O. Reg. 204/22: DETERMINATION OF BOARDS' SURPLUSES AND DEFICITS

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ontario regulation 204/22

made under the

Education Act

Made: March 10, 2022
Filed: March 11, 2022
Published on e-Laws: March 14, 2022
Printed in The Ontario Gazette: March 26, 2022

Amending O. Reg. 488/10

(DETERMINATION OF BOARDS’ SURPLUSES AND DEFICITS)

1. Section 1 of Ontario Regulation 488/10 is amended by adding the following subsection:

(3) For each fiscal year beginning in the 2021-2022 fiscal year, the amount determined for the board under subsection 8 (1) for the applicable fiscal year, multiplied by -1, shall be excluded in the determination of a board’s accumulated surplus or accumulated deficit.

2. The Regulation is amended by adding the following section:

In-year surplus and in-year deficit: 2021-2022 and subsequent years

8. (1) For the purposes of the determination of a board’s in-year surplus or in-year deficit for each fiscal year beginning in the 2021-2022 fiscal year, the amount determined as follows shall be excluded:

1.  Determine, in accordance with subsection (2), the amortization expense incurred by the board in the applicable fiscal year that is the result of capital asset costs.

2.  Determine the amount of interest earned on the board’s sinking fund assets for the applicable fiscal year.

3.  Determine the amount of interest that was expected to be earned on the board’s sinking fund assets during the life of the sinking fund under the applicable sinking fund agreements as of September 1, 2010.

4.  Determine the average remaining service life (in years) of the capital assets that were supported through the sinking fund as of August 31, 2010.

5.  Divide the amount determined under paragraph 3 by the number determined under paragraph 4.

6.  Determine the accumulated interest earned on the board’s sinking fund assets on September 1 of the applicable fiscal year.

7.  Take the total of the amounts determined under paragraphs 2 and 6.

8.  Determine the amount of the operating revenue for the applicable fiscal year that the board elects to use to top up its accumulated surplus to address the potential gap between the accumulated interest that was expected to be earned during the life of the sinking fund assets and the accumulated interest to be earned as specified under the applicable sinking fund agreement.

9.  If the amount determined under paragraph 6 is,

i.  greater than or equal to the amount determined under paragraph 3, subtract the amount determined under paragraph 5 from the amount determined under paragraph 8 and, if the amount determined under this subparagraph is greater than zero, it is deemed to be zero,

ii.  less than the amount determined under paragraph 3 and the amount determined under paragraph 7 is greater than or equal to the amount determined under paragraph 3,

A.  subtract the amount determined under paragraph 6 from the amount determined under paragraph 3,

B.  add the amount determined under paragraph 8 to the amount determined under sub-subparagraph A, and

C.  subtract the amount determined under paragraph 5 from the amount determined under sub-subparagraph B and, if the amount determined under this sub-subparagraph is greater than zero, the amount determined under this sub-subparagraph is deemed to be zero, and

iii.  less than the amount determined under paragraph 3 and the amount determined under paragraph 7 is less than the amount determined under paragraph 3,

A.  add the amounts determined under paragraphs 2 and 8, and

B.  subtract the amount determined under paragraph 5 from the amount determined under sub-subparagraph A and, if the amount determined under this sub-subparagraph is greater than zero, the amount determined under this sub-subparagraph is deemed to be zero.

10.  Multiply the amount determined under paragraph 9 by -1.

11.  Determine the lesser of,

i.  the amount of the board’s accumulated surplus (as a positive number) that it elects to use in the applicable fiscal year to offset the impact of the requirement under section 7, and

ii.  the amount determined for the board in the applicable fiscal year under section 7.

12.  Take the total of paragraphs 1, 10 and 11.

(2) The following capital asset costs apply with respect to determining the amortization expense referred to in paragraph 1 of subsection (1):

1.  Capital asset costs funded by the board’s accumulated surplus.

2.  Capital asset costs that meet one of the following criteria:

i.  The costs were incurred on or before August 31, 2010.

ii.  The costs were incurred on or after September 1, 2010 and the use of the accumulated surplus to fund the capital asset costs was approved by the Ministry.

iii.  The costs were incurred on or after September 1, 2010 but before September 1, 2019, and

A.  the use of the accumulated surplus to fund the capital asset costs was not approved by the Ministry, and

B.  the accumulated surplus at the end of the applicable fiscal year was greater than or equal to the product of one per cent and the board’s operating revenue for that fiscal year.

(3) For the purposes of subsection (2),

“capital asset cost”, in respect of a fiscal year, has the same meaning as “capital asset cost” in the legislative grant regulation for the corresponding fiscal year; (“coût des immobilisations”)

“legislative grant regulation” means a regulation made under subsection 234 (1) of the Act. (“règlement sur les subventions générales”)

Commencement

3. This Regulation comes into force on the day it is filed.

 

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