#1Ontario & Province of Ontario Presentation November 2023 Ontario Financing Authority www.ofina.on.ca#2Ontario Overview • . The Province of Ontario is located in a prime economic area with excellent international connectivity and close ties to the United States. In 2022, Ontario had a population of 15.1 million. with nominal GDP estimated at over $1 trillion, both representing almost 40 per cent of Canada. Ontario has a diverse advanced economy, with technology-led manufacturing, extensive financial and business services, and globally recognised higher education and scientific research. It has a relatively smaller primary resource sector compared to the rest of Canada. The province has direct taxation powers and stable growth, and is a major beneficiary in Canada of international investment and worker migration. Services account for about 77 per cent of the overall economy. VANCOUVER Ontario TORONTO CHICAGO NEW YORK 1#32023 Ontario Economic Outlook and Fiscal Review • The government is projecting deficits of $5.6 billion in 2023-24 and $5.3 billion in 2024-25 followed by a surplus of $0.5 billion in 2025-26. • ● The 2023 Ontario Economic Outlook and Fiscal Review planning assumption is for real GDP to rise 1.1 per cent in 2023, 0.5 per cent in 2024, 2.0 per cent in 2025 and 2.9 per cent in 2026. The planning assumption is for nominal GDP to rise by 3.6 per cent in 2023, 2.9 per cent in 2024, 4.2 per cent in 2025 and 4.8 per cent in 2026. Ontario's 2023-24 net debt-to-GDP ratio is now forecast to be 38.4 per cent, an increase of 0.6 percentage points from the forecasted 37.8 per cent in the 2023 Budget, mainly due to higher than previously projected deficits. Ontario's net debt-to-GDP is now forecast to be 39.1 per cent in 2024-25 and 38.7 per cent in 2025-26. As of the release of the 2023 Ontario Economic Outlook and Fiscal Review, Ontario has completed $15 billion of its $34.7 billion long-term borrowing program. Ontario's long-term borrowing requirement for 2023-24 increased by $7.2 billion from the 2023 Budget forecast, primarily due to higher than previously forecasted deficits in 2022-23 and 2023-24. Ontario 2#4Ontario's Economic Outlook The Ministry of Finance's GDP planning projections are set slightly below the average of private-sector forecasts for the purposes of prudent fiscal planning. Economic Summary (Per Cent) 2022 2023p 2024p 2025p 2026p Real GDP Growth 3.7 1.1 0.5 2.0 2.8 Nominal GDP Growth 9.2 3.6 2.9 4.2 4.8 Employment Growth 4.6 2.3 0.8 1.5 1.9 CPI Inflation 6.8 3.7 2.5 2.1 2.0 Ontario p = Ontario Ministry of Finance planning projection based on external sources as of September 29, 2023. Sources: Statistics Canada and Ontario Ministry of Finance. 3#5Ontario's Diverse Economy • Ontario has a diverse economy, with extensive financial and business services, manufacturing and a smaller primary sector compared to the rest of Canada. Structure of the Ontario Economy, 2022 (Per Cent Share of Nominal GDP) Public Primary Other Services². 2.2% Utilities Administration. 7.4% 7.6% 1.8% Construction 7.9% Services (77.1% of GDP) Goods (22.9% of GDP) Health & Education 12.8% Professional & Scientific 8.1% Manufacturing 11.0% Wholesale & Retail Trade 11.2% Transportation & Warehousing 3.6% Real Estate & Information & Renting & Leasing1 12.6% Finance & Insurance 10.0% Cultural 3.8% 1 Includes estimate of imputed rental income from owner occupied dwellings. 2 Other services include: management of companies and enterprises; administrative and support, waste management and remediation services; arts, entertainment and recreation; accommodation and food services; and other services. Source: Statistics Canada. Ontario Note: Numbers may not add due to rounding. 4#6Ontario Unemployment Rate Remains Low Unemployment Rate (Per Cent) 14.0 12.0 10.0 8.0 6.0 4.0 2.0 1976 Ontario 1978 1980 1982 14.0% (May 2020) Ontario Unemployment Rate Historical Average 9.6% (June 2009) Historical Average 7.4% Source: Statistics Canada. 1984 986 1988 1990 1992 1994 4.7% (June and October 1989) 1996 1998 2000 2002 2004 2006 www 2008 2010 2012 2014 2016 2018 2020 2022 6.0% (September 2023) 5#7Ontario GDP Growth Projected to Normalize Nominal GDP Growth (Per Cent) 12 10.3 10 9.2 8 5.1 5.5 CO 6 ■GDP Inflation ■Real Growth 4.8 4.2 3.6 4 5.2 2.0 2.9 2.2 3.7 2.5 2 2.8 2.4 2.0 1.1 0.5 0 2021 2022 2023p 2024p 2025p 2026p Ontario p = Ontario Ministry of Finance planning projection based on external sources as of September 29, 2023. Sources: Statistics Canada and Ontario Ministry of Finance. CO 6#8($2012 Billions) 1,000 Ontario GDP Scenario Forecasts Real GDP Nominal GDP ($ Billions) 1,300 980 960 1,250 940 1,200 920 Faster 900 1,150 880 Planning 1,100 860 Slower 840 820 800 2021 2022 2023p 2024p 1,050 1,000 2025p 2026p 950 2021 2022 2023p 2024p 2025p 2026p Faster Planning Slower Real GDP Growth Scenarios 2023p 2024p 2025p 2026p Nominal GDP Growth Scenarios 2023p 2024p 2025p 2026p (Per Cent) (Per Cent) Faster Growth Scenario 1.7 2.1 2.3 3.1 Faster Growth Scenario 4.5 5.3 4.7 5.3 Planning Projection 1.1 0.5 2.0 2.8 Planning Projection 3.6 2.9 4.2 4.8 Slower Growth Scenario 0.7 (0.9) 1.9 2.7 Slower Growth Scenario 2.9 0.7 3.9 4.5 Ontario p = Ontario Ministry of Finance planning projection based on external sources as of September 29, 2023 and alternative scenarios. Source: Ontario Ministry of Finance. 7#9Fiscal Outlook Fiscal Summary ($ Billions) Revenue Expense Actual Medium-Term Outlook 2022-23 2023-24 2024-25 2025-26 192.9 201.8 206.7 220.0 Programs 186.4 193.0 196.2 202.3 Interest on Debt 12.4 13.4 14.3 15.2 Total Expense 198.8 206.4 210.5 217.5 Surplus/(Deficit) Before Reserve (5.9) (4.6) (3.8) 2.5 Reserve 1.0 1.5 2.0 Surplus/(Deficit) (5.9) (5.6) (5.3) 0.5 Ontario Note: Numbers may not add due to rounding. Sources: Ontario Treasury Board Secretariat and Ontario Ministry of Finance. 8#10Composition of Total Revenue 2023-24 Revenue $201.8 Billion Sales Tax $37.7B 18.7% Other Taxes $28.1B 13.9% Corporations Tax $26.0B 12.9% Ontario Note: Numbers may not add due to rounding. Source: Ontario Ministry of Finance. Personal Income Tax $49.4B 24.5% Government of Canada Transfers Income from Govt. Other Non-Tax Business Enterprises Revenue $18.7B 9.3% $6.8B 3.4% $35.1B 17.4% 6#11Composition of Total Expense 2023-24 Total Expense $206.4 Billion Other Programs $40.1B 19.4% Justice Sector $5.5B 2.6% Children, Community and Social Services Sector $19.4B 9.4% Interest on Debt $13.4B 6.5% Postsecondary Education Sector $12.1B 5.9% Education Sector¹ $34.7B 16.8% Health Sector $81.2B 39.3% Ontario 1 Education excludes Teachers' Pension Plan. Teachers' Pension Plan expense is included in Other Programs. Note: Numbers may not add due to rounding. Sources: Ontario Treasury Board Secretariat and Ontario Ministry of Finance. 10 10#12Ontario's Borrowing Outlook ($ Billions) Current Outlook Medium-Term Outlook 2023 Budget In-Year Change 2023-24 2024-25 2025-26 Deficit/(Surplus) 1.3 4.3 5.6 5.3 (0.5) Investment in Capital Assets 13.6 0.0 13.6 18.7 19.0 Non-Cash and Cash Timing Adjustments (9.2) 7.9 (1.3) (11.2) (12.0) Loans to Infrastructure Ontario 0.1 I 0.1 0.1 0.2 Other Net Loans/Investments 0.1 (0.0) 0.1 (1.0) (0.2) Debt Maturities/Redemptions 31.2 (0.0) 31.2 28.0 33.1 Total Funding Requirement 37.0 12.2 49.2 39.9 39.5 Decrease/(Increase) in Short-Term (2.5) (2.5) Borrowing Increase/(Decrease) in Cash and Cash Equivalents 5.0 (5.0) I Pre-borrowing in 2022-23 for 2023-24 (14.5) (14.5) Total Long-Term Public Borrowing 27.5 7.2 34.7 37.4 37.0 Ontario Note: Numbers may not add due to rounding. Source: Ontario Financing Authority. 11#13Borrowing Outlook Scenarios for Long-Term Borrowing Total Long-Term Borrowing ($ Billions) 50.0 45.0 40.0 44.0 37.4 36.8 34.7 45.8 Slower Growth Scenario 37.0 Planning Projection 35.0 32.2 32.4 30.0 30.2 Faster Growth 25.0 27.0 Scenario 20.0 15.0 2022-23 2023-24 Ontario Sources: Ontario Financing Authority and Ontario Ministry of Finance. 2024-25 2025-26 12#142023-24 Borrowing Program Canadian Dollar Syndicated Bonds $15.0B >99% $15.0 Billion Issued Australian Dollar Bond $0.03B <1% Canadian Dollar Foreign Currencies $15.0B $0.03B >99% <1% Ontario Note: As of November 2, 2023. Numbers may not add due to rounding. 13 33#15Domestic and International Borrowing Canadian Dollar Foreign Currencies 2023-24 Borrowing Remaining 59.8 As of November 2, 2023 Total Long-Term Borrowing ($ Billions) 60 50 50 20.7 41.1 39.6 39.5 34.7 33.9 9.2 9.0 10.6 32.1 3.7 19.7 43.8 39.9 39.9 40 40 36.6 36.0 34.9 8.4 32.1 30 22.4 6.6 28.7 16.4 6.5 10.2 30 6.3 27.0 12.8 7.1 20 20 9.7 18.0 2.6 39.1 0.03 31.4 28.4 29.4 30.6 32.0 28.9 28.4 26.4 25.8 23.5 10 21.4 19.0 19.9 21.1 15.4 15.0 0 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 14% 34% 51% 41% 19% 28% 18% 21% 19% 26% 38% 23% 27% 35% 22% 12% <1% Foreign Domestic 86% 66% 49% 59% 81% 72% 82% 79% 81% 74% 62% 77% 73% 65% 78% 88% >99% Weighted- Average 12.1 8.6 8.1 12.8 13.0 12.4 13.6 14.1 14.2 13.9 12.1 12.9 14.5 12.0 14.5 15.0 17.2 Term Ontario Note: Numbers may not add due to rounding. Source: Ontario Financing Authority. 14#16Weighted-Average Term of Borrowings Going back to the beginning of fiscal 2010-11, Ontario has issued $129.8 billion of bonds 30 years or longer to lock in low interest rates. As of November 2, 2023 Average Term (Years) 18 Weighted Borrowing Average Term Debt Portfolio Average Term 17.2 16 14.5 15.0 14.5 14.1 14.2 13.9 14 13.6 12.8 13.0 12.9 12.4 12.1 12.0 12 11.4* 10.7 10.9 10.9 10.7 10.7 10.9 10.8 10.9 11.1 10.0 10.1 10.1 10.4 9.7 10 8.1 8 6 4 2 0 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 *As of September 30, 2023. Ontario Source: Ontario Financing Authority. 15#1751.7* 46.2 47.2 Liquidity and Short-Term Borrowing Capacity 60 Average Unrestricted Liquid Reserve Levels ($ Billions) Liquid Reserves ■ 2023-24 Liquid Reserves Year-End Target 50 50 40 40 30 30 20 20 Liquid Reserve Levels 24.9 - 23.3 23.6 21.7 21.1 19.4 20.2 14.4 Average: $29.7 Billion 10 0 32.7 32.3 30.1 36.2 32.8 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 *As of September 30, 2023. ($ Billions) Currency Maturity Authorized Outstanding Available *Regular issuance of 3M, 6M and 1Y T-Bills C$ T-Bill Program Canadian Dollars 1 day-3 years* C$46.0 C$23.2 C$22.8 U.S.$ Commercial Paper Program U.S. Dollars 1-270 day(s) Total C $15.0 C$61.0 C$1.9 C$25.1 C$13.1 C$35.9 Note: As of October 31, 2023. Numbers may not add due to rounding. Ontario 16#18Domestic Borrowing Program • . · Ontario bonds accounted for 67.7 per cent of Canadian provincial bond trading in 2022.1 Ontario accounted for 14.0 per cent of the FTSE Universe Bond Index, 13.6 per cent of the FTSE TMX Mid Bond Index and 22.2 per cent of the FTSE TMX Long Bond Index.² Large and diverse domestic underwriting syndicate of 12 dealers make active markets in Ontario bonds. • • Regular issuance of 5-year, 7-year, 10-year and 30-year issues, which are re-opened to achieve benchmark size. Large Order Procedure (carve-outs) to accommodate large investors (4 issues totalling $1.8 billion so far in 2023-24). Canadian dollar Benchmark Bonds (As of November 1, 2023) Term Ontario Canada 5 yr (old) 3.60% March 8, 2028 $5.50B 3.50% March 1, 2028 $15.00B 5 yr (new) 3.40% September 8, 2028 $2.00B 3.75% September 1, 2028 $20.00B 7 yr 2.70% June 2, 2029 $9.33B 2.25% June 1, 2029 $12.30B 10 yr (old) 3.75% June 2, 2032 $9.65B 2.25% December 1, 2032 $21.00B 10 yr (new) Long (old) Long (new) 3.65% June 2, 2033 3.75% December 2, 2053 4.15% December 2, 2054 $7.75B 2.75% June 1, 2033 $19.00B $12.40B 2.00% December 1, 2051 $51.80B $3.15B 2.00% December 1, 2053 $32.00B Ontario 1 Investment Industry Regulatory Organization of Canada (IIROC) Market Trade Reporting System - Provincial Bond Total Trading. 2 PC Bond, as of December 31, 2022. 17#19• Foreign Issuance - U.S. Dollar · The Province regularly accesses foreign markets to diversify its borrowing program and expand its investor base. The U.S. dollar is a core market for Ontario. USD by Geography Other 8% Middle East / Africa 2% USD by Investor Type Banks/Trust Companies 32% Asia Pacific 15% Canada 15% Europe 22% United States 37% Mutual Funds / Fund Managers 3% Other 5% Insurance Companies / Pension Funds Central Banks 15% 7% U.S. Dollar Issues Term 5 year 10 year Issue Date and Coupon 3.10% May 12, 2022 2.125% January 13, 2022 Amount (U.S.$) $2.25B $1.50B $1.00B 1.80% October 6, 2021 10 year $3.00B 5 year 1.05% April 7, 2021 $1.50B 10 year 1.60% February 18, 2021 Ontario Note: Data for USD by Geography and Investor Type since 2010. Source: Ontario Financing Authority. Asset Managers 23% Government Agencies / Supranationals 15% 18#20Foreign Issuance • Dependent on market conditions the Province borrows in euros, Japanese yen, pound sterling, Swiss francs and Australian dollars. • Ontario is moving towards the pound sterling becoming a core foreign market for Ontario joining the regular large-sized bond issuance in euros. Euros Pound Sterling & Swiss Franc Term Issue Date and Coupon Amount (Euros) Term Issue Date and Coupon Amount (Sterling/Swiss Franc) 10 year 0.25% June 1, 2021 €1.00B year 2.25% May 17, 2022 £0.50B 10 year 0.01% November 17, 2020 €2.50B 12 year 0.05% April 21, 2021 CHF 0.25B 7 year 0.38% April 1, 2020 €1.00B 5 year 0.25% January 6, 2021 £1.75B Ontario 1 19#21Ontario's Green Bonds • Ontario is currently the largest issuer of Canadian dollar Green Bonds: 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 TOTAL $1.25 $2.75 $4.5 $2.5 $15.0 Billion Billion Billion Billion Billion སྟེ $500 $750 $800 $1.0 $950 Million Million Million Billion Million . Green Bonds serve as an important tool to help Ontario finance public transit initiatives, extreme weather- resistant infrastructure, and energy efficiency and conservation projects. Overall Allocation By Framework Category Total $15.0 Billion 28 PROJECTS Clean Energy Climate Transportation Efficiency & Conservation Adaptation & Resilience 79% of funds 18% of funds 3% of funds 8 PROJECTS 19 PROJECTS 1 PROJECT Ontario Note: Allocated Funding from Green Bond Program as of February 2023. Numbers may not add due to rounding. 20 20#22Net Debt-to-GDP Per Cent Planning Projection Faster Growth Scenario Slower Growth Scenario 43.0 45 Net Debt-to-GDP Target <40.0% 40 40 35 35 32.1 50 30.1 30.5 30 40.3 39.7 39.3 36.6 40.5 39.7 39.5 40.0 38.2 39.2 32.3 34.5 31.2 28.2 26.6 28.3 25 20 21.1 17.1 15 13.4 10 Ontario 1993-94 1994-95 1995-96 2000-01 2001-02 1990-91 1991-92 1992-93 1996-97 1997-98 1998-99 1999-00 2002-03 2003-04 2004-05 2005-06 Sources: Statistics Canada and Ontario Ministry of Finance. Actuals 2006-07 2007-08 2008-09 2009-10 2010-11 29.4 29.3 27.5 27.8 26.6 41.0 41.5 26.8 26.8 27.1 27.8 38.3 38.9 38 38.4 39.1 37.9 38.7 37.1 35.7 2022-23 2023-24 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2023-24 2024-25 2025-26 2019-20 2020-21 2021-22 2022-23 2024-25 2025-26 Current Outlook & Medium-Term Outlook 21#23Net Debt-to-Revenue Per Cent -Planning Projection Faster Growth Scenario 250 200 Net Debt-to-Revenue Target <200% 150 126 Slower Growth Scenario 234 225 226 225 214 208 226 216 223 220 189 207 192 189 188 - 187 182 183 168 184 183 162 176 177 157 170 146 164 153 100 104 78 50 50 1990-91 1991-92 1992-93 222 220 208 209 211 206 204 199 203 187 2022-23 2023-24 2017-18 2018-19 2019-20 2020-21 2021-22 2016-17 2024-25 2025-26 2025-26 2022-23 2023-24 2024-25 1993-94 1994-95 1995-96 1996-97 2003-04 2004-05 2005-06 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2006-07 2007-08 2008-09 Sources: Public Accounts of Ontario (1990-1991 to 2022-2023) and Ontario Financing Authority. Actuals 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Ontario Current Outlook & Medium-Term Outlook 22 22#24IOD-to-Revenue Per Cent → Planning Projection Faster Growth Scenario Slower Growth Scenario 17 15.5 7.4 7.3 15 14.8 14.5 14.3 15.0 14.2 13.9 14.6 6.9 6.9 6.7 14.2 12.9 6.7 6.4 13 6.6 6.6 12.9 10.8 11 9 8.8 7.7 11.1 9.7 6.3 2022-23 2023-24 2024-25 2025-26 9.1 9.1 8.9 8.4 8.5 8.9 9.0 8.8 8.9 8.7 7.9 8.0 8.3 8.1 7.5 6.8 5 1990-91 7 IOD-to-Revenue Target <7.5% 1991-92 1994-95 1996-97 1992-93 1993-94 1995-96 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Sources: Public Accounts of Ontario (1990-1991 to 2022-2023) and Ontario Financing Authority. Actuals Ontario 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2023-24 2025-26 2022-23 2024-25 Current Outlook & Medium-Term Outlook 23 23#254.0 2.0 0.0 Per Cent 12.0 10.0 8.0 6.0 Effective Interest Rate (Weighted Average) on Total Debt 10.9 10.7 10.1 9.5 9.8 9.4 9.0 9.0 8.6 8.4 8.2 7.6 7.2 6.7 6.4 6.16.0 5.8 5.2 4.6 4.5 4.4 1991-92 1994-95 1996-97 1999-00 1990-91 1992-93 1993-94 1995-96 1997-98 1998-99 2000-01 Ontario 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 4.1 3.9 3.7 3.6 3.5 3.6 3.6 3.4 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 *As of September 30, 2023. Sources: Public Accounts of Ontario (1990-1991 to 2022-2023) and Ontario Financing Authority. 2017-18 2015-16 2016-17 2018-19 2019-20 2020-21 2021-22 3.0 3.0 2022-23 2023-24 24 224 3.2 3.3*#26Average Annual Ontario Borrowing Rates Per Cent 5.0 4.8 4.6 4.4 4.2 4.0 3.78 3.8 3.6 3.4 3.2 3.0 2022-23 4.65 4.60 4.60 Ontario Source: Ontario Financing Authority. 2023-24 2024-25 2025-26 25 25#27Interest on Debt Expense Lower than 2023 Budget Forecast $ Billons 15.5 15.0 14.5 14.0 2023 Ontario Economic Outlook and Fiscal Review 2023 Budget 15.2 15.1 14.4 14.1 14.3 13.4 13.5 13.4 13.0 12.5 12.4* 12.0 2022-23 Ontario *Public Accounts of Ontario 2022-2023. Source: Ontario Financing Authority. 2023-24 2024-25 2025-26 26 26#28Credit Ratings Rating Agencies Long-term Rating Short-term Rating Outlook MOODY'S Aa3 P-1 positive Fitch Ratings AA- F1+ stable AA (low) R-1 (mid) positive DBRS STANDARD & POOR'S A+ A-1 positive Ontario 27 27#29Ontario Investor Relations Ontario Financing Authority 1 Dundas Street West, Suite 1200 Toronto, Ontario M5G 1Z3 Canada Telephone: (416) 325-8000 Visit www.ofina.on.ca & subscribe to our email alert service to receive the latest province of Ontario updates Cette présentation est également disponible en français Legal Notice This presentation was compiled by the Ontario Financing Authority. This information is intended for general information purposes only and does not constitute an offer to sell or a solicitation of offers to purchase any security in any jurisdiction. It has not been approved by any securities regulatory authority and it is not sufficient for the purpose of deciding to purchase securities. It may have errors or omissions resulting from electronic conversion, downloading or unauthorized modifications. Statements in this presentation may be "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve uncertainties, risks, and other factors which could cause the state of Ontario's economy to differ materially from the forecasts and economic outlook contained expressly or implicitly in such statements. The province of Ontario undertakes no obligation to update forward-looking statements to reflect new information, future events or otherwise, except as may be required under applicable laws and regulations. No warranty is made as to the accuracy or completeness of information contained herein as of any date other than the date it was posted or released.