's not uncommon for governments to change their spending plans throughout the year. In August, the province's financial watchdog found that the government had spent around $7 billion less than planned. Any surplus can be used to reduce the deficit and net debt in the province.

At that time, the acting financial accountability officer told reporters that the province's underspending was "a bit above average," noting that the average over the past four years was around $5.9 billion.

According to the FAO, the province's spending for the entire 2023-2024 fiscal year has decreased by $32 million so far, totaling about $197.3 billion. This includes a planned increase of $358 million for the electric vehicle battery manufacturing sector.

However, Jeffrey Novak, the acting financial accountability officer, indicated on Wednesday that the first quarter of the fiscal year "does not necessarily reflect the expected spending results for the entire fiscal year."

"The first quarter is always a little volatile in terms of how spending is going. Novak said, I think there are things we will be watching."

"It gives us an early look at how the year is going and it's an opportunity to follow up and see how the year is progressing and how things are expected to end by the end of the year."