Section 11: Three-year Financial Plan and Budget

Last Updated

The AGCO receives its annual spending authority from the Ministry’s printed estimates, as approved by the Ontario Legislature. The AGCO is funded from a combination of revenue from the Consolidated Revenue Fund and recoveries.

Multi-Year Operating Budget

Expense Category

2021-22

Budget*

2021-22

YE Forecast*

Variance

2022-23

Budget**

2023-24

Budget**

2024-25

Budget**

Operating

Salaries and Wages (S&W)

 

67,178.90

70,290.25

(3,111.35)

 

76,016.70

75,946.0

75,837.40

Benefits

 

12,783.10

21,300.07

(8,516.97)

 

15,467.50

15,761.30

16,143.70

Other Direct Operating Expenses

Transportation and Communications (T&C)

3,026.30

1,451.80

1,574.50

 

3,347.60

3,345.80

3,340.60

Services

 

11,925.50

18,991.19

(7,065.69)

 

22,065.0

13,270.80

13,263.50

Supplies and Equipment (S&E)

 

1,748.30

1,314.52

433.78

 

2,069.60

2,067.90

2,062.60

Transfer Payment

1.00

0.00

1.00

0.00

0.00

0.00

TOTAL Gross Expenditure

96,663.10

113,347.82

(16,684.72)

 

118,966.40

110,391.80

110,647.80

Less: Recoveries

63,871.60

33,592.19

30,279.41

 

79,094.70

71,123.20

71,574.30

Base Budget from Government

32,791.50

79,755.63

(46,964.13)

 

39,871.70

39,268.60

39,073.50

Capital

4,475.9

2,833.20

1,642.70

2,305.10

471.20

489.60

Revenue***

21,119.54

24,309.16

(3,189.62)

39,557.60

68,622.92****

41,476.23

*2021-22 Budget and YE forecast (as of Q3 2021-22) do not include expenditures paid on behalf of iGaming Ontario. Forecasted iGaming Ontario direct costs are $11.3M.

** Budgets are inclusive of changes requested through the government’s annual budget request process.

*** This represents fee revenue that goes into the Consolidated Revenue Fund.

**** The increase in revenue during the 2023-24 budget is due to the adoption of a new accounting standard PS3400 – Revenue recognition. There could be changes in timing of the revenue recognition depending on the nature of the revenue.

AGCO Revenue – Key Explanations

  • The revenue forecast in 2021-22 is higher than the 2021-22 budget mainly due to forecasted AGCO igaming regulatory revenue from operators and suppliers of $2.4M. The licensing and registration process for operators and suppliers interested in participating in Ontario’s regulated igaming market commenced in September 2021.

  • Over the next three fiscal years, revenue is expected to increase as industries recover from the COVID-19 pandemic and as demand for new applications and renewals from cannabis retail licenses and authorizations continues.

  • The increase in revenue in 2023-24 is as a result of the new accounting standard PS3400 which mandates revenue recognition based on when licenses are issued starting in FY 2023-24.

AGCO Expenditures – Key Explanations

  • Services include expenditures related to due diligence costs and related recoveries. These costs are incurred to acquire external service providers to assist in Eligibility Assessments for Gaming Modernization and private cannabis retail, The AGCO will be transferring $8.1M of the $8.6M budget for expenditures in services and recoveries related to Gaming Modernization Eligibility Assessments in 2021-22 to 2022-23; the remaining $0.5M is expected to be fully spent in 2021-22. The 2022-23 budget includes the $8.1M that is being transferred. There is no budgeted amount for this item in 2023-24, resulting in a lower budget for that year.

  • The overall AGCO expenditure variance in 2021-22 of ($16.7M) is mainly due to:

    • Forecasted igaming Regulatory and Shared Services costs (including Salaries and Wages and Benefits) totaling $10.4M that are currently being risk managed.

    • Forecasted decrease in recoveries of $30.3M as a result of a gradual shift in regulatory work to non-recoverable sectors and the COVID-19 pandemic - regulatory fees charged to casino service providers as well as OLG cGaming were waived for the first half of 2021-22. Horse racing fees were also waived for approximately the first 2.5 months in FY 2021-22 due to racetrack closures.

    • Management is working with the government to secure in-year funding for 2021-22.

AGCO Capital Assets – Key Explanations

  • The AGCO’s Capital Budget includes $3.5M approved in Capital Assets in 2021-22 for Regulatory Assurance Solution (RAS) betterments – to support and enhance iAGCO for the new iGaming line of business, liquor reform, and other changes (e.g., cannabis renewals).

  • The Capital Budget also includes an increase of $0.2M in IT Hardware to equip AGCO staff supporting iGaming. AGCO IT hardware includes the purchase of personal computing devices, mainframes, data network equipment, and storage devices.

  • A request to transfer $1.6M in Capital Assets from 2021-22 to 2022-23 was submitted in the 2022-23 Multi-year Plan.