On an August day in 1954, various provincial dignitaries gathered on Grosvenor Street, just a few steps from Queen’s Park in Toronto, to watch the ‘Prime Minister of Ontario’ touch the cornerstone of what would eventually be the new home of the Treasury department. By his side were William Griesinger, the minister of public works, and Chester Walters, the deputy treasurer. Leslie Frost, often referred to as ‘old man Ontario,’ had blessed an uncommonly contemporary design for this office block. It was austere and functional, smoothly sheathed in stone and dominated by large windows. The ultra-modern building was in sharp...

Established at Confederation as the ‘Treasury’ of Ontario, the department of finance had its organizational development shaped by the demands of governments of all stripes and of over thirty ‘treasurers’ or ‘ministers.’ The concern was to ensure that that the bureaucracy was organized to deliver on the government’s concerns, plans, and visions. The evolution of Leslie Frost’s ‘Treasury’ to the ‘Ministry of Finance’ of the early twenty-first century reveals how the administration’s mandate was perceived and how the government of Ontario’s general bureaucracy was understood to function. During the forty years under study in this book, there was significant growth...

In his study of the budget process in the Government of Canada, David Good accented the growing role of a group he called the ‘priority setters.’ Good argued that the growing involvement of the prime minister and his staff in setting the broad direction of the budget was an important departure. In part, this was because the ‘priority setting’ has evolved into a year-long affair, not just the concern of a critical few weeks in early winter, as it had once been. Good’s work in this regard was original also in highlighting ‘the most important of all relationships,’ that of...

There was a time, more than half a century ago now, when Canada’s civil service was among the best in the world, argued J.L. Granatstein in his important studyThe Ottawa Men.¹ Armed with educations from Oxford or the London School of Economics and a profound commitment to the Protestant work ethic, possessing the liberal inclinations that wrapped their icy logic in a thick veil of compassion for the underprivileged, this group of able men led Canada’s financial and external affairs departments through the Second World War and beyond. Their dominance was brief but significant: Canada established its reputation for...

John Maynard Keynes came to Ontario on a number of occasions as he helped the British government navigate the deep waters of wartime financing. His destination was Ottawa, where he cajoled and convinced the Mackenzie King government that Canada had a duty and a stake in ensuring the financial health of the United Kingdom. Keynes even celebrated the 250th anniversary of the Bank of England with a sumptuous dinner at the Chateau Laurier in July 1944. The records do not show that he ever stayed in Toronto or met with Ontario government officials, but the influence of his thought certainly...

The budget speech has consistently been the prime focus of the Ontario Treasury/Ministry of Finance. Today, dedicated staffs work year-round in preparing it and its new offspring, the ‘Fall Update.’ Countless hours are spent examining scenarios, pondering economic models, and injecting formulas with endless generations of data. Weeks are devoted to drafting the speech itself as the Frost buildings suddenly feature armed policemen mandated to ensure that the document’s secrecy is not violated. The media and community experts are invited to special ‘lockups’ on the afternoon of the budget, and given a detailed briefing on the features of the document...

Examined from a broad historical perspective, the state’s responsibilities in Western societies were for a long time limited almost exclusively to maintaining order.¹ The great liberal philosopher Benjamin Constant (1767–1830) put it bluntly: ‘Legislation, like the government, has only two purposes: first, to prevent internal disorder, and second, to repel foreign invaders.’² Police forces guaranteed social peace; courts settled legal disputes, the army protected the nation from outside threats. In addition, diplomatic responsibilities for the state in representing the ‘people’ to others were assumed, while economic functions were limited to issuing currency and collecting taxes.

Starting in the nineteenth...

As the Robarts government assumed a broader range of responsibilities and deepened its impact on the provincial economy through its spending and its programs, the task of creating a budget became more demanding. The response came in three parts. First, budget responsibilities (especially around drafting the actual budget) were transferred from the Department of Economics and Intergovernmental Affairs. The second step was increasing and improving the bureaucracy’s capacity to understand economic trends and, just as important, to explain them to both politicians and to itself. It was not just a question of hiring the right individuals, however. With new people...

Provincial government fiscal planning has evolved over time, influenced by a variety of factors including economic conditions, budgeting philosophy, political expediency and ideological direction, coercive pressure from financial markets, public and ministerial requests for new programs and policy initiatives, and changes in accounting policy. Prior to 1960, Ontario generally followed the principle of balanced annual budgets and pay-as-you-go capital financing. As such, the government’s annual budget was described as a form of ‘accounting exercise,’ providing details about the allocation of government resources to particular programs, balanced by the associated tax revenues necessary to fund these programs. This budgeting philosophy downplayed...

This chapter explores the trends and drivers of infrastructure expenditures conducted by the Ontario Ministry of Finance in the latter half of the twentieth century. According to the Canadian Institute of Chartered Accountants the term ‘infrastructure’ can be defined as any non-financial asset having physical substance that is acquired, constructed, or developed, and (1) is held for use in the production or supply of goods and services; (2) has a useful life extending beyond an accounting period and is intended to be used on a continuing basis; and (3) is not intended for sale in the ordinary course of operations...

At the height of his career, Aaron Wildavsky, the undisputed American dean of public-sector financial management studies, published an article inCanadian Public Administrationon the topic of ‘spending limits’ in American and Canadian budgeting.⁴ Voicing his frustration with the inability of governments to curb spending, Wildavsky probed both systems for clues as to why public sectors in both countries proved unable to withstand the demands on the public purse. In his vain search for an explanation, he examined a number of factors, ranging from efforts to install program-based budgeting systems to political inertia. Twenty-five years later, and fifteen years...