#1Ontario Province of Ontario Presentation March 24, 2021 Ontario Financing Authority www.ofina.on.ca#2Overview This presentation provides an update on the below, following the release of the 2021 Budget Fiscal Plan Economy Borrowing Program Debt Management Ontario 1#3Ontario's Fiscal Plan Fiscal Summary ($ Billions) Actual Interim1 Medium-Term Outlook 2019-20 2020-21 2021-22 2022-23 2023-24 156.1 151.8 154.0 160.0 167.0 Revenue Program Expense Base Programs² 152.3 157.7 166.3 169.7 171.1 COVID-19 Time-Limited Funding 20.1 6.7 2.8 Total Program Expense 152.3 177.8 173.0 172.5 171.1 Interest on Debt 12.5 12.5 13.1 13.7 14.6 Total Expense 164.8 190.3 186.1 186.2 185.6 Surplus/(Deficit) Before Reserve (8.7) (38.5) (32.1) (26.2) (18.7) Reserve 1.0 1.5 1.5 Surplus/(Deficit) (8.7) (38.5) (33.1) (27.7) (20.2) Ontario Note: Numbers may not add due to rounding. Sources: Ontario Treasury Board Secretariat and Ontario Ministry of Finance. 2#4Composition of Revenue 2021-22 Revenue $154.0 Billion Other Taxes $26.4B 17.2% Sales Tax $27.6B 17.9% Personal Income Tax $36.4B 23.6% Government of Canada Transfers $27.4B Corporations Tax $14.4B 9.3% Other Non-Tax Revenue $17.2B Income from Govt. Business Enterprises $4.5B 2.9% 11.2% Ontario Note: Numbers may not add due to rounding. Source: Ontario Ministry of Finance. 17.8% 3#5Composition of Total Expense 2021-22 Total Expense $186.1 Billion Ontario COVID-19 Time- Limited Funding $6.7B1 3.6% Interest on Debt $13.1B 7.1% Other Programs $31.9B 17.2% Justice Sector $4.8B 2.6% Children's and Social Services Sector $17.8B 9.6% Postsecondary Education Sector $10.7B 5.7% Health Sector $69.8B 37.5% Education Sector² Note: Numbers may not add due to rounding. Sources: Ontario Treasury Board Secretariat and Ontario Ministry of Finance. $31.3B 16.8% 4#6Extraordinary Contingencies and COVID-19 Time-Limited Funding ($ Millions) Interim¹ 2020-21 1 Medium-Term Outlook 2021-22 2022-23 2023-24 COVID-19 Time-Limited Funding and Extraordinary Contingencies One-Time COVID-19 Health Sector Expense 3,052 COVID-19 Health Contingency Fund 5,294 Pandemic Fund Support for People and Jobs Fund 4,000 2,000 4,966 1,000 800 Other COVID-19 Time-Limited Funding 6,793 1,730 25 Total COVID-19 Time-Limited Funding and Extraordinary Contingencies 20,104 6,730 2,825 Remaining Balances as of the 2021 Budget COVID-19 Health Contingency Fund Pandemic Fund Support for People and Jobs Fund Total Remaining Balances as of the 2021 Budget 1 Interim represents the 2021 Budget projection for the 2020-21 fiscal year. Note: Numbers may not add due to rounding. Sources: Ontario Treasury Board Secretariat and Ontario Ministry of Finance. Ontario I 2,000 800 2,800 5#7Economic Outlook Scenarios Real GDP ($2012 Billions) 900 850 800 Faster Growth Scenario Planning Projection Slower Growth Scenario 750 2019 2020e 2021p 2022p 2023p 2024p Ontario e = estimate; p = Ontario Ministry of Finance projections. Sources: Statistics Canada and Ontario Ministry of Finance 6 00#8Ontario's Recovery Plan - Scenarios • The 2021 Budget presents two alternative Faster Growth and Slower Growth scenarios that the economy could take over the next several years. Medium-Term Outlook Recovery Plan $ Billions 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 5.0 1.2 0.9 0 (5.0) (3.2) (3.6) (4.0) (10.0) (6.9) (7.5) (8.1) (10.5) (11.2) (15.0) (12.0) (14.1) (14.2) (15.2) (20.0) (17.2) (18.2) (20.2) (20.7) (25.0) (23.2) (23.0) (30.3) (25.4) (30.0) 27.7) (33.1) (31.5) (35.0) ■2021 Budget Surplus/(Deficit) Outlook Surplus/(Deficit) under Faster Growth Scenario Surplus/(Deficit) under Slower Growth Scenario (34.9) Ontario 0.8 7#9Labour Market Employment (Thousands) 7,600 7,400 7,200 7,000 Employment 6,800 6,600 6,400 6,200 6,000 5,800 5.600 Ontario Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Source: Statistics Canada Aug-19 Jul-19 Sep-19 Oct-19 Unemployment Rate Unemployment Rate (Per Cent) +829,400 net new jobs since June 2020 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 8#10Ontario's Borrowing Outlook 2020-21 Medium-Term Outlook ($ Billions) Change from 2020 Budget 2020 Budget Interim¹ 2020-21 2021-22 2022-23 2023-24 Deficit/(Surplus) 38.5 38.5 33.1 27.7 20.2 Investment in Capital Assets 10.6 1.4 11.9 11.8 12.5 11.9 Non-Cash Adjustments (9.2) (9.2) (9.5) (9.5) (9.5) Loans to Infrastructure Ontario 0.2 (0.2) 0.0 Other Net Loans/Investments 0.6 (0.7) (0.1) 1.3 0.1 (1.0) Debt Maturities/ Redemptions 26.7 - 26.7 25.0 30.5 33.6 Total Funding Requirement 67.0 0.7 67.7 61.9 61.1 55.2 Decrease/(Increase) in Short-Term Borrowing (5.7) 4.7 (1.0) (6.0) (2.0) Increase/(Decrease) in Cash and Cash (1.4) (4.0) (5.4) 4.0 Equivalents Pre-borrowing in 2019-20 (7.6) (7.6) Pre-borrowing for 2021-22 - 5.2 5.2 (5.2) Total Long-Term Public Borrowing 52.3 6.7 59.0 54.7 59.1 55.2 1 Interim represents the 2021 Budget projection for the 2020-21 fiscal year. Note: Numbers may not add due to rounding. Source: Ontario Financing Authority. Ontario 9#11Range of Medium-Term Borrowing Outlook Scenarios for Long-Term Borrowing Total Long-Term Borrowing ($ Billions) 65.0 63.0 62.9 60.5 59.1 Slower Growth Scenario 61.0 59.0 59.0 56.5 57.0 54.7 55.0 54.7 53.0 55.2 Planning Projection 51.0 51.9 49.0 Faster Growth Scenario 49.2 47.0 45.0 2020-21 2021-22 2022-23 2023-24 Ontario 10 10#122020-21 Borrowing Program Canadian Dollar Syndicated Bonds $35.4B 60% Ontario Canadian Dollar Green Bonds $2.9B 5% U.S. Dollar Bonds $10.5B 18% $59.0 Billion Issued As of March 24, 2021. Numbers may not add due to rounding. Canadian Euro Bonds $5.5B 9% Dollar $38.3B 65% Foreign Currencies $20.7B Pound Sterling Bonds $4.7B 8% 35% 11 11#13Domestic and International Borrowing As of March 24, 2021 Total Long-Term Borrowing ($ Billions) 60 50 50 ■Canadian Dollar ■Foreign Currencies 59.0 39.6 39.5 33.9 9.0 10.6 43.8 39.9 39.9 40 40 36.6 36.0 34.9 8.4 32.1 22.4 6.6 30 28.7 16.4 6.5 10.2 30 6.3 27.0 12.8 7.1 20.7 20 20 9.7 18.0 2.6 38.3 31.4 30.6 28.4 29.4 28.9 26.4 25.8 23.5 10 21.4 19.0 19.9 21.1 15.4 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 Foreign 14% 34% 51% 41% 19% 28% 18% 21% 19% 26% 38% 23% 27% 35% Domestic 86% 66% 49% 59% 81% 72% 82% 79% 81% 74% 62% 77% 73% 65% 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 11.7 Term Ontario Note: Numbers may not add due to rounding. 12#14Weighted-Average Term of Borrowings • Going back to the beginning of fiscal 2010-11, Ontario has issued $102.6 billion of bonds 30 years or longer to lock in low interest rates. As of March 24, 2021 Average Term (Years) Weighted Borrowing Average Term -Debt Portfolio Average Term 16 14.5 14.1 14.2 13.9 14 13.6 12.8 13.0 12.9 12.4 12.1 11.7 12 10.7 10.9 10.9 10.7 10.7 10.9 10.7* 10.4 10.0 10.1 10.1 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 Ontario *The debt portfolio average term is on a forecast basis to fiscal year end as of January 31, 2021. 13#15• Ontario'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 TOTAL $500 $750 $800 $1.0 $950 $1.25 $2.75 $8.0 Million Million Million Billion Million Billion Billion Billion 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 $8.0 Billion Clean Energy Climate Transportation Efficiency & Conservation Adaptation & Resilience 72% of funds 25% of funds 27 PROJECTS 7 PROJECTS 19 PROJECTS Ontario 3% of funds 1 PROJECT 14#165-year 3.5 Billion USD Global Benchmark Issue Transaction Summary Issuer: Issuer Ratings: Joint Bookrunners: Size: Coupon: Settlement date: Maturity date: Offer spread: Province of Ontario Aa3/A+/AA-/AAL (all stable) BofA Securities, Citi, RBC Capital Markets, and TD Securities USD 3.5 Billion 0.625% (semi-annual) January 21, 2021 January 21, 2026 +17 bps over mid-swaps +24.6 bps over US Treasury Yield Distribution by Geography . Issuer Highlights • The $3.5 billion 5-year USD issue was Ontario's third USD benchmark transaction in fiscal year 2020-21. • The final orderbook closed in excess of USD 7.3 billion, with over 140 orders, representing the largest orderbook for any Ontario USD benchmark in history. • The deal saw broad participation from investors by geography and investor type. Investors from the EMEA region accounted for the largest share of the allocation at 54%. Investor Demand by Type 3% Bank Treasuries 11% EMEA Americas 23% 54% 35% Ontario Asia 7% 33% 34% Central Banks and Official Institutions* Asset Managers ■Pensions, Insurance Companies, Corporates Others May include government/public sector pension plans, government/public sector investment agencies/boards. 15#175-year 1.75 Billion Sterling Benchmark Issue Transaction Summary Issuer: Issuer Ratings: Joint Bookrunners: Size: Coupon: Province of Ontario Aa3/A+/AA-/AAL (all stable) BofA Securities, RBC Capital Markets, TD Securities GBP 1.75 Billion 0.25% Issuer Highlights • This transaction was Ontario's first bond offering in 2021 and ties for the largest ever SSA GBP issue. It was also the Province's second GBP benchmark issue in fiscal 2020-21. • 79 individual investors participated in the transaction and the final order book was in excess of GBP 2.6 billion. . • By investor type, asset managers led the transaction (53%) while by geography, United Kingdom saw the largest allocation (47%). Settlement Date: Maturity Date: Offer Spread: January 13, 2021 December 15, 2026 +38 bps over UKT 1.50% Jul-2026 Distribution by Geography 22% 31% Ontario 47% United Kingdom Europe (non-UK)/ Middle East Investor Demand by Type 13% 53% 34% Rest of the World ■Asset Managers/ Insurance ■Banks/Bank Treasuries/Corporates ■Central Banks/Official Institutions* May include government/public sector pension plans, government/public sector investment agencies/boards, and/or other. 16#1810-year EUR 2.5 Billion EMTN Issue Transaction Summary Issuer: Issuer Ratings: Joint Bookrunners: Size: Coupon: Province of Ontario Aa3/A+/AA-/AAL (all stable) BNP Paribas, HSBC, RBC Capital Markets, TD EUR 2.5 Billion 0.010% November 24, 2020 Issuer Highlights • • This transaction was Ontario's largest ever EUR benchmark issuance, the Province's second EUR benchmark for 2020, (following the EUR 1 billion 7-year bond from April). • Over 130 individual investors participated in the transaction and the final order book was in excess of EUR 4.3 billion. By investor type, banks led the transaction (46%) while by geography, Germany saw the largest allocation (34%). Settlement Date: Maturity Date: Offer Spread: November 25, 2030 Mid-swaps +24 bps / 56.9 bps over DBR 0.00% Aug-30 Distribution by Geography 5% 4% 6% 8% 12% Ontario 13% 18% Germany France ■Benelux 34% UK Austria & Switzerland Other Europe Americas Asia/ME Investor Demand by Type 42% 12% 46% Bank Treasuries/ Corporates Asset Managers/ Insurance/ Pension Funds/other ■Central Banks/Official Institutions* * May include government/public sector pension plans, government/public sector investment agencies/boards, and/or other. 17#19Liquidity and Short-Term Borrowing Capacity Average Unrestricted Liquid Reserve Levels ($ Billions) 50 50 40 40 30 20 20 10 14.4 0 2009-10 24.9 23.3 23.6 21.7 21.1 19.4 20.2 T 2010-11 2011-12 2012-13 2013-14 2014-15 32.7 32.3 30.1 45.4 I 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 Note: 2020-21 liquid reserves are on a forecast basis to fiscal year end as of January 31, 2021. ($ Billions) Currency C$ T-Bill Program Canadian Dollars 1 day-3 years* U.S.$ Commercial Paper Program U.S. Dollars Total Maturity Authorized 1-270 day(s) C$46.0 C$15.0 C$61.0 Outstanding C$24.6 C$0.0 C$24.6 Available C$21.4 C$15.0 C$36.4 *Regular issuance of 3M, 6M and 1Y T-Bills Note: As of February 28, 2021. Numbers may not add due to rounding. Ontario 18#20Net Debt-to-GDP Per Cent 55 50 50 45 Net Debt-to-GDP -Faster Growth Scenario -Slower Growth Scenario 40.3 39.7 39.4 36.6 40.5 39.7 38.2 39.3 39.6 32.3 34.5 10 1990-91 20 21.1 17.1 15 13.4 1992-93 1993-94 1994-95 1995-96 1991-92 40 35 32.1 30.1 30.5 30 30 28.2 31.2 27.5 27.8 26.6 29.4 29.3 26.6 28.3 25 25 27.8 26.8 26.8 27.1 1998-99 1996-97 1997-98 1999-00 2000-01 Ontario Sources: Statistics Canada and Ontario Ministry of Finance. 2001-02 2003-04 2004-05 2002-03 Actuals 2006-07 2009-10 2005-06 2007-08 2008-09 2010-11 2011-12 2012-13 47.1 52.2 51.1 49.4 50.2 49.6 48.8 47.1 47.6 47.8 47.7 2020-21 2021-22 2022-23 2023-24 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2023-24 2021-22 2022-23 Interim & Medium-Term Outlook 19#210 50 50 100 78 104 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1998-99 1997-98 1999-00 300 Net Debt-to-Revenue Per Cent Net Debt-to-Revenue Faster Growth Scenario -Slower Growth Scenario 350 250 225234225 226/1 215 220 208 200 187 182 189 188 189 216 223 183 168 162 192 184 157 176 183 177 170 146 150 164 153 126 2000-01 2001-02 2002-03 2003-04 Ontario Actuals Sources: Public Accounts of Ontario (1990-1991 to 2019-2020) and Ontario Financing Authority. 2004-05 2005-06 2006-07 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2007-08 2015-16 318 308 301 297 290 286 285 284 263 279 2020-21 2021-22 2022-23 2023-24 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Interim & Medium-Term Outlook 263 20 20#225 7 IOD-to-Revenue Per Cent 17 IOD-to-Revenue 14.8 15 14.5 14.6 13.9 14.2 13 10.8 11 9 8.8 7.7 1990-91 1991-92 1992-93 1993-94 Ontario 1994-95 1995-96 15.5 14.3 15.0 14.2 Faster Growth Scenario Slower Growth Scenario 9.1 8.8 8.6 8.7 8.6 8.5 8.4 8.3 8.3 12.9 12.9 8.2 2020-21 2021-22 2022-23 2023-24 11.1 9.7 1997-98 1998-99 2000-01 2001-02 2003-04 1996-97 1999-00 2002-03 2004-05 2005-06 9.1 9.1 8.9 8.4 8.5 8.9 9.0 8.2 8.8 8.9 8.7 7.9 8.0 8.3 8.1 2006-07 2007-08 Actuals 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 Sources: Public Accounts of Ontario (1990-1991 to 2019-2020) and Ontario Financing Authority. 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2017-18 Interim & Medium-Term Outlook 21 24#23Effective Interest Rate (Weighted Average) on Total Debt Per Cent 12.0 10.0 8.0 6.0 4.0 2.0 0.0 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 6.1 6.0 5.8 5.2 4.6 4.5 4.4 4.1 3.9 3.7 3.6 3.5 3.6 3.6 3.4 3.0 2013-14 2017-18 2018-19 2020-21* 2014-15 2015-16 2016-17 2019-20 1990-91 1992-93 1993-94 1995-96 1998-99 2003-04 1991-92 1994-95 1996-97 1997-98 1999-00 2000-01 2001-02 2002-03 2004-05 2005-06 * On a forecast basis to fiscal year end as of January 31, 2021.. Sources: Public Accounts of Ontario (1990–91 to 2019-20), and Ontario Financing Authority. 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 Ontario 22 22#24Average Annual Ontario Borrowing Rates Per Cent 5.0 4.5 4.0 3.42 3.5 3.27 3.07 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2009-10 Ontario 2010-11 2011-12 2.93 2.81 2.67 2.50 2.31 2.25 2.15 2.09 1.90 1.60 2012-13 2013-14 2014-15 Sources: Public Accounts of Ontario (2009-10 to 2019-20) and Ontario Financing Authority. 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2.40 2023-24 23 23 3.20#25Interest on Debt Expense $ Billions 2019 Budget Forecast 2020 Budget Forecast 2021 Budget Forecast 16.0 15.5 15.5 15.0 14.5 14.9 14.4 14.6 13.9 14.0 13.5 13.7 13.3 13.2 13.7 13.0 13.1 12.5* 12.4* 12.5 12.5 12.0 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 Ontario *Actuals after Budgets were tabled. Source: Ontario Ministry of Finance. 24 24#26Credit Ratings Rating Agencies Long-term Rating Short-term Rating Outlook MOODY'S Aa3 P-1 stable Fitch Ratings AA- F1+ stable AA (low) R-1 (mid) stable DBRS STANDARD & POOR'S A+ A-1 stable Ontario 25 25#27Appendix#28Ontario's Action Plan: Protecting People's Health and Our Economy Protecting People's Health $16.3 Billion Protecting Our Economy $23.3 Billion Total Direct Support $39.6 Billion Improving Cash Flow for People and Businesses $11.3 Billion $51 Billion in Total Supports over Four Years Ontario 27 27#29Employment Projected to Recover Employment (Thousands) Unemployment Rate (Per Cent) 8,000 Employment Unemployment Rate 12.0 7,800 7,600 7,400 7,200 7,000 10.0 8.0 6.0 4.0 2.0 6,800 6,600 0.0 2018 2019 2020 2021p 2022p 2023p 2024p Ontario p = Ontario Ministry of Finance planning projection. Sources: Statistics Canada and Ontario Ministry of Finance 28 28#30Ontario'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, 2019 (Per Cent Share of Nominal GDP) Other Services² 8.4% Primary 2.0% Utilities 1.9% Construction Public 6.8% Services (77.7% of GDP) Goods (22.3% of GDP) Administration. 7.4% Health & Education 12.8% Professional & Scientific 7.5% Manufacturing 11.7% Wholesale & Retail Trade 10.9% Transportation & Warehousing 4.2% Real Estate & Renting & Leasing1 13.2% Information & Finance & Insurance 9.5% Cultural 3.7% 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. 29 29#31Ontario 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 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.