form_18k2002

18-K 1 form_18k2002.htm EXHIBIT (D) PROVINCE OF ONTARIO - DESCRIPTION form_18k2002

CONFORMED COPY

FORM 18-K
For Foreign Governments and Political Subdivisions Thereof

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

ANNUAL REPORT
of
PROVINCE OF ONTARIO
(Canada)
(Name of Registrant)

Date of end of last fiscal year: March 31, 2002

SECURITIES REGISTERED*
(As of the close of the fiscal year)

Title of Issue Amounts as to which Names of exchanges
registration is effective on which registered
N/A N/A N/A

Name and address of persons authorized to receive notices and
communications from the Securities and Exchange Commission:

Jamal Khokhar
Counsellor
Canadian Embassy
501 Pennsylvania Avenue N.W.
Washington, D.C. 20001

Copies to:
Brice T. Voran
Shearman & Sterling
Commerce Court West, 199 Bay Street
Toronto, Ontario, Canada M5L IE8

* The Registrant is filing this annual report on a voluntary basis.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this annual report to be signed on its behalf by the
undersigned, thereunto duly authorized, at Toronto, Ontario.

PROVINCE OF ONTARIO
(Name of registrant)

December 19, 2002 By: /s/ Gadi Mayman
Name: Gadi Mayman
Title: Executive Director
Capital Markets Division
Ontario Financing Authority

Exhibit Index

Exhibit (a): None

Exhibit (b): None

Exhibit (c): The 2002 Ontario Budget (incorporated by reference to
Amendment No. 4 on Form 18-K/A dated June 18, 2002 to the
Annual Report of the Province of Ontario)

Exhibit (d): Province of Ontario - Description

EXHIBIT (d)

Province of Ontario - Description

[ ONTARIO LOGO ]

This description of the Province of
Ontario is dated December 19, 2002 and
appears as Exhibit (d) to the Province
of Ontario's Annual Report on Form 18-K
to the U.S. Securities and Exchange
Commission for the fiscal year ended
March 31, 2002.

THE DELIVERY OF THIS DOCUMENT AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS DOCUMENT
(OTHERWISE THAN AS PART OF A PROSPECTUS CONTAINED IN A REGISTRATION STATEMENT
FILED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED) IS FOR INFORMATION
PURPOSES ONLY AND IS NOT INTENDED TO BE USED OR RELIED UPON IN CONNECTION WITH
THE PURCHASE OR SALE OF ANY SECURITIES OF THE PROVINCE OF ONTARIO, IS NOT A
PROSPECTUS, INFORMATION MEMORANDUM OR SIMILAR DOCUMENT AND IS NOT AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OF THE PROVINCE OF
ONTARIO.

TABLE OF CONTENTS

Page

PROVINCE OF ONTARIO SUMMARY
INFORMATION.......................................... 3
1. OVERVIEW............................................ 5
2. ECONOMY............................................. 7
MAJOR ECONOMIC INDICATORS......................... 7
RECENT ECONOMIC DEVELOPMENTS...................... 9
STRUCTURE OF THE ECONOMY.......................... 10
LABOUR FORCE...................................... 13
SOCIAL SECURITY SYSTEM............................ 13
GOVERNMENT RESPONSIBILITIES AND
RELATIONSHIPS................................... 14
3. PUBLIC FINANCE...................................... 16
FINANCIAL REPORTING............................... 16
FISCAL POSITION................................... 19
REVENUE........................................... 22
EXPENDITURE....................................... 27
OUTLINE OF PRINCIPAL PROVINCIAL
INSTITUTIONS.................................... 33
SINKING FUNDS..................................... 33
4. PUBLIC DEBT......................................... 34
PROVINCIAL PURPOSES............................... 34
ONTARIO ELECTRICITY FINANCIAL
CORPORATION (OEFC) PURPOSES..................... 34
FINANCIAL ASSETS AND
LIABILITIES..................................... 35
CONSOLIDATED DEBT OF THE ONTARIO
PUBLIC SECTOR................................... 49
SELECTED DEBT STATISTICS.......................... 50
FINANCIAL TABLES.................................. 52

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In this document, unless otherwise specified or the context otherwise
requires, all dollar amounts are expressed in Canadian dollars. All foreign
currency conversions are reported at statement date exchange rates, unless
otherwise specified. The inverse of the noon buying rate in New York City on
December 18, 2002 for cable transfers in Canadian dollars, as certified for
customs purposes by the Federal Reserve Bank of New York was $1.00 = $0.6435
(U.S.). See "4. Public Debt-- (5) Selected Debt Statistics-- The Canadian
Dollar."

---------------

In this document, statistics for the economy of the Province of Ontario
("Ontario" or the "Province") are set forth on a calendar year basis at market
prices, except as otherwise indicated. Economic statistics for recent years
frequently are estimates or preliminary figures which are subject to adjustment.
Financial statistics for the Province are set forth on a fiscal year basis (from
April 1 to March 31 of the succeeding year), unless otherwise noted.

---------------

In this document, unless otherwise specified, references to average growth
rates refer to the average annual compound rate of growth. This is computed by
expressing the amount of growth during the period as a constant annual rate of
growth compounded annually. The computational procedure used is the geometric
average of the annual rates from the first to the last year's observation of the
variables.

---------------

This document appears as an exhibit to the Province's Annual Report to the
U.S. Securities and Exchange Commission on Form 18-K for the fiscal year ended
March 31, 2002. Additional information with respect to the Province is available
in such Annual Report and in amendments thereto. Such Annual Report, exhibits
and amendments can be inspected and copied at the public reference facilities
maintained by the Commission at: 2 Judiciary Plaza, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549. Copies of such documents may also be obtained at
prescribed rates from the Public Reference Section of the U.S. Securities and
Exchange Commission at its Washington address or, without charge, from the
Province of Ontario, Ontario Financing Authority, Capital Markets Division, One
Dundas Street West, 14th Floor, Toronto, Ontario M7A 1Y7, telephone (416)
325-8128.

---------------

PROVINCE OF ONTARIO SUMMARY INFORMATION

The following information is a summary only and is qualified in its entirety by
the detailed information elsewhere in this document. Unless otherwise indicated,
all dollar amounts are expressed in Canadian dollars.

Year ended December 31,
----------------------------------------------------------------------
-------------- ------------- ------------- ------------- -------------
1997 1998 1999 2000 2001
(in millions unless otherwise indicated)
Economy(1)
Gross Domestic Product at Market
Prices..................................... $ 359,354 $ 377,897 $ 408,099 $ 443,446 $ 443,852
Personal Income............................... 289,537 304,652 322,549 346,738 359,927
Consumer Price Index
(annual change)............................ 1.9% 0.9% 1.9% 2.9% 3.1%
Unemployment
(average annual rate)...................... 8.4% 7.2% 6.3% 5.7% 6.3%

Restated(7) Outlook
1999-00(2) 2000-01(2) 2001-02(2) 2002-03(3)(2)
(in millions)
Government Finances
Revenue......................................... $ 62,931 $ 63,824 $ 63,886 $ 66,611
Expenditure
Programs................................... 47,525 50,401 52,523 54,494
Gross Capital Expenditure.................. 4,887 2,123 1,890 2,715
Less: Net Investment in Capital Assets*.... -- -- -- 634
Public Debt Interest
Provincial............................ 8,977 8,896 8,509 8,505
Electricity Sector.................... 520 520 520 520
Total Expenditure............................... 61,909 61,940 63,442 65,600
Less: Reserve(4)................................ -- -- -- 1,000
Add: Decrease/(Increase) in Stranded Debt
from Electricity Sector Restructuring to be
recovered from Ratepayers(5).................. (354) 18 (69) (11)
Surplus/(Deficit)............................... $ 668 $ 1,902(6) $ 375 $ 0

As at March 31,
----------------------------------------------------------------------
------------- ------------- -------------- ------------- -------------
1998(2) 1999(2) 2000(2) 2001(2) 2002(2)
(in millions)
Public Sector Debt
Net Provincial Debt...... $ 112,735 $ 114,737 $ 113,715 $ 110,634 $ 112,036
Ontario Electricity Financial
Corporation (OEFC) Debt 30,657 30,486 31,338 30,566 29,116
Loans Guaranteed......... 2,774 2,893 2,804 2,816 2,788
Other Public Sector Debt. 6,125 6,580 6,575 7,234 7,212
Total.................... $ 152,291 $154,696 $154,432 $151,250 $151,152

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* Starting in 2002-03, major tangible capital assets owned by the Province
(land, buildings and transportation infrastructure) are accounted for on a
full accrual accounting basis. Other tangible capital assets will continue
to be booked as expenditure in the year of acquisition.

(1) See "2. Economy-- (2) Recent Economic Developments" for the most recently
available economic indicators.

(2) Prepared on the basis of modified accrual and consolidation accounting. See
"3. Public Finance-- (1) Financial Reporting-- Overview."

(3) Outlook 2002-03 refers to information contained in the 2002-03 Second
Quarter Ontario Finances and the 2002 Ontario Economic Outlook and Fiscal
Review which updates the 2002 Ontario Budget (the "2002 Budget").

(4) Ontario's 2002-03 Budget Plan included a $1 billion reserve designed to
protect the balanced budget against unexpected and adverse changes in the
economic and fiscal outlook. The reserve will be available for debt
reduction at year-end if not needed.

(5) Reflects the estimated excess of revenue over expenditure of the Ontario
Electricity Financial Corporation ("OEFC"). Consistent with the principles
of electricity restructuring, OEFC debt is to be recovered from ratepayers,
not taxpayers.

(6) Surplus after Provisional Adjustment for CCRA Error and Accounting Changes.

(7) Fiscal 2000-01 has been restated to reflect the accounting changes. See "3.
Public Finance-- (1) Financial Reporting-- Accounting Changes."

1. OVERVIEW

Area and Population

The Province of Ontario covers an area of approximately 1,068,580 square
kilometers (412,580 square miles), about 10.7% of Canada, and is about 11.4% as
large as the United States. The estimated population of Ontario on July 1, 2002
was 12.1 million, or 38.4% of Canada's population of 31.4 million. Since 1992,
the populations of Ontario and Canada have increased at average annual rates of
1.3% and 1.0%, respectively. Although it constitutes only 12% of the area of the
Province, Southern Ontario contains approximately 93.2% of the Province's
population. The population of the Greater Toronto Area, the largest metropolitan
area in Canada, was estimated to be 5.5 million on July 1, 2002.

Government

Canada is a federation with a parliamentary system of government.
Constitutional responsibilities are divided between the Federal Government, the
10 provinces and the 3 territories.

The Premier of the Province of Ontario (the "Premier") is traditionally the
leader of the political party with the greatest number of members elected to the
legislative assembly of the Province (the "Legislative Assembly"). The Cabinet
through the Lieutenant Governor, who represents the Crown, formally exercises
executive power. Cabinet ministers are usually nominated from among members of
the Premier's party.

The Legislative Assembly consists of 103 seats, each representing a
specified territorial division of the Province, and is elected for a five-year
term. A dissolution of the Legislative Assembly prior to the end of the
five-year term may be requested by the Premier at the Premier's own volition or
if the government loses the confidence of the Legislative Assembly by being
defeated on an important vote.

The last Provincial election was held on June 3, 1999. Present party
standings in the Legislative Assembly are: the Progressive Conservative Party,
57 seats; Liberal Party, 36 seats; New Democratic Party, 9 seats; and 1
independent member. The current government of the Province is formed by the
Progressive Conservative Party.

Economic Setting

Gross Domestic Product ("GDP") at current market prices in 2001 was
$443,852 million, representing 40.6% of the Canadian GDP. Personal income per
capita in 2001 was $30,259, or 7.9% above the national average.

An indication of the Province's importance in several areas of Canadian
economic activity is illustrated below.

ONTARIO'S SHARE OF CANADIAN ECONOMIC ACTIVITY, 2001

Total
Canadian
Economic Ontario's Share of
Activity Canadian Total
(in millions) (%)

Gross Domestic Product..... $1,092,246 40.6
Business Investment........ 189,926 36.9
Exports.................... 473,000 65.0
Consumption................ 620,777 40.1
Personal Income............ 872,657 41.2

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Sources: Statistics Canada and Ontario Ministry of Finance.

The provincial economy displays many of the characteristics of a mature
economy, including substantial secondary and service sectors. In broad terms,
the primary sector is composed of agriculture, mining and forestry, while
manufacturing, utilities and construction form the secondary sector. The
remaining categories, such as transportation, communication, wholesale and
retail trade and business and public service, make up the service sector.
Ontario shows a stronger concentration in manufacturing than both the United
States and the whole of Canada.

PERCENTAGE DISTRIBUTION OF REAL GROSS DOMESTIC PRODUCT BY INDUSTRY, 2001
(at 1997 Prices)

Ontario Canada(1) United States(2)
(%) (%) (%)
Primary Sector...... 1.8 6.1 2.9
Secondary Sector.... 28.0 25.2 28.7
Service Sector...... 70.2 68.7 68.4
Total............... 100.0 100.0 100.0

----------

Sources: Ontario Ministry of Finance, Statistics Canada and the United States
Department of Commerce.

(1) Real GDP in chained (1997) dollars
(2) Real GDP in chained (1996) dollars

Foreign Relations

The Province has no direct diplomatic relations with foreign countries, but
has developed a high degree of international activity in order to facilitate
investment in Ontario.

2. ECONOMY

(1) Major Economic Indicators

Overview

Ontario's GDP at current market prices in 2001 was $443,852 million. GDP in
constant 1997 dollars ("Real GDP") was $430,501 million in 2001, an increase of
1.5% over 2000. The four-year average annual growth rate of real GDP from 1998
to 2001 was 4.6%. Real GDP in 2001 declined at a quarterly rate of 0.3% in the
first quarter, increased 1.0% in the second quarter, declined 0.4% in the third
quarter and increased 0.6% in the fourth quarter.

For 2001, the Ontario economy faced serious challenges and growth slowed to
1.5% after reaching 4.6% in 2000. In the external sector, real exports fell
3.3%. On the domestic side, business investment in machinery and equipment
declined, while consumer spending and housing increased.

The following table provides a summary of major economic indicators for
Ontario from 1998 to 2001. For the most recently available economic indicators,
See "2. Economy-- (2) Recent Economic Developments" below.

MAJOR ECONOMIC INDICATORS

Average Annual
Year ended December 31, Rate of Growth
1998 1999 2000 2001 1998-2001
(in millions unless otherwise indicated) (%)
Personal Expenditure on Consumer Goods
and Services....................................... $209,866 $223,902 $238,808 $249,027 5.6
Government Expenditure on Goods and
Services........................................... 73,024 75,975 80,665 84,645 4.7
Business Gross Fixed Capital Formation............... 59,448 65,757 69,644 70,120 5.6
Exports of Goods and Services........................ 263,663 291,466 314,755 307,436 6.1
Imports of Goods and Services........................ 229,462 248,671 273,431 264,659 5.5
Adjustment for Inventory Changes and
Other Transactions................................. 1,358 670 3,005 -2,717 --
Gross Domestic Product at Market Prices.............. 377,897 409,099 433,446 443,852 5.4
Gross Domestic Product in Constant 1997
Prices............................................. 376,716 405,352 424,096 430,501 4.6
Gross Domestic Product Price Deflator
(Index)............................................ 100.3 100.9 102.2 103.1 0.8
Personal Income (Ontario)............................ 304,652 322,549 346,738 359,927 5.6
Personal Income (Canada)............................. 748,321 783,596 838,880 872,657 5.1
Personal Income per Capita
(July Population):
Ontario (in dollars)............................... 26,753 27,980 29,642 30,259 4.1
Canada (in dollars)................................ 24,739 25,684 27,244 28,050 4.1
Population (July in thousands):
Ontario............................................ 11,387 11,528 11,698 11,895 1.5
Canada............................................. 30,248 30,509 30,791 31,111 0.9

Year ended December 31, Average
1998 1999 2000 2001 1998-2001
Consumer Price Index
(annual Change):
Ontario............................................ 0.9% 1.9% 2.9% 3.1% 2.2%
Canada............................................. 0.9% 1.7% 2.7% 2.6% 2.0%
Unemployment
(average annual Rate):
Ontario............................................ 7.2% 6.3% 5.7% 6.3% 6.4%
Canada............................................. 8.3% 7.6% 6.8% 7.2% 7.5%
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Totals may not add due to rounding.
Sources: Ontario Ministry of Finance and Statistics Canada.

Personal Expenditure

In 2001, personal expenditure on consumer goods and services, the largest
component of GDP, increased 4.3% over 2000. From 1998 through 2001, personal
expenditure increased at an average annual rate of 5.6%.

Government Expenditure

Expenditure by the federal, provincial and municipal governments in Ontario
(excluding transfer payments and subsidies) comprised 19.1% of provincial output
in 2001.(1) From 1998 through 2001, government expenditure increased at an
average annual rate of 4.7%, compared to a GDP growth rate of 5.4% in current
dollars.

----------

(1) The National Income and Expenditure Accounts as produced by Statistics
Canada defines government expenditure to exclude transfer payments and
subsidies.

Capital Expenditure

In 2001, total capital expenditure was $80,419 million, or 18.1% of GDP, up
2.1% from $78,788 million in 2000. The major sources of total capital
expenditure were housing (26.4%), trade, commercial and information and cultural
industries (29.9%), manufacturing (11.4%), institutional services and government
departments (14.8%), transportation, warehousing and utilities (10.2%), primary
and construction industries (4.5%) and professional, scientific and technical
services (2.8%). From 1998 through 2001, total capital expenditure increased at
an average annual rate of 5.8%.

Business gross fixed capital formation in 2001 was $70,120 million. This
accounted for 87.2% of total capital expenditure and 15.8% of GDP at current
market prices.

Exports and Imports

In 2001, Ontario's exports of goods and services totaled $307,436 million,
the equivalent of 69.3% of Ontario's nominal GDP, of which 73.3% were
international exports and 26.7% were interprovincial exports. By comparison,
Ontario international exports represented 47.6% of Canada's total exports.
Ontario's imports of goods and services totaled $264,659 million in 2001,
resulting in a positive overall trade balance of $42,777 million.

Ontario's international goods exports include: motor vehicles and parts,
which accounted for 45.7% of its total value of merchandise exports in 2001;
capital equipment such as machinery, electrical and electronic goods, and
scientific and professional equipment, which accounted for 23.4%; industrial
materials such as steel, chemicals, plastics and rubber, which accounted for
15.5%; agricultural, forestry, energy and mining-related products, which
accounted for 9.5%; and consumer goods such as furniture, drugs and clothing,
which accounted for 3.6%. Ontario ranks alongside Japan and Germany as one of
the top three exporters of motor vehicles and parts, capital equipment and
industrial materials to the United States.

Ontario's leading interprovincial exports include financial, insurance and
real estate services, wholesale trade, food products, transportation equipment,
chemicals and electrical equipment.

Under the Free Trade Agreement ("FTA"), which came into force on January 1,
1989, tariffs between the United States and Canada were phased out entirely on
January 1, 1999. The North American Free Trade Agreement ("NAFTA") between
Canada, Mexico and the United States, which came into effect on January 1, 1994,
liberalizes trade with Mexico and improves on many of the provisions of the FTA.
A bilateral free-trade agreement between Canada and Chile came into force on
July 5, 1997. This Canada-Chile agreement, which provides for the liberalization
of trade and investment between the two countries, was negotiated to serve as an
interim step to bridge Chile's accession to NAFTA. In addition, a new World
Trade Organization Agreement ("WTO") (formerly the General Agreement on Trade
and Tariffs) was implemented on January 1, 1995. It has resulted in a 40%
reduction in average tariffs worldwide and makes major advances in rules
governing trade in agriculture, services and intellectual property.

(2) Recent Economic Developments

Real output in the Ontario economy grew by 1.1% in the second quarter of
2002 (April-June 2002), measured in 1997 dollars (4.4% annual rate), following a
strong first quarter advance of 1.8% (7.6% annualized). In current dollars,
nominal GDP rose 2.5% to reach an annualized level of $464.3 billion.

Growth in the second quarter of 2002 was well balanced across the economy
with consumer spending (+0.5%) and business investment (+3.9%) contributing to
growth. Growth was also provided as businesses replenished inventories by $4.5
billion in the second quarter of 2002, the first build-up since the second
quarter of 2001. Growth was partially offset by weaker residential (-0.3%) and
non-residential investment (-0.1%) and a narrowing of the trade balance as real
export growth lagged the surge in real import growth.

Total Ontario employment rose by 12,800 in November 2002. Total employment
in Ontario is up 97,100 over the first eleven months of 2002 compared to the
same period a year ago.

In November 2002, the Ontario unemployment rate was 6.7%, down from 6.8% in
November 2001.

In October 2002, the Ontario Consumer Price Index ("CPI") inflation rate
was 2.8%. Economic Outlook: 2002 to 2003

The 2002 Ontario Budget contained the economic projection for the Ontario
economy for 2002 and 2003. At the time of the June Budget, Ontario real GDP was
forecast to rise by 3.1% in 2002 and accelerate to 4.2% in 2003. The 2002
Ontario Economic Outlook and Fiscal Review contained an updated projection for
the Ontario economy based on the private-sector consensus economic projections
for Ontario.

Economic growth in 2002 has been stronger than expected at the time of the
June Budget. Private-sector forecasters now anticipate real growth of 3.5% for
2002, compared to 3.2% in June. Private-sector economists have lowered their
forecasts for 2003 real growth from an average of 4.3% at the time of the June
Budget to 3.5% currently. According to the latest average private-sector
forecast, Ontario's CPI inflation rate is expected to be 2.1% in 2002 and 2.4%
in 2003. Ontario's unemployment rate is projected to average 7.1% in 2002 and
6.7% in 2003, according to the average private-sector forecast.

Private-sector forecasts for Ontario growth are based on assumptions about
key features of the external environment, including interest rates and the U.S.
economy. According to the Ministry of Finance's financial market survey (October
2002), the Canadian three-month Treasury bill rate is expected to average 2.6%
in 2002 and 3.5% in 2003. The 10-year government of Canada bond rate is expected
to average 5.3% in both 2002 and 2003. According to Consensus Forecasts
(November 2002), the U.S. economy is expected to grow by 2.3% in 2002 and 2.7%
in 2003.

The foregoing private-sector consensus economic projections are used by the
Government primarily for purposes of the 2002 Ontario Economic Outlook and
Fiscal Review. They are included herein in order to disclose the principal
assumptions underlying such medium-term estimates and should not be deemed to be
representations of what actual economic results will be. Actual results are
subject to material variation based on a wide variety of factors, including
economic developments in the United States and in other external markets.

(3) Structure of the Economy

Secondary Industries

Manufacturing. Ontario is Canada's leading manufacturing province. In 2001,
Ontario's manufacturing volume of output (measured in 1997 dollars) at basic
prices totaled $81.1 billion, or 51% of the national total. The contribution of
manufacturing output to Ontario's total GDP (measured in 1997 dollars) at basic
prices was 20.0%.

MANUFACTURING REAL GROSS DOMESTIC PRODUCT
(measured in 1997 dollars) at Basic Prices (1)

Year ended December 31,
1997 1998 1999 2000 2001
(in millions)
Transportation Equipment.......................................$..16,043 $ 17,274 $ 20,302 $ 19,770 $ 18,067
Machinery, Electrical, Electronics & Computer.....................11,991 12,946 14,382 17,332 14,410
Primary & Fabricated Metal.........................................9,987 10,667 11,221 11,615 11,296
Food, Beverage & Tobacco...........................................8,845 9,577 9,428 9,652 10,253
Chemicals and Petroleum............................................6,733 7,092 7,389 7,420 7,448
Plastics & Rubber..................................................4,339 4,549 5,016 5,210 5,358
Paper and Wood.....................................................4,957 4,959 4,941 5,039 4,842
Furniture Products.................................................1,822 2,258 2,329 2,709 2,534
Printing...........................................................2,216 2,235 2,215 2,233 2,259
Non-Metallic Mineral Products......................................1,840 2,161 2,124 2,202 2,158
Textiles, Clothing, Leather & Allied Prod..........................1,806 1,968 1,795 1,731 1,598
Miscellaneous Manufacturing........................................1,069 1,174 1,232 968 873
Total..........................................................$..71,648 $ 76,860 $ 82,374 $ 85,881 $ 81,097

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Source: Statistics Canada.

(1) Includes taxes on production, mainly property taxes and payroll taxes.

Transportation equipment is Ontario's largest manufacturing industry
measured by output. In 2001, output in this sector totaled $18.1 billion, or
22.3% of total Ontario manufacturing output. Ontario accounted for 94.3% of
Canadian-manufactured motor vehicles, parts and accessories, and 15% of North
America's motor vehicle assembly. Ontario's international trade surplus in motor
vehicles and parts was $23.3 billion in 2001. Capital investment in Ontario's
transportation equipment industry totaled $2.8 billion in 2001 and capital
investment intentions for 2002, according to the latest survey from Statistics
Canada, are $2.8 billion.

In 2001, 56% of Canada's machinery, electrical, electronic and computer
products were produced in Ontario. A number of firms with worldwide reputations
in the design, manufacture and distribution of high technology products are
based in the Province. Ontario manufacturers as a whole conducted $5.2 billion
worth of industrial research and development in 2000, and accounted for 64.0% of
total Canadian manufacturing industrial research and development.

Construction. Ontario's capital spending on construction includes
buildings, roads and other facilities. Construction spending intentions,
according to the latest survey from Statistics Canada, indicate an expected rise
of 5% in 2002 to $39.1 billion. The highest increase is in government and
institutions at 10.5%, followed by housing at 9.4%. Capital expenditure on
housing constitutes 53% of the total.

ONTARIO CAPITAL EXPENDITURE

Year ended December 31,
1997 1998 1999 2000 2001 2002(1)
(in millions)
Housing................................. $ 14,364 $ 16,668 $ 17,863 $ 18,286 $ 19,002 $20,790
Business................................ 9,628 10,404 11,036 10,547 11,027 10,329
Government and Institutions............. 4,963 4,335 5,247 5,891 7,183 7,936
Total................................... $ 28,955 $ 29,407 $ 34,145 $ 37,924 $ 37,212 $39,055

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Source: Statistics Canada.
(1) Revised intentions 2002.

Primary Industries

Agriculture. Ontario has a large and highly diversified agricultural
sector. Agricultural activity can be found in most areas of the Province, but
production is concentrated in southwestern Ontario, which is located at roughly
the same latitude as Northern California and has a climate moderated by the
Great Lakes. Provincial agricultural production, based on farm cash receipts,
was valued at $7.7 billion in 2001, or 23.8% of the Canadian total - a greater
share than any other province.

AGRICULTURAL PRODUCTION

Year ended December 31,
1997 1998 1999 2000 2001
(in millions)
Agricultural Production(1)...... $ 6,757 $ 6,814 $6,888 $ 7,484 $ 7,711

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Source: Statistics Canada.
(1) Farm cash receipt; excludes government program payments.

Mining. Ontario's value of mineral production was $5,635 million in 2001.
Ontario accounted for 33.1% of Canadian metallic mineral production in 2001. The
Province's most important minerals in terms of 2001 value of production were:
nickel, $1,118 million; gold, $1,052 million; cement, $546 million; stone, $472
million and copper, $450 million. The quantity of nickel and gold mined
increased in 2001, but nickel's average price decreased while gold's average
price remained about the same.

MINERAL PRODUCTION

Year ended December 31,
1997 1998 1999 2000 2001
(in millions)
Mineral Production $ 5,615 $ 5,065 $5,224 $ 5,867 $ 5,635

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Source: Natural Resources Canada.

Forestry. Updated forest inventories show Ontario has about 540,000 square
kilometers of productive forestland representing 22% of the Canadian total.
Timber harvests from this forest base amounted to approximately 27 million cubic
meters in 2001. This supported various wood and paper industries in the Province
whose shipments totaled $15.7 billion in 2001, and equaled 25.4% of the Canadian
total.

Energy

The most recent data available on the energy sector is for 2000. In 2000,
the composition of Ontario's primary energy consumption was: petroleum 29.1%,
natural gas and liquids 29.3%, nuclear 15.7%, hydro-generated electricity 9.9%,
coal 13.6%, biomass 2.3% and net electricity purchases 0.1%.

Total primary energy use in 2000 increased 4.5% from 1999, with increases
in all fuel sources except nuclear. Most natural gas and crude oil is obtained
from Western Canada at competitive prices. Coal is obtained primarily from the
United States.

Service Sector

The service sector is the largest component of Ontario's economy,
accounting for approximately 70.2% of Ontario's GDP (measured in 1997 dollars)
at basic prices, in 2001. Ontario has a modern and diversified services sector.
It includes a wide variety of industries serving businesses, individuals and
governments.

SERVICES PRODUCING INDUSTRIES REAL GROSS DOMESTIC PRODUCT
(measured in 1997 dollars at Basic Prices)

Year ended December 31,
1997 1998 1999 2000 2001
(in millions)
Finance, Insurance and Real Estate(1)........ $ 43,771 $ 45,465 $ 49,093 $ 51,857 $ 54,070
Wholesale and Retail Trade................... 36,344 39,994 44,193 47,084 47,938
Professional, Scientific & Technical Services 13,909 15,677 18,060 20,085 21,561
Information and Cultural Industries.......... 11,434 12,133 14,716 16,712 18,429
Transportation and Warehousing............... 14,076 14,319 15,341 16,035 15,700
Administrative & Other Support Services...... 7,298 7,861 8,566 9,137 9,465
Accommodation and Food Services.............. 6,999 7,575 8,079 8,287 8,492
Arts, Entertainment and Recreation........... 3,169 3,140 3,373 3,598 3,638

Health Care and Social Assistance............ 19,705 19,889 20,617 21,076 21,712
Government Services.......................... 18,276 18,442 18,584 19,159 19,952
Educational Services......................... 16,920 17,179 17,503 17,430 17,489

Owner-Occupied Housing 27,984 28,665 29,780 30,594 31,419
Other Services............................... 7,404 7,711 8,184 8,339 8,587
Total........................................ $ 227,289 $ 238,050 $ 256,089 $ 269,393 $ 278,452
----------

Source: Statistics Canada.

(1) Excluding owner-occupied housing

Finance, insurance and real estate are the largest component of Ontario's
service sector output. In 2001, Ontario's share accounted for 48% of Canada's
finance, insurance and real estate output, the highest share of any province.

Ontario's sizable financial services sector is due in large part to the
large number of head offices of industrial and financial companies located in
the Toronto area. The Toronto Stock Exchange ("TSX") is Canada's premiere stock
exchange with value of trading of $712.5 billion in 2001.

Ontario also has a strong presence in professional, scientific and
technical services output, accounting for 49% of the Canadian total. Wholesale
and retail trade help support the spending of business and consumers, including
investment and imports. Ontario accounts for 45% of Canada's wholesale and
retail trade output and 44% of Canada's information and cultural services.

(4) Labour Force

From 1996 to 2001, Ontario's labour force increased at an average annual
rate of 2.1%, while Canada's increased at an average annual rate of 1.6%. During
2001, the Ontario labour force averaged approximately 6.36 million persons. In
2001, the Ontario participation rate of 67.3% was 1.3 percentage points higher
than the Canadian rate. Reflecting the industrial structure of the Province,
98.6% of employment was in the non-agricultural sector. The service sector,
which has been a major source of employment growth, accounted for 73.1% of
Ontario's employment, while manufacturing and construction accounted for 24.0%
and agriculture, utilities and other primary industries accounted for 2.9%. In
2001, the unemployment rate averaged 6.3%, 0.9 percentage points below the
national average of 7.2%.

LABOUR FORCE

1997 1998 1999 2000 2001
The Ontario Labour Force
Labour Force (thousands) 5,801.4 5,914.3 6,070.8 6,227.9 6,364.4
Employed (thousands)... 5,313.4 5,490.0 5,688.1 5,872.1 5,962.7
Unemployment Rate (%).. 8.4 7.2 6.3 5.7 6.3
Participation Rate (1)(%) 65.8 66.0 66.6 67.2 67.3
The Canadian Labour Force
Unemployment Rate (%).. 9.1 8.3 7.6 6.8 7.2
Participation Rate (1)(%) 64.9 65.1 65.6 65.9 66.0

----------

Source: Statistics Canada.

(1) The percentage of working age population in the labour force.

ONTARIO EMPLOYMENT BY INDUSTRY-- 2001

Thousands % Of Total
Agriculture................ 84 1.4
Other Primary Industries... 38 0.6
Manufacturing.............. 1,088 18.2
Construction............... 343 5.8
Utilities.................. 50 0.8
Service Sector............. 4,361 73.1
Total...................... 5,963 100.0

----------

Totals may not add due to rounding.

Sources: Statistics Canada and Ontario Ministry of Finance.

(5) Social Security System

The Province provides a wide range of health care, social services and
income security assistance to Ontarians. Until 1995-96, the Province received
funding for health care from the Federal Government under the Established
Programs Financing ("EPF") arrangements. This national funding arrangement
provided support for the provision of provincial health care programs as well as
post-secondary education.

The Province also provides income security assistance to individuals and
families to replace earnings or provide income support. Until 1995-96, income
supplementation related to defined needs was provided, when necessary, on a
cost-shared basis with the Federal Government under the Canada Assistance Plan
("CAP"). In their 1995 budget, the Federal Government announced major cutbacks
to social transfers to the provinces and territorial governments. Beginning in
1996-97, the EPF arrangements and CAP were replaced by the Canada Health and
Social Transfer ("CHST"). See "3. Public Finance-- (3) Revenue-- Federal
Government Payments" below.

The Federal Government also provides the Employment Insurance ("EI")
program and the Canada Pension Plan ("CPP"), a national contributory
earnings-related pension system. CPP Benefits include retirement pensions,
disability pensions, survivor benefits, orphan benefits and death benefits. In
2001, Ontario residents received about $10.4 billion in net benefits from the
CPP and about $3.9 billion in total benefits from EI. Both of these programs are
financed through payroll taxes paid by employers and employees. The EI Account
is included in the federal budget and is administered through a federal
ministry. The CPP Account is separate from the federal budget, managed
independently by the CPP Investment Board and invested in marketable and
non-marketable securities.

The Federal Government also provides universal and income-tested support
for senior citizens through Old Age Security ("OAS") pensions, the Guaranteed
Income Supplement ("GIS") program and Spouse's Allowance. The Ontario government
provides an income-tested supplement for seniors, the Guaranteed Annual Income
System ("GAINS"), which is paid to GIS recipients with low incomes. In 2001-02,
seniors in Ontario received a total of about $780 million from these federal
programs and about $83 million from GAINS.

In addition, the federal and provincial governments provide cash transfers
to families raising children. The federally administered National Child Benefit
("NCB") provides basic benefits to most families with children as well as
targeted benefits to low-income families with children. Ontario families
received about $2.7 billion in NCB benefits in 2001-02. The Ontario government
provides children's benefits through the Ontario Child Care Supplement ("OCCS")
for Working Families. The OCCS provides about $215 million annually in tax-free
benefits to low- to middle-income working families with young children.

The Ontario government and municipalities jointly share responsibility for
providing income support to individuals and families whose income is
insufficient to meet their basic needs. In 2001-02, about $3.9 billion in cash
transfers were provided through social assistance programs.

(6) Government Responsibilities and Relationships

Constitutional Framework

Canada is a federation and its constitution (the "Constitution") provides
for a division of responsibilities between the federal and provincial
governments. Each province and the Federal Government have supremacy within its
respective sphere of assigned responsibilities. Jurisdiction over the
establishment and operation of municipalities is granted exclusively to the
provinces.

The Federal Government is empowered to raise money by any mode or system of
taxation. It has exclusive jurisdiction over such matters as the regulation of
trade and commerce, currency and coinage, banks and banking, national defence,
foreign affairs, postal services, railways and navigation, as well as those
areas not exclusively assigned to the provinces. Each province has authority to
raise revenue through direct taxation within the province. Areas of provincial
constitutional authority include health care, education, social services,
municipal institutions, property and civil rights and natural resources.

The Constitution of Canada was amended in 1982. The Constitution Act, 1982
(the "Constitution Act") established a Charter of Rights and Freedoms and a
procedure for amending the Constitution. Nothing in the Constitution Act
diminishes the taxing or spending authority of the provinces.

Operational Framework

Ontario administers its constitutional responsibilities through government
ministries and provincially created bodies such as government-owned corporations
("Crown corporations"), agencies, boards, commissions, municipalities, school
boards and hospital boards. The use of these quasi-independent bodies
decentralizes the administration of provincial responsibilities. However, the
Province has elected to centralize the financing of these bodies by retaining
the major taxing and borrowing powers at the provincial level. Some
municipalities borrow in their own names in various capital markets (See "4.
Public Debt-- (4) Consolidated Debt of the Ontario Public Sector" below) as did
Ontario Hydro prior to its restructuring in April 1999 (See "4. Public Debt--
(3) Financial Assets and Liabilities-- (ii) Financial Assets-- Restructuring of
Ontario Electricity Industry" below).

Implications for Provincial Financial Statements

The provinces have been assisted with their responsibilities in areas such
as health, post-secondary education and social assistance by transfer payment
arrangements between the federal and provincial governments. Through these
arrangements, the Federal Government provides revenues to provincial governments
to finance programs under provincial jurisdiction.

Federal-provincial funding arrangements create extensive financial
interrelationships between the Province, the Federal Government and
provincially-created bodies. These financial interrelationships are important in
understanding the revenue, expenditure and financing activity of the Province.
For example, in fiscal 2002-03, approximately 12.4 % of the Province's revenue
is expected to come from the Federal Government. At the same time, almost $19.1
billion, or approximately 31% of total provincial operating expenditure in
fiscal 2001-02, were in the form of provincial transfer payments to fund
hospitals, colleges, universities, and school boards.

Borrowing on behalf of, and investing in, provincially-created bodies have
an impact on the reporting of assets and liabilities. As at March 31, 2002,
approximately 7.1% of the debt and 54.5% of the assets of the Province could be
attributed to these intermediary activities. (See "4. Public Debt-- (3)
Financial Assets and Liabilities" below).

3. PUBLIC FINANCE

(1) Financial Reporting

Overview

Provincial legislation requires that all financial transactions of the
Province flow through the Consolidated Revenue Fund, which is administered by
the Minister of Finance. Annually, the Province publishes its Public Accounts,
which include the summary financial statements for the fiscal year ended March
31, together with schedules, ministry statements, financial statements of
selected Crown corporations, boards and commissions and other miscellaneous
financial statements, and details of revenue and expenditure. The Provincial
Auditor examines the Public Accounts of the Province and provides an opinion
thereon to the Legislative Assembly. In addition, the Provincial Auditor is
required to submit an annual report to the Legislative Assembly.

The summary financial statements in the Public Accounts of the Province
reflect accrual and consolidation accounting recommended by the Public Sector
Accounting Board ("PSAB") of the Canadian Institute of Chartered Accountants
("CICA") and, where applicable, the CICA Handbook for private and public sector
corporations in Canada.

On a modified accrual basis, financial transactions are recognized as they
occur rather than when cash is received or paid. Revenues are recognized when
earned, financial assets when acquired, expenditures when incurred and the costs
of tangible capital assets are recognized as expenditures when these assets are
acquired or constructed. In the financial statements, the Province's accounting
method is referred to as "modified accrual and consolidation" because spending
on capital projects is treated as expenditure, instead of being capitalized and
depreciated. Beginning in fiscal year 2002-03, the Province will report its
investment in major tangible capital assets that are owned by the Province on
the Statement of Financial Position, and their cost will be amortized over their
useful life and recorded as amortization expense in the financial statements.
The Province intends to take a phased in approach and will initially report
land, buildings and transportation infrastructure in fiscal year 2002-03, with
the remaining tangible capital assets owned by the Province being reported in
subsequent fiscal years. It is estimated that more than ninety per cent of the
tangible capital assets owned by the Province will be captured under the land,
buildings and transportation infrastructure categories.

Reporting Entity

The financial statements report the activities of the Consolidated Revenue
Fund combined with those organizations that are accountable for the
administration of their financial affairs and resources, either to a minister of
the government or directly to the Legislature, and that are owned or controlled
by the government. All of these organizations that meet one of the following
criteria are individually consolidated: i) revenues, expenditures, assets or
liabilities greater than $50 million or ii) outside sources of revenues, deficit
or surplus greater than $10 million. The activities of all other organizations
are reflected in the financial statements through the accounts of the ministries
responsible for them. Trusts administered by the government on behalf of other
parties are excluded from the financial statements.

Principles of Consolidation

Government organizations such as Crown corporations, boards and
commissions, except for government business enterprises, are consolidated on a
line-by-line basis with the Consolidated Revenue Fund in the financial
statements. Where necessary, adjustments are made to present the accounts of
these organizations on a basis consistent with the accounting policies described
below, and to eliminate significant inter-organization accounts and
transactions.

Government business enterprises are defined as those government
organizations that (i) have the financial and operating authority to carry on a
business, (ii) have as their principal activity and source of revenue the
selling of goods and services to individuals and non-government organizations
and (iii) are able to maintain their operations and meet their obligations from
revenues generated outside the government reporting entity. The activities of
government enterprises are recorded in the financial statements using the
modified equity method. Under this method, government enterprises are reported
in accordance with the accounting principles generally accepted for business
enterprises. Their combined net assets are included in the financial statements
as Investment in Government Business Enterprises on the Statement of Financial
Position and their combined net income is shown as a separate item on the
Statement of Revenue, Expenditure and Net Debt. The tangible capital assets of
government business enterprises are included in the Statement of Financial
Position under Investments in Government Business Enterprises.

Special reporting status is accorded to the Ontario Electricity Financial
Corporation ("OEFC"), a government organization. The financial statements report
the net impact of OEFC's excess (shortfall) of revenues over expenses as
decrease (increase) in Stranded Debt from Electricity Sector Restructuring to be
Recovered from Ratepayers and its Unfunded Liability as Stranded Debt from
Electricity Sector Restructuring to be Recovered from Ratepayers in the
Statement of Revenue, Expenditure and Net Debt. This accounting reflects the
legislative structure put in place to ensure OEFC's revenues are derived from
the electricity sector ratepayer and not the taxpayer, and that these revenues
can be used only to service and retire OEFC debt.

Prior to its restructuring, Ontario Hydro was excluded from consolidation
because its governing legislation precluded distribution of equity from Ontario
Hydro to the Province. The Workplace Safety and Insurance Board is also excluded
in compliance with PSAB recommendations regarding trust funds under
administration by the government.

Measurement Uncertainty

Uncertainty in the determination of the amount at which an item is
recognized in the financial statements is known as measurement uncertainty. Such
uncertainty exists when it is reasonably possible that there could be a material
variance between the recognized amount and another reasonably possible amount,
as there is whenever estimates are used. Estimates are based on the best
information available at the time of preparation of the financial statements and
are adjusted annually to reflect new information as it becomes available.
Measurement uncertainty in the financial statements exists in the accruals for
pension obligations, personal income tax, corporations' tax, restructuring
charges and the stranded debt from electricity sector restructuring.

The nature of uncertainty in the pension accrual arises because actual
results may differ significantly from the Province's best estimates of expected
results. Uncertainty related to the accrual for personal income tax and
corporations arises because of the possible differences between the estimated
and actual economic growth and future tax assessments on taxes receivable.
Uncertainty exists with respect to restructuring charges as the actual
expenditures, incurred in the transfer and restructuring of certain programs and
services, may differ from the initial estimates of expected costs.

Uncertainty in the stranded debt from electricity sector restructuring
arises from the numerous estimates and assumptions made about the future
defeasance of this debt.

Financial Transactions

The Province's transactions are recorded under the following categories:
revenue, expenditure, liabilities and financial assets. Revenue includes
taxation, sale and rentals, royalties, fees, licenses, permits, and payments
from the Federal Government under fiscal arrangements and shared cost programs.
Expenditures include transfer payments to individuals, local governments and
institutions, interest on debt, salaries and employee benefits, supplies and
equipment, acquisition and construction of physical assets, capital leases,
transportation and communication, services, grants, restructuring, retirement
benefits and other charges.

Liabilities are recorded to the extent that they represent obligations of
the government to outside parties as a result of events and transactions
occurring prior to the year-end. Liabilities include accounts payable and
accrued liabilities, debt issued for Provincial purposes, and for investment in
the Electricity Sector, deposits with the Province of Ontario Savings Office,
the liabilities for the Public Service Pension Plan ("PSPP"), the Ontario Public
Service Employee's Union Pension Plan ("OPSEU Pension Plan") and the Ontario
Teachers' Pension Plan ("OTPP"), obligations to government business enterprises,
retirement benefits and other liabilities. Liabilities also include probable
losses on loan guarantees issued by the government, and contingencies when it is
likely that a loss will be realized and the amount can be reasonably determined.

Debt Issued for Provincial Purposes and Debt Issued for Investment in
Electricity Sector are comprised of treasury bills, commercial paper, medium and
long-term notes, savings bonds, debentures and loans. Debt denominated in
foreign currencies that has been hedged is recorded at the Canadian dollar
equivalent using the rates of exchange established by the terms of the
agreements. Other foreign currency debt, liabilities and assets are translated
to Canadian dollars at year-end rates of exchange and any exchange gains or
losses are amortized over the remaining term to maturity. The Province uses
derivative financial instruments ("derivatives") for the purposes of minimizing
interest costs and risk management. Derivatives are financial contracts, the
value of which is derived from underlying instruments. Gains or losses arising
from derivative transactions are deferred and amortized over the remaining life
of the related debt issue.

Interest on Debt Issued for Provincial Purposes and Debt Issued for
Investment in Electricity Sector includes: i) interest on outstanding debt; ii)
amortization of foreign exchange gains or losses; iii) amortization of debt
discounts, premiums and commissions; iv) amortization of deferred hedging gains
and losses; and v) interest income on investments and loans.

The retirement benefits liability comprises the government's share of the
value of retirement benefits attributed to services rendered by employees and
former employees, unamortized experience gains or losses, various adjustments
for items such as different fiscal year-ends between the retirement benefits
plans and the Province, unamortized initial unfunded liability for jointly
sponsored plans, unamortized balances related to temporary deviation from the
plans and contributions payable by the Province that are reflected in the plan
assets, less the government's share of the assets of the plans. The retirement
benefits liability is calculated on an actuarial basis using the government's
best estimate of future inflation rates, investment returns, employee salary
levels and other underlying assumptions, When actual plan experience differs
from that expected, or when assumptions are revised, gains and losses arise.
These gains and losses are amortized over the average remaining service life of
plan members.

For significant capital leases entered into by the Province, an amount
equal to the present value of the minimum lease payments required over the term
of the lease is recorded as an expenditure at the inception of the lease, with
an offsetting liability recorded for the lease obligation.

Financial assets include cash and claims by the Province arising from
events and transactions occurring prior to the fiscal year-end. "Investment in
Government Business Enterprises", included in financial assets, represents the
net assets of government enterprises accounted for on a modified equity basis.

Accounting Changes and CCRA Error

Accounting policies and practices must constantly evolve to reflect
changing conditions and approaches. Changes are made to accounting policies in
order to conform to new PSAB recommendations or to more appropriately present
events or transactions in the financial statements. Changes are also made to
correct any errors in a prior period statement. Unlike revisions of estimates,
proper accounting treatment requires that a change in an accounting policy or
correction of an error be applied retroactively to prior years' results. Both
types of accounting changes were made in the 2001-02 financial statements and
the results for fiscal year 2000-01 were restated.

CCRA Error: An error was made by the Canada Customs and Revenue Agency
("CCRA") which had resulted in overpayments of personal income tax revenue to
the Province. The CCRA collects and administers the personal income tax of all
provinces except Quebec. The Federal Government announced on January 29, 2002,
that they had not properly deducted the provincial portion of capital gains
refunds paid to mutual fund trusts from the Personal Income Tax revenue remitted
to provinces. The Federal Government intends to recover $1,330 million for
taxation years from 1997 to 1999. As well, when the federal error relating to
mutual fund trusts became known, the Province provisionally recognized that $713
million of the estimated receivable relating to trust income taxes would not be
collectable and accordingly restated the 2000-01 amounts in its 2001-02
financial statements.

Ontario disagrees with the position taken by CCRA and the Federal
Government on this matter. However, in the Province's financial statements the
CCRA error has been accounted for in a manner that is consistent with PSAB
Recommendations. In its Public Accounts for fiscal 2001-02, the Province
specifically stated that the manner in which the Province has accounted for
CCRA's and the Federal Government's failure in allocation of personal income
taxes to Ontario is without prejudice to any claim, demand, application, action,
representation legal proceeding or other such statement or step as may be taken
by Ontario against CCRA, the Federal Government, or both of them, in respect of
this specified failure. Furthermore, the content of the Public Accounts of
Ontario is expressly stated to not estop Ontario from instituting any claim,
application, action or other legal proceeding against CCRA, the Federal
Government, or both of them, for making any such demand, representation or such
other statement in respect of this failure by CCRA, the Federal Government, or
both of them. In addition, nothing in the Public Accounts of Ontario estops
Ontario from making any claim, demand, application, action, negotiation,
representation, legal proceeding or other such statement or step as may be taken
by Ontario in respect of any other matter in the collection and remission of
personal income taxes by CCRA or the Federal Government to Ontario and the
Public Accounts of Ontario are therefore presented without prejudice to any such
claim, demand, application, action, representation, legal proceeding or other
such statement or step as may be taken by Ontario against CCRA, the Federal
Government, or both of them.

Accounting Policy Changes: During fiscal year 2001-02 the Province changed
its accounting policy for pensions and other retirement benefits in accordance
with new recommendations issued by PSAB in September 2001. Under the new policy,
the cost of plan amendments is effectively amortized by offsetting it against
any unamortized gains. Another change is the recognition of the cost of
retirement benefits other than pensions (e.g. medical, dental) when earned by
employees rather than when paid out.

Ontario Power Generation Inc. ("OPG") which is accounted for as a
government business enterprise, restated their net income and opening retained
earnings for calendar year 2000 to reflect a change in accounting policy for
pensions and other retirement benefits. This resulted in a corresponding
restatement for the Province.

The net impact of the provisional adjustment for CCRA error and accounting
changes was to decrease the surplus for fiscal year 2000-2001 from $3,325
million to $1,902 million and to increase Net Provincial Debt and Stranded Debt
from Electricity Sector Restructuring at March 31, 2001 from $130,424 million to
$132,496 million.

The Budget

Traditionally, a Budget is tabled each year by the Ontario Minister of
Finance in the Legislative Assembly, setting out the expenditure program and
revenue forecast for activities to be undertaken for Provincial purposes. A
publication entitled "Ontario Finances" provides a quarterly update to reflect
in-year developments, budget performance and policy actions.

(2) Fiscal Position

The following table provides an overview of the Province's revenue,
expenditure and surplus (deficit) for each of the fiscal years in the five-year
period ending March 31, 2002 and information from the 2002-03 Second Quarter
Ontario Finances. The difference between revenue and expenditure is the
"surplus" or "deficit" with adjustments for the reserve and any decrease
(increase) in stranded debt to be recovered from ratepayers.

ONTARIO'S FISCAL POSITION

Rate of Growth
Restated(7) Outlook 2001-02 to
1997-98 1998-99 1999-00 2000-01 2001-02 2002-03(1) 2002-03
(in millions) (%)
Revenue
Taxation Revenue............ $ 41,269 $ 43,077 $ 45,881 $ 48,569 $47,638 $ 48,345 1.5
Federal Payments.......... 5,098 4,515 5,885 6,129 7,754 8,245 6.3
Income from Investment
In Government Business 2,291 2,547 3,708 3,855 3,345 3,743 11.9
Enterprises.............
Other Revenue (4)......... 3,860 5,647 7,457 5,271 5,149 6,278 21.9
Total Revenue............... 52,518 55,786 62,931 63,824 63,886 66,611 4.3
Expenditure
Programs.................. 45,304 46,557 47,525 50,401 52,523 54,494 3.8
Gross Capital Expenditure. 2,451 2,215 4,887 2,123 1,890 2,715 43.7
Less: Net Investment in
Capital.....................
Assets*................... -- -- -- -- -- 634 N/A
Public Debt Interest (2)
Provincial.............. 8,729 9,016 8,977 8,896 8,509 8,505
Electricity Sector...... -- -- 520 520 520 520 --
Total Expenditure........... 56,484 57,788 61,909 61,940 63,442 65,600 3.4
Less: Reserve (3)........... -- -- -- -- -- 1,000 N/A
Add: Decrease/(Increase) in
Stranded Debt to be
recovered -- -- (354) 18 (69) (11) (84.1)
From Ratepayers (5).......
Surplus/(Deficit)........... $ (3,966) $ (2,002) $ 668 $ 1,902(6) $ 375 $ 0 --

----------

Source: Ontario Ministry of Finance.

(1) Outlook 2002-03 refers to information contained in the 2002-03 Second
Quarter Ontario Finances and the 2002 Ontario Economic Outlook and Fiscal
Review, which updates the 2002 Ontario Budget.

(2) Starting in 1999-00, Public Debt Interest includes $520 million related to
the Province's equity investment in the electricity sector.

(3) Ontario's 2002-03 Budget Plan included a $1 billion reserve designed to
protect the balanced budget against unexpected and adverse changes in the
economic and fiscal outlook. The reserve will be available for debt
reduction at year-end if not needed.

(4) Includes $1,616 million for the net proceeds from the sale of Highway 407
in 1999-00. Other Revenue is expected to increase in 2002-03, mainly due to
higher Sales and Rentals revenue anticipated from the commercialization of
government enterprises.

(6) Surplus after Provisional Adjustment for CCRA Error and Accounting Changes.

(7) Fiscal 2000-01 has been restated to reflect the accounting changes. See "3.
Public Finance - (1) Financial Reporting - Accounting Changes".

Fiscal Plan 2002-03

The 2002-03 fiscal outlook is on track with the Budget Plan. As of
September 30, 2002, a balanced budget is projected, unchanged from the Budget
Plan.

Revenues

Revenue in 2002-03 is projected at $66,611 million, $2,725 million or 4.3
per cent above the level recorded in 2001-02.

Personal Income Tax ("PIT") revenue is expected to decline slightly in
2002-03 by $12 million. This reflects the inclusion in 2001-02 revenues of $438
million in one-time revenue due to higher 2000-01 PIT revenue than estimated in
the 2000-01 Public Accounts. The full-year benefit to taxpayers of the tax cuts
implemented on October 1, 2001 also lowers short-term PIT revenue growth.

The expected rebound in consumer spending following the 2001 economic
slowdown will boost Retail Sales Tax revenues in 2002-03 by $427 million.

Corporations Tax revenues are expected to decline in 2002-03 by $496
million. The decline in revenues reflects continuing weakness in corporate
profits and the full-year impact of the tax actions effective October 1, 2001.
With pre-tax corporate profits expected to be flat in 2002, there is very little
growth in the corporate tax base assumed for 2002-03.

Revenue from all other taxation revenue sources combined is expected to
rise sharply in 2002-03 by $788 million, primarily due to higher Tobacco Taxes,
which are projected to increase by $522 million.

In 2002-03, transfers from the Government of Canada are expected to
increase by $491 million over 2001-02. This is mainly due to an expected
increase of $597 million in Canada Health and Social Transfer ("CHST") payments.
Other federal transfers are forecast to decline $106 million in 2002-03.

Income from Investment in Government Business Enterprises is projected to
increase in 2002-03 by $398 million largely due to the improved net income of
Ontario Power Generation Inc.

Other Revenue is expected to increase in 2002-03 by $1,129 million. This is
mainly due to higher Sales and Rentals revenue anticipated from the
commercialization of government enterprises.

Expenditure

Total expenditure for 2002-03 at $65,600 million as of Second Quarter
Ontario Finances, is up a net $67 million from the Budget Plan and $65 million
from First Quarter Ontario Finances, mainly due to increased support for Ontario
farmers and additional forest fire-fighting costs, partially offset by lower
Public Debt Interest ("PDI") costs. Total expenditure in 2002-03 is up $2,158
million from the 2001-02 level of $63,442 million, mainly due to increased
health care, and schools and post-secondary education spending. The government's
expenditure plan continues to focus on priority sectors, including health care
and education, while improving efficiency and effectiveness in the delivery of
government services. In 2002-03, total health care funding (operating and
capital including major onetime costs) will rise to $25,794 million, a $1,686
million increase above the 2001-02 level. In 2002-03, total spending on schools
and post-secondary education will be $12,493 million. Schools will receive $8.3
billion in provincial grants while colleges and universities will receive $2.6
billion (includes general operating grants to colleges and universities, grants
under the Access to Opportunities Program and Nursing Collaborative Programs)
and other programs, including training programs and support for students in
post-secondary education as well as Provincial expenditure related to the
Teachers' Pension Plan, will receive almost $1.6 billion.

Reserve

Ontario's 2002-03 fiscal plan includes a $1 billion reserve designed to
protect the balanced budget against unexpected and adverse changes in the
economic and fiscal outlook. The reserve will be available for debt reduction at
year-end if not needed. With continued uncertainty in the economic and fiscal
outlook and consistent with prudent fiscal planning, the reserve was maintained
at second quarter to protect the balanced budget.

Balanced Budget Plan

In 1999-2000, Ontario recorded a $668 million surplus, balancing the budget
one full year ahead of the schedule laid out in the government's Balanced Budget
Plan. With a $1,902 million surplus in 2000-01 and $375 million surplus in
2001-02, Ontario has now achieved three consecutive surpluses for the first time
in nearly 100 years.

In the 2000 Ontario Budget the government made a commitment to reduce Net
Provincial Debt by at least $5 billion during its current term of office. Net
Provincial Debt, prior to the provisional adjustment for Canada Customs and
Revenue Agency ("CCRA") error and accounting changes, has been reduced by $4.5
billion over the past three years, an amount representing more than 90 per cent
of the government's debt-reduction commitment.

2002-03 Fiscal Plan and Medium-Term Outlook

The 2002-03 fiscal plan and medium term outlook below is extracted from
material presented by the Minister of Finance with the 2002 Budget and the
2002-03 Second Quarter Ontario Finances, which updates the 2002 Budget. As
reported at Second Quarter, the 2002-03 fiscal outlook is on track with the
Budget Plan. As of September 30, 2002 a balanced budget is projected, unchanged
from the 2002 Ontario Budget.

FISCAL SUMMARY

Actual Outlook Forecast
2001-02 2002-03(1) 2003-04(2)
(in billions)
Revenue......................................................... $ 63.9 $ 66.6 $ 68.3
Expenditure
Programs................................................... 52.5 54.5 56.1
Gross Capital Expenditure.................................. 1.9 2.7 2.8
Less: Net Investment in Capital Assets..................... -- 0.6 0.5
Public Debt Interest (3)
Provincial............................................ 8.5 8.5 8.4
Electricity Sector.................................... 0.5 0.5 0.5
Total Expenditure............................................... 63.4 65.6 67.3
Less: Reserve (4)............................................... -- 1.0 1.0
Add: Decrease/(Increase) in Stranded Debt to be Recovered
from Ratepayers (5)........................................... (0.1) 0.0 0.3
Surplus/(Deficit)............................................... $ 0.4 $ 0.0 $ 0.3

----------

Source: Ontario Ministry of Finance

Note: Totals may not add due to rounding.

(1) Outlook 2002-03 refers to information contained in the 2002-03 Second
Quarter Ontario Finances and the 2002 Ontario Economic Outlook and Fiscal
Review, which updates the 2002 Ontario Budget.

(2) Forecast 2003-04 refers to information contained in the 2002 Ontario
Budget.

(3) Starting in 1999-00, Public Debt Interest includes $520 million related to
the Province's equity investment in the electricity sector.

(4) Ontario's 2002-03 fiscal plan includes a $1 billion reserve for 2002-03 and
2003-04 to protect the balanced budget against unexpected and adverse
changes in the economic and fiscal outlook. The reserve will be available
for debt reduction at year-end if not needed.

(3) Revenue

Overview

The following table sets forth historical revenue information for each of
the fiscal years in the five-year period ended March 31, 2002 and information
from the 2002-03 Second Quarter Ontario Finances which updates the 2002 Budget.

Total revenue in fiscal 2002-03 is projected to be $66,611 million. Tax
revenue is projected at $48,345 million or 72.6 per cent of total revenue.
Federal transfers, at $8,245 million are 12.4 per cent of total revenue. All
other revenues, including Income from Investment in Government Business
Enterprises, are projected to be $10,021 million, 15.0 per cent of total
revenue.

ONTARIO'S REVENUE

% of Total
Restated(7) Outlook Revenue
1997-98 1998-99 1999-00 2000-01 2001-02 2002-03(1) 2002-03
(in millions)
Taxation Revenue
Personal Income Tax (2).......... $ 16,293 $ 17,190 $17,617 $ 17,911 $19,097 $ 19,085 28.7
Retail Sales Tax................. 10,843 11,651 12,879 13,735 13,803 14,230 21.4
Corporations Tax................. 7,456 7,447 8,095 9,200 6,646 6,150 9.2
Employer Health Tax.............. 2,851 2,882 3,118 3,424 3,502 3,695 5.5
Gasoline & Fuel Taxes............ 2,591 2,660 2,819 2,820 2,851 2,960 4.4
Tobacco Tax...................... 425 447 481 504 703 1,225 1.8
Land Transfer Tax................ 565 470 565 642 665 775 1.2
Other Taxation................... 245 330 307 333 371 225 0.3
41,269 43,077 45,881 48,569 47,638 48,345 72.6
Other Revenue
Income from Investment In
Government Business Enterprises(4) 2,291 2,547 3,708 3,855 3,345 3,743 5.6
Vehicle/Driver Registration Fees. 820 890 911 929 941 963 1.4
Liquor Licensing Board of Ontario
Revenues....................... 506 519 539 525 530 515 0.8
Other Fees and Licenses.......... 548 661 667 660 627 692 1.0
Royalties........................ 286 289 345 235 224 237 0.4
Sales and Rentals (5)............ 582 640 2,133 637 344 2,424 3.6
Independent Electricity Market
Operation Revenues............... -- -- 314 344 384 181 0.3
Local Service Realignment (3).... 519 2,109 1,678 1,407 1,116 751 1.1
Miscellaneous (6)................ 599 539 870 534 983 515 0.8
6,151 8,194 11,165 9,126 8,494 10,021 15.0
Payments from the Federal Government
Canada Health and Social
Transfer ...................... 3,970 3,553 4,722 4,895 6,211 6,808 10.2
Other Federal Payments........... 1,128 962 1,163 1,234 1,543 1,437 2.2
5,098 4,515 5,885 6,129 7,754 8,245 12.4
Total Revenue...................... $ 52,518 $ 55,786 $62,931 $ 63,824 $63,886 $ 66,611 100.0

----------

Source: Ontario Ministry of Finance.

Totals may not add due to rounding.

(1) Outlook 2002-03 refers to information contained in the 2002-03 Second
Quarter Ontario Finances and the 2002 Ontario Economic Outlook and Fiscal
Review, which updates the 2002 Ontario Budget.

(2) Net of tax credits of $1,038 million for 1997-98; $1,032 million for
1998-99; $1,028 million for 1999-00, $1,012 million for 2000-01, $999
million for 2001-02 and $ 1,021 million for 2002-03.

(3) Refers to transition measures in the form of reimbursement of expenditures
on behalf of municipalities under the local services realignment exercise.

(4) Starting in 1999-00 includes net income of Ontario Power Generation Inc.
("OPG") and Hydro One Inc. ("HOI").

(5) Includes $1,616 million for the net proceeds from the sale of Highway 407
in 1999-00. In 2002-03, higher Sales and Rentals revenue is anticipated
from the commercialization of government enterprises.

(6) Miscellaneous now includes Fines and Penalties.

(7) Fiscal 2000-01 has been restated to reflect the accounting changes. See "3.
Public Finance - (1) Financial Reporting - Accounting Changes".

Taxation

The Constitution provides for a division of taxation authority between the
federal and provincial governments. Local governments derive their taxing powers
from the Province. In accordance with its policy of centralized financing, the
Province has delegated its taxing powers respecting real property taxes to local
governments.

Personal Income Tax. Ontario and the Federal Government impose a personal
income tax ("PIT") on individuals resident in Ontario. This tax is the
Province's largest single source of revenue.

Beginning with the 2000 taxation year, Ontario basic PIT is calculated as a
percentage of taxable income. It is collected by the Federal Government on
Ontario's behalf. The tax rates for 2001 are as follows: 6.16% of the first
$30,814 of taxable income plus 9.22% of the portion of taxable income between
$30,814 and $61,629, plus 11.16% of the portion of taxable income over $61,629.
Ontario non-refundable tax credits are provided for individual and family
circumstances (e.g., basic amount, spouse, medical expenses), at the rate of
6.16% in 2001 (and 11.16% for charitable donations in excess of $200), before
calculating the provincial surtax or Ontario Tax Reduction.

Ontario also applies a surtax on higher-income earners. For the 2001
taxation year, the surtax is equal to 20% of basic Ontario PIT in excess of
$3,560, plus an additional 36% of basic Ontario PIT in excess of $4,491. For
taxpayers with low or moderate incomes, the Ontario Tax Reduction reduces or
eliminates Ontario PIT.

Retail Sales Tax. Ontario applies an 8% tax on the retail sales of most
tangible personal property, prepared food priced at $4 and over and some
services, including group insurance premiums. Other rates apply to certain goods
and services, such as 5% on transient accommodation, 10% on admissions priced
over $4 to places of amusement and on alcoholic beverages purchased at licensed
premises, and 12% on alcohol purchased at retail outlets. There are exemptions
from retail sales tax, including those for groceries, prescription drugs,
children's clothing, farm equipment, farm building materials and production
machinery and equipment. The 2000 Ontario Budget announced the phase-out of
retail sales tax on motor vehicle insurance premiums and on repairs and
replacements made under warranty in stages until the tax is eliminated in 2004.

Under the Retail Sales Tax Act, the Tax for Fuel Conservation applies upon
the purchase or lease of a new passenger vehicle or sport utility vehicle and is
based on the published highway fuel efficiency rating of the vehicle. Light
trucks and vans are not subject to this tax. The tax applies to all passenger
vehicles with a fuel efficiency rating of 6.0 litres of gasoline or diesel fuel
per 100 kilometers and all sport utility vehicles with a fuel efficiency rating
of 8.0 litres of gasoline or diesel fuel per 100 kilometers, and increases as
fuel efficiency of the vehicle declines. For new passenger vehicles only, a
retail sales tax rebate of $100 is granted for fuel efficiency ratings of less
than 6.0 litres of gasoline or diesel fuel per 100 kilometers.

Corporate Income Tax. The Province taxes corporate income allocated to
Ontario. Effective May 2, 2000, the general corporate income tax rate was
reduced from 15.5% to 14.5%, and was further cut to 14% on January 1, 2001.
Income from manufacturing and processing, mining, logging, fishing and farming
is subject to a lower tax rate. This tax rate was reduced from 13.5% to 12.5% on
May 2, 2000, and dropped to 12% on January 1, 2001. Corporate income tax rate
cuts originally scheduled for January 1, 2002 were accelerated by three months
to take effect on October 1, 2001. The general corporate income tax rate was
reduced to 12.5% and the tax rate on income from manufacturing and processing,
mining, logging, fishing and farming was reduced to 11%. The 2002 Ontario Budget
proposed that starting January 1, 2004, the general tax rate and the tax rate on
income from manufacturing and processing, mining, logging, fishing and farming
will be reduced annually by 1.5% and 1% respectively, until both rates reach 8%
in 2006.

Effective October 1, 2001 the corporate income tax rate for
Canadian-controlled private corporations was reduced from 6.5% to 6.0% on the
first $280,000 of active business income. This tax rate is being cut to 5.5% on
January 1, 2003, to 5% on January 1, 2004 and to 4% on January 1, 2005.
Concurrently, the income threshold for the small business rate (currently at
$280,000) is being increased by $40,000 each year, until it reaches $400,000 in
2005.

Ontario provides assistance for scientific research and experimental
development ("SR&ED") activities through: (1) a 10% refundable innovation tax
credit for qualified SR&ED expenses; (2) a full deduction for qualified expenses
in the year they are incurred; (3) a 20% refundable tax credit for SR&ED done
through specified research institutions; and (4) a tax exemption for the federal
SR&ED investment tax credit that relates to SR&ED incurred in Ontario.

Ontario provides a number of refundable tax credits on labour expenditures
for certain other corporate activities carried out in Ontario: a 10% to 15%
co-operative education tax credit for hiring students and leading edge
technology apprentices; a 30% book publishing tax credit; a 10% to 15% graduate
transition tax credit for hiring unemployed post-secondary graduates; a 20%
computer animation and special effects tax credit; a 20% tax credit for
producing Canadian film and television productions (30% for first-time
producers), with an additional 10% bonus for qualifying regional productions; an
11% film and television production services tax credit for non-Canadian
productions, with an additional 3% bonus for qualifying regional productions; a
20% interactive digital media tax credit; and a 20% sound recording tax credit.

Ontario also provides additional deductions from income equal to 30% of the
capital cost of pollution control equipment, childcare facilities and new school
buses purchased after May 4, 1999 and before May 5, 2002 (the 2002 Ontario
Budget proposed to extend the school bus incentive to December 31, 2005) and
100% of the costs of accommodating newly hired employees with disabilities. An
additional 15% deduction is provided for donations or price discounts to Ontario
post secondary educational institutions in respect of new teaching equipment and
learning technologies.

Corporations or a group of associated corporations with total assets over
$5 million or gross revenues over $10 million are subject to a minimum tax (the
"CMT"). The CMT is applied at a rate of 4% on accounting income less certain
deductions, such as dividend income. The CMT is reduced by regular corporate
income tax payable in the year.

Insurance Premiums Tax. Insurance companies pay a 2% tax on net premiums in
respect of accident, sickness and life insurance for persons resident in
Ontario. A 3% tax is levied on net premiums in respect of any other contract of
insurance in Ontario. Contracts in respect of property insurance also bear an
additional 0.5% tax on net premiums. A 2% premiums tax is also payable by
employers in respect of uninsured benefit arrangements.

Life insurance companies are subject to a special additional tax of 1.25%
on taxable paid-up capital in Ontario. The first $10 million in paid-up capital
is exempt from tax. This tax is reduced by regular income tax and any corporate
minimum tax payable in the year.

Capital Tax. The Province levies a capital tax on paid-up capital allocated
to Ontario. Insurance companies do not pay this tax. The general capital tax
rate is 0.3%. Deposit taking financial institutions are subject to a capital tax
of 0.6% on the first $400 million of taxable capital and 0.9% on taxable capital
in excess of $400 million. Non-deposit taking financial institutions are subject
to a capital tax of 0.6% on the first $400 million of taxable capital and 0.72%
on taxable capital in excess of $400 million. Ontario credit unions, Caisses
Populaires and family farm/fishing corporations are exempt from capital tax.

Prior to October 1, 2001, corporations or a group of associated
corporations whose aggregate taxable capital is less than $2 million were exempt
from capital tax. A reduced capital tax rate applied where taxable capital is
greater than $2 million and less than $3.2 million in 2001. Financial
institutions received a $2 million deduction from taxable capital. Effective
October 1, 2001, regular corporations and financial institutions are entitled to
a $5 million deduction from taxable capital.

A capital tax credit is available to financial institutions that make
eligible capital investments in or provide low interest rate loans to Ontario
small businesses.

Mining Tax. The Mining Tax Act levies a tax on profits from the extraction
of minerals in Ontario. The tax is levied on the operator's profit in excess of
$500,000. The 2000 Ontario Budget introduced a plan to lower the mining tax rate
from 20% to 10% by January 1, 2004. On January 1, 2002, the rate was cut from
16% to 14%, and will fall to 12% on January 1, 2003. There is a three-year or
$10 million profit exemption available to new or expanded mines. To assist mines
in remote areas of the Province, the three-year exemption is extended for up to
ten years for new remote mines. As well, the profits from remote mines are taxed
at a rate of 5% after the 10-year or $10 million profit exemption.

Employer Health Tax. Ontario levies an employer health tax on total Ontario
remuneration paid by employers. Employers with total Ontario remuneration of
$200,000 or less calculate tax payable at a rate of 0.98%; employers with total
Ontario remuneration between $200,000 and $400,000 calculate this tax at
graduated rates between 0.98% and 1.95%; and employers with total Ontario
remuneration in excess of $400,000 calculate tax at a rate of 1.95%. For the
1999 taxation year and subsequent years, the first $400,000 of total Ontario
remuneration paid by eligible businesses is exempt.

Land Transfer Tax. Ontario levies a land transfer tax on the value of
consideration of most registered conveyances and unregistered dispositions of
beneficial interest in land in Ontario. The land transfer tax applies at
graduated rates ranging from 0.5% for value of consideration of $55,000 or less,
1.0% on the value of consideration between $55,000 and $250,000 and 1.5% for
value of consideration exceeding $250,000. Where the value of consideration
exceeds $400,000 and the property contains one or two single-family residences,
there is an additional 0.5% (in addition to the 1.5%) tax levied on the amount
exceeding $400,000. As part of the 2000 Budget, the land transfer tax refund
program for first-time buyers of newly constructed homes was made permanent.
Eligible purchasers are entitled to a refund of up to $2,000 under the program.

Other Significant Taxes. Taxes are applied to the purchases of gasoline
(Gasoline Tax Act) and use of diesel fuel (Fuel Tax Act). The taxes apply to use
in on-road motor vehicles and certain off-road uses (i.e. recreational boats,
snowmobiles, lawn mowers). Under the Gasoline Tax Act, the tax rate for gasoline
is 14.7 cents per litre; for propane, 4.3 cents per litre; and for fuels used to
power aircraft, 2.7 cents per litre. Under the Fuel Tax Act, the tax rate for
diesel fuel is 14.3 cents per litre; and for diesel fuel used to power railroad
locomotives, 4.5 cents per litre.

Tobacco Tax. Ontario's tobacco tax rate is set by formula as 67% of the
average retail price of a pack of 25 cigarettes, net of all taxes, plus 100% of
any changes to federal tobacco excise duties or excise taxes for cigarettes. As
a result of this formula, any adjustment in federal tobacco tax rates is
automatically matched by an equal adjustment in the Ontario tobacco tax rate.
The current Ontario tobacco tax is 8.6 cents per cigarette and per gram or part
gram of cut tobacco. The tax on cigars is 56.6% of the retail price.

Race Tracks Tax. Ontario also levies a race tracks tax on wagers on horse
races at 0.5% on all bets.

Federal Government Payments

Approximately 12.4% of the Province's revenue in fiscal 2002-03, $8,245
million, will be received through cash payments from the Federal Government.
Federal payments are intended to assist the Province in providing necessary
services in areas of provincial jurisdiction.

Canada Health and Social Transfer ("CHST"). The largest cash transfers from
the Federal Government, in the form of CHST payments, are to assist the Province
in providing health care, post-secondary education and other social programs. In
fiscal year 2001-02, payments to Ontario under the CHST were $6,211million,
including $380 million from the CHST Supplement Trusts announced in the 1999 and
2000 federal budgets. In 2002-03, CHST payments to Ontario are expected to total
$6,808 million, including $191 million from the CHST Supplements.

The CHST is a block fund contribution by the Federal Government in respect
of social programs under the Federal-Provincial Fiscal Arrangements Act. It
replaced both the Established Programs Financing ("EPF") and Canada Assistance
Plan ("CAP"), beginning in 1996-97. To receive the CHST cash contribution,
provinces must comply with the Canada Health Act and may not impose a residency
requirement in determining eligibility for social assistance.

CHST total entitlements include both cash and tax entitlements. CHST tax
entitlements are the value of 13.5 of each province's personal income tax
("PIT") points and one corporate income tax ("CIT") point transferred to
provinces in 1977-78 under the EPF arrangements. Total entitlements were
initially based on each province's share of fiscal 1994-95 CAP and fiscal
1995-96 EPF entitlements. In subsequent years, the formula was adjusted to take
into account each province's share of the national population and in the 1999
Federal Budget, it was announced that total CHST entitlements would be allocated
among provinces on an equal per capita basis by 2001-02.

As of 1998-99, CHST cash entitlements, $12.5 billion nationwide, had been
reduced by $6.2 billion, or 33%, from combined CAP and EPF cash entitlements in
1994-95. The 1999 Federal Budget announced that by 2002-03, there would be a
nationwide restoration of $2.5 billion of the $6.2 billion cut previously by the
Federal Government from CHST cash entitlements. Restoration would begin with $1
billion in 2000-01, an additional $1 billion in 2001-02 and an additional $500
million in 2002-03, all allocated among provinces on an equal per capita basis.

CHST Supplements. The 1999 Federal Budget also established a one-time CHST
Supplement Trust for Health Care of $3.5 billion. It was allocated among
provinces on an equal per capita basis. Ontario's share, $1,323 million, was
withdrawn from the Trust and was spent by the Province on health care over three
years, 1999-00, 2000-01 and 2001-02.

The 2000 Federal Budget announced another CHST Supplement Trust of $2.5
billion, which also was allocated among provinces on an equal per capita basis.
Ontario's share, $952 million, was withdrawn from the Trust and is being spent
on health care between 2000-01 and 2003-04.

Only the portions of the Supplements that were expensed have been reported
as revenue in the 1999, 2000, 2001 and 2002 Ontario budgets, $755 million in
1999-00, $757 million in 2000-01, $380 million in 2001-02 and $191 million in
2002-03. The remainder of the amount announced in the 2000 Federal Budget is
being treated as deferred income and will be reported as revenue in 2003-04,
following the draw-down schedule set out in the federal budget. Drawing down the
CHST Supplements over three and four years has provided stable funding and
supported enhancements to base health care programs.

First Ministers' Meeting. At the September 2000 First Ministers' Meeting
("FMM") in Ottawa, the Prime Minister of Canada told Premiers and Territorial
Leaders that CHST cash will be increased to $18 billion in 2001-02 and to $18.7
billion in 2002-03 and subsequent years, up from the $15.5 billion received in
2000-01. The Prime Minister also made a commitment to increase CHST funding by
$600 million in 2003-04, $1.2 billion in 2004-05, and $1.8 billion in 2005-06.
As well, the Federal Government provided $300 million in 2001-02, $400 million
in 2002-03, and $500 million in each subsequent year for early childhood
development.

The additional funding for the CHST announced at the FMM will provide
Ontario with about $8.5 billion in additional funding over the following five
years, beginning with just over $1 billion in 2001-02 and increasing each year
to about $2.3 billion in 2005-06.

At the same meeting, the Prime Minister announced a $1 billion Medical
Equipment Trust Fund and the Federal Government transferred $380 million to
Ontario for spending by the Province on medical equipment during 2000-01 and
2001-02. The Federal Government also announced $500 million for Health
Information Technology and $800 million of financial support for a Health
Transition Fund for Primary Care.

Other Federal Payments. In 2001-02, the Province received $1,543 million
from the Federal Government for programs other than the CHST.

In 2002-03, Ontario expects to receive a total of $1,437 million through
other federal programs. This amount includes $530 million for social housing,
$225 million for infrastructure, $127 million for Indian welfare services and
$64 million for bilingualism development.

Fiscal Stabilization. An integral part of federal-provincial fiscal
relations is the Federal Government's obligation to protect provincial revenues.
The Federal Government makes cash payments, to any province if its revenue falls
short of the previous year's total by 5% or more due to a downturn in economic
activity. The most recent payment to Ontario under this program was received in
1995-96 in respect of claims made up to and including the 1992-93 fiscal year.

FEDERAL PAYMENTS TO ONTARIO

Outlook
2001-02 2002-03
(in millions)
Canada Health and Social Transfer (CHST).................. $ 6,211 $ 6,808
Social Housing............................................ 524 530
Student Assistance 31 64
Medical Equipment Trust................................... 190 --
Indian Welfare Services................................... 123 127
Young Offenders Act 118 61
Bilingualism Development.................................. 61 64
Employability Assistance for People With Disabilities..... 72 33
Infrastructure............................................ -- 225
Other..................................................... 424 333
Total Federal Payments.................................... $ 7,754 $ 8,245

Other Revenue

In 2002-03, approximately 15.0% of revenue is expected from sources other
than taxation or federal transfers. This category includes the net income of
provincially owned Liquor Control Board of Ontario and Ontario Lottery and
Gaming Corporation. Also included is revenue from Vehicle and Driver
Registration Fees and Sales and Rentals.

(4) Expenditure

Overview

The following table sets forth historical expenditure information for each
of the fiscal years from 1997-98 to 2000-01. The table has not been updated to
reflect the new ministry structure announced in April 2002.

ONTARIO'S OPERATING EXPENDITURE(1)

Restated Restated Restated
Ministry 1997-98 1998-99 1999-00 2000-01
(in millions)
Agriculture, Food and Rural Affairs...... $ 306 $ 309 $ 347 $ 401
One-time and Extraordinary............. -- -- -- 233
Farm Tax Rebate........................ 158 -- -- --
Attorney General......................... 683 753 846 957
Board of Internal Economy................ 113 117 154 116
Citizenship,............................. 73 82 95 77
Community and Social Services............ 8,067 7,659 7,512 7,620
Consumer and Business Services........... 92 136 134 155
Correctional Services.................... 531 540 563 593
Economic Development and Trade........... 138 87 92 81
Education................................ 4,715 7,719 7,704 7,961
Teachers' Pension Plan................. 1,443 67 (363) (402)
School Board Transition-- Restructuring/
Phase-in-Funding..................... 224 -- 268 --
Energy, Science and Technology........... 69 83 429 464
Environment.............................. 142 162 174 190
Executive Offices........................ 14 17 19 21
Finance-Own Account...................... 691 998 548 842
Public Debt Interest
Provincial............................. 8,729 9,016 8,977 8,896
Electricity Sector..................... -- -- 520 520
Community Reinvestment Fund............ 169 678 521 561
Provision for Electricity Sector....... -- -- 383 263
Health and Long-Term Care................ 18,283 18,867 20,373 21,686
Accelerated Health Care Commitment..... -- -- -- 498
Health Care Restructuring.............. 532 50 -- --
Major One-time Health Care Costs....... 113 639 286 487
Intergovernmental Affairs................ 5 4 4 4
Labour................................... 117 108 101 104
Management Board Secretariat............. 359 353 147 145
Retirement Benefits.................... (86) (219) (165) (33)
Contingency Fund.........................
OPS Employee Severance (Net)........... (159) -- 88 --
Special Circumstances Fund............. -- 180 -- --
Municipal Affairs and Housing............ 2,395 1,611 1,665 1,792
Municipal Capital and Operating
Restructuring Fund................... 23 -- -- --
Municipal Restructuring Fund........... 71 -- -- --
Native Affairs Secretariat............... 12 12 15 16
Natural Resources........................ 463 531 460 417
Northern Development & Mines............. 62 54 67 69
Office of Francophone Affairs............ 2 3 3 4
Solicitor General........................ 646 756 816 907
Tourism, Culture and Recreation.......... 205 286 367 360
Training, Colleges and Universities...... 3,052 3,281 3,285 3,219
Transportation........................... 702 607 587 593
Restructuring/Municipal Capital And
Operating Restructuring Fund......... 50 (17) -- --
TTC Five Year Capital Transfer And
Ottawa-
Carleton Regional Transit Commission 829 44 -- --
Transit Bus Subsidy Agreement........
Year-end Savings......................... -- -- -- --
Total Operating Expenditure.............. $ 54,033 $ 55,573 $ 57,022 $ 59,817

----------

Totals may not add due to rounding.

Source: Ontario Ministry of Finance.

(1) Expenditure excludes transactions relating to OEFC.

Starting with the 2002 Ontario Budget, published on June 17, 2002,
historical expenditure figures for the Province of Ontario were set forth as
restated figures starting from 1998-99 to 2000-01 to reflect the recently
announced new government structure. Accordingly, the 1998-99 to 2000-01 program
expenditure figures contained within the Financial Tables were restated to
reflect the new government ministry structures, and the following table sets
forth such restated figures. However, as a result of the restructuring, the
1997-98 historical expenditure figures were not restated and therefore are not
readily available.

ONTARIO'S OPERATING EXPENDITURE (1)
(in millions)
% of Total
Operating
Actual Actual Restated(3) Actual Outlook(2) Expenditure
Ministry 1998-99 1999-00 2000-01 2001-02 2002-03 2002-03
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------

Agriculture and Food* $ 309 $ 347 $ 401 $ 456 $ 645 1.0
One-Time and Extraordinary Costs - - 233 319 - -

Attorney General 753 846 957 983 973 1.5

Board of Internal Economy 117 154 116 124 117 0.2

Citizenship 82 95 77 71 70 0.1

Community, Family and Children's Services 7,659 7,512 7,620 7,742 7,814 12.3

Consumer and Business Services 136 134 155 172 171 0.3

Culture 192 214 236 279 277 0.4

Education 7,719 7,704 7,961 8,354 8,746 13.8
Phase-in Funding - 268 - - - -
Teachers' Pension Plan (TPP) 67 (363) (402) 42 149 0.3

Energy 22 329 344 367 140 0.2

Enterprise, Opportunity and Innovation 148 192 201 222 264 0.4

Environment 162 174 190 265 244 0.4

Executive Offices 17 19 21 19 21 -

Finance--Own Account* 998 548 842 902 802 1.3
Public Debt Interest
Provincial 9,016 8,977 8,896 8,509 8,505 13.4
Electricity Sector - 520 520 520 520 0.8
Community Reinvestment Fund 678 521 561 557 582 0.9
Provision for Electricity Sector - 383 263 - - -

Health and Long-Term Care 18,867 20,373 22,184 23,713 25,452 40.1
Health Care Restructuring 50 - - - - -
Major One-Time Health Care Costs 639 286 487 190 - -

Intergovernmental Affairs 4 4 4 4 4 -

Labour 108 101 104 110 114 0.2

Management Board Secretariat 353 147 145 263 230 0.4
Retirement Benefits (219) (165) (33) 63 (42) (0.1)
Contingency Fund - - - - 832 1.3
OPS Employee Severance (Net) - 88 - (17) - -
Special Circumstances Fund 180 - - - - -

Municipal Affairs and Housing* 1,611 1,665 1,792 1,135 701 1.1

Native Affairs Secretariat 12 15 16 13 15 -

Natural Resources 531 460 417 438 437 0.7

Northern Development and Mines 54 67 69 75 77 0.1

Office of Francophone Affairs 3 3 4 5 3 -

Public Safety and Security 1,296 1,379 1,500 1,601 1,532 2.4

Tourism and Recreation 94 153 124 144 131 0.2

Training, Colleges and Universities 3,281 3,285 3,219 3,248 3,521 5.6

Transportation 634 587 593 664 772 1.2
- - - - (300)
Year-End Savings (0.5)
---------------------------------------------------------------------------
---------------------------------------------------------------------------

Total Operating Expenditure $55,573 $57,022 $59,817 $61,552 $63,519 100
===========================================================================

* Preliminary allocations and historical restatements pending finalization of
new ministry structures. All other ministries reflect recently announced
government structure.

Totals may not add due to rounding.
Source: Ontario Ministry of Finance.

(1) Expenditure excludes transactions relating to OEFC.

(2) Outlook 2002-03 refers to the information contained in the 2002-03 Second
Quarter Ontario Finances, which updates the 2002 Budget.

(3) Fiscal 2000-01 has been restated to reflect the accounting changes. See "3.
Public Finance - (1) Financial Reporting - Accounting Changes".

Social Expenditure

Health and Long-Term Care. Health Care is the largest single component of
the provincial expenditure budget, accounting for an estimated 40.1% of total
operating expenditure in fiscal 2002-03. Approximately 62% of Ontario's health
care operating spending will be in the form of operating payments to public
hospitals ($9.4 billion in fiscal 2002-03) and Ontario Health Insurance Plan
payments to physicians and other health care practitioners and commercial labs
($6.5 billion in fiscal 2002-03).

Community Family and Children's Services. The Province provides a wide
range of social services, including social assistance, childcare, child welfare
services, housing assistance and drug benefits for social assistance recipients.
The Ministry of Community, Family and Children's Services operating expenditure
represents approximately 12.3% of fiscal 2002-03 total operating expenditure.
The social assistance program is the largest program, with a budget of $3,822
million in fiscal 2002-03.

Municipal Affairs and Housing. The Ministry of Municipal Affairs and
Housing is responsible for building a strong provincial-municipal relationship,
encouraging a viable and balanced housing market and promoting smart growth. The
Ministry's fiscal 2002-03 operating outlook of $701 million accounts for 1.1% of
Provincial operating expenditure.

Education and Training. The Ministries of Education and of Training,
Colleges and Universities operating budget, which includes provincial support
for primary and secondary schools, universities, colleges and training programs,
will total $12,416 million and accounts for approximately 19.3% of total
provincial operating expenditure in fiscal 2002-03. Transfer payments to school
boards, the largest component of education spending, will amount to $8,339
million in fiscal 2002-03. The operating grants for colleges and universities in
fiscal 2002-03 will total $2,645 million (includes general operating grants to
colleges and universities, grants under the Access to Opportunities Program and
Nursing Collaborative Programs).

Environment, Resources and Economic Development

The Ministry of Transportation has an operating budget of $772 million in
fiscal 2002-03. The Ministry is responsible for the overall safety, integrity
and performance of Ontario's transportation system, GO Transit and for the
licensing of drivers, vehicles and commercial carriers.

The operating budget of the Ministry of Agriculture and Food in fiscal
2002-03 is $645 million. The Ministry's role is to assist in enhancing a
supportive business environment in order to increase investment in Ontario's
agricultural and food sectors. Through a number of programs, the Ministry also
promotes value-added agriculture and increased exports of food products.

Through the Ministry of Enterprise, Opportunity and Innovation, the
Ministry of Tourism and Recreation and the Ministry of Culture, the Province
encourages entrepreneurship and promotes investment in scientific research,
innovation and technology development. The Ministries also promote Ontario's
trade, tourism and investment potential. Together the Ministries have an
operating budget of $672 million in fiscal 2002-03.

The Ministry of Natural Resources ensures the sustainable development of
the Province's vast resources and manages Crown lands and the provincial park
system. In addition, the Ministry is responsible for ensuring the protection of
these resources from natural disasters, such as forest fires. The Ministry's
operating budget in fiscal 2002-03 is $437 million.

The Ministries of Environment and of Energy protect the quality of the
natural environment and encourage conservation of material and water resources.
They also promote the development of a competitive energy sector, which is
economically and environmentally sustainable. The Ministries' operating budget
in fiscal 2002-03 totals $384 million, including $106 million related to the
consolidation of the Independent Electricity Market Operator.

ONTARIO'S CAPITAL EXPENDITURE(1)
(PSAB Basis)

Ministry 1997-98 1998-99 1999-00 2000-01
(in millions)
Agriculture, Food and Rural Affairs $ 1 $ 1 $ 1 $ 1
Attorney General................. 47 73 62 42
Community and Social Services.... 31 27 20 14
Correctional Services............ 5 30 124 95
Economic Development, and Trade.. -- -- -- --
Education........................ 267 229 52 4
Energy, Science and Technology... -- 273 656 86
Environment...................... 98 19 1 5
Water Protection Fund.......... -- 15 160 17
Finance.......................... 6 4 7 7
SuperBuild Millennium -- -- -- 4
Partnerships.....................
Contingency Fund...............
Health and Long-Term Care........ 106 187 338 182
Major One-Time Capital Costs... -- -- 1,004 140
Management Board Secretariat..... 80 39 13 24
Municipal Affairs and Housing.... 152 62 (10) --
Native Affairs Secretariat....... 14 13 7 5
Natural Resources................ 151 73 96 65
Northern Development and Mines... 173 205 267 356
Solicitor General................ 7 -- -- 4
Tourism, Culture and Recreation.. 3 2 231 32
Training, Colleges and Universities 117 71 1,028 204
Transportation................... 1,193 892 830 836
Year-End Savings................. -- -- -- --
Total Capital Expenditure........ $2,451 $2,215 $ 4,887 $2,123

----------

Source: Ontario Ministry of Finance

Totals may not add due to rounding.

(1) Expenditure excludes transactions relating to OEFC.

ONTARIO'S CAPITAL EXPENDITURE (1)
(in millions)

% of Total
Capital
Actual Actual Actual Actual Outlook (2) Expenditure
Ministry 1998-99 1999-00 2000-01 2001-02 2002-03 2002-03
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------

Agriculture and Food* $ 1 $ 1 $ 1 $ 29 $ 197 7.3

Attorney General 73 62 42 46 53 1.9

Community, Family and Children's
Services 27 20 14 31 32 1.2

Consumer and Business Services - - - - 1 -

Culture - 72 18 14 10 0.4

Education 229 52 4 17 10 0.4

Energy 156 86 50 69 2.5

Enterprise, Opportunity and Innovation 273 500 - 19 47 1.7

Environment 19 1 5 19 16 0.6
Water Protection Fund 15 160 17 1 3 0.1

Finance--Own Account* 4 7 7 11 24 0.9
SuperBuild Millennium - - 4 - 102 3.7
Partnerships
Contingency Fund - - - - 92 3.4

Health and Long-Term Care 187 338 182 205 342 12.6
Major One-Time Capital Costs - 1,004 140 - - -

Management Board Secretariat 39 13 24 28 46 1.7

Municipal Affairs and Housing* 62 (10) - 12 7 0.3

Native Affairs Secretariat 13 7 5 3 6 0.2

Natural Resources 73 96 65 70 80 2.9

Northern Development and Mines 205 267 356 371 393 14.5

Public Safety and Security 30 124 99 88 92 3.4

Tourism and Recreation 2 159 14 9 125 4.6

Training, Colleges and Universities 71 1,028 204 49 67 2.5

Transportation 892 830 836 818 1,001 36.9

Year-End Savings - - - - (100) (3.7)
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------

Total Gross Capital Expenditure** $2,215 $4,887 $2,123 $1,890 $2,715 100

Less: Net Investment in Capital
Assets*** - - - - 634 -
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------

Net Capital Expenditure $2,215 $4,887 $2,123 $1,890 $2,081 -
==================================================================================

* Preliminary allocations and historical restatements pending finalization of
new ministry structures. All other ministries reflect recently announced
government structure.

** Gross Capital Expenditure includes the following: i) acquisition or
construction of major tangible capital assets owned by the Province (land,
buildings and transportation infrastructure) and other tangible capital
assets; ii) repairs and maintenance; and iii) transfers for capital
purposes. Total gross capital expenditure includes $225 million in federal
flow-through funds. Gross capital investment excluding flow-though of
federal funds is $2.5 billion.

*** Starting in 2002-03, major tangible capital assets owned by the Province
(land, buildings and transportation infrastructure) are accounted for on a
full accrual accounting basis. Other tangible capital assets will continue
to be booked as expenditure in the year of acquisition.

Source: Ontario Ministry of Finance
Totals may not add due to rounding.

(1) Expenditure excludes transactions relating to OEFC.

(2) Outlook 2002-03 refers to the information contained in the 2002-03 Second
Quarter Ontario Finances which updates the 2002 Budget.

Through Ontario's SuperBuild initiative the government and its public and
private sector partners will be investing $20 billion over five years to renew
the Province's network of hospitals, high-technology links, highways, education
institutions and other infrastructure.

(5) Outline of Principal Provincial Institutions

The Province has established a number of Crown corporations, which are
primarily intended to provide goods and services needed to implement approved
government policy and programs or to provide a regulatory function for
operations authorized by government legislation. Among the more prominent
Ontario Crown corporations are the Ontario Financing Authority, the Liquor
License Board of Ontario, the Ontario Lottery Corporation, the Ontario Casino
Corporation, the Workplace Safety and Insurance Board (formerly, the Workers'
Compensation Board) and the Ontario Northland Transportation Corporation. Until
its restructuring in April 1999 and its continuation as Ontario Electricity
Financial Corporation (OEFC), Ontario Hydro had a mandate to generate and supply
power in Ontario. For a description of Ontario Hydro, its restructuring and the
operations of its successor companies, See "4. Public Debt-- (3) Financial
Assets and Liabilities-- (ii) Financial Assets-- Restructuring of Ontario
Electricity Industry", below.

(6) Sinking Funds

The Province of Ontario does not have a sinking funds system.

4. PUBLIC DEBT

(1) Provincial Purposes

The Province has met its financing requirements through a combination of
public borrowing, non-public borrowing and increases in cash and temporary
investments. There is no constitutional limit on borrowing.

Publicly Held Debt

The majority of Ontario's borrowing requirements are met through public
market borrowing. See "4. Public Debt-- (3) Financial Assets and Liabilities--
(iii) Liabilities-- Publicly Held Debt", below.

Non-Public Debt

The Public Service Pension Plan ("PSPP"), the Ontario Public Service
Employees Union ("OPSEU") Pension Plan and the Ontario Teachers' Pension Plan
("OTPP"). Prior to January 1, 1990, PSPP and OTPP were required to invest their
net cash flow in debt issued by the Province. Legislation now allows these Plans
to invest in public capital markets, and they are no longer a source of direct
financing for the Province. The OPSEU Pension Plan was created in June 1994
through legislation dividing the PSPP and creating a separate plan for OPSEU
members and for certain other unionized non-management employees. See "4. Public
Debt-- (3) Financial Assets and Liabilities-- (iii) Liabilities-- Non Public
Debt", below.

The Canada Pension Plan Investment Fund ("CPP"). The CPP obtains monies
from a compulsory national contributory pension plan in which all provinces
other than Quebec participate. Each month, the net cash flow is invested in
non-marketable securities issued by participating provinces, agents of the Crown
and the Government of Canada. The amount available to a province is based on the
proportion of total contributions coming from that province.

(2) Ontario Electricity Financial Corporation ("OEFC") Purposes

In addition to debt transactions for provincial purposes, the Province has
borrowed funds on behalf of OEFC in the public markets and from the CPP. The
proceeds of all such borrowings have been advanced to OEFC in exchange for bonds
with like terms and conditions. For a description of Ontario Hydro, its
restructuring and the operations of its successor companies, See "4. Public Debt
--(3) Financial Assets and Liabilities-- (ii) Financial Assets-- Restructuring
of Ontario Electricity Industry" below.

STATEMENT OF FINANCIAL TRANSACTIONS
(Ontario's financing for Provincial purposes and for OEFC purposes)

Restated(4) Outlook
1999-00 2000-01 2001-02 2002-03(1)
(in millions)
Financing-Provincial Purposes
Debt Issues.................................... $ 10,145 $ 10,002 $ 12,545 $ 13,447
Retirements:
Publicly Held Debt........................... 7,025 8,858 9,229 10,519
Canada Pension Plan.......................... 988 538 769 1,295
Ontario Teachers' Pension Fund............... 960 717 492 656
Public Service Pension Fund.................. 69 89 115 132
Ontario Public Service Employees' Union
(OPSEU) Pension Plan...................... 33 42 55 62
Municipal Employee Retirement Fund........... 44 52 68 235
Other........................................ 22 50 18 39
9,141 10,346 10,746 12,938
Net Debt Retirements/(Issues).................. (1,004) 344 (1,799) (509)
Decrease/(Increase) in Deposits with the
Province of Ontario Savings Office........... (295) 330 44 --
Other Items (2)................................ (2,135) 2,190 2,323 2,875
Acquisition/(Amortization) of Tangible Capital
Assets....................................... -- -- -- 634
Increase/(Decrease) in Cash and Temporary
Investments.................................. 4,102 (962) (193) (3,000)
Surplus/(Deficit).............................. $ 668 $ 1,902 $ 375 $ --
Financing-- OEFC Purposes
Debt Issues (3)................................ 5,399 2,924 2,342 2,106
Retirements.................................... $ -- $ 1,329 $ (569) $ (48)

----------

Source: Ontario Ministry of Finance.

(1) Outlook 2002-03 refers to the information contained in the 2002-03 Second
Quarter Ontario Finances, which updates the 2002 Budget.

(2) Accruals, Consolidations and net borrowing on behalf of agencies and
liability for retirement benefits are grouped under other items.

(3) Debt issues for 2001-02 totaling $2.3 billion borrowed by the Province and
on-lent to OEFC are largely to refinance maturing debt held by the Province
and guaranteed by the Province.

(4) Fiscal 2000-01 has been restated to reflect the accounting changes. See "3.
Public Finance - (1) Financial Reporting - Accounting Changes".

(3) Financial Assets and Liabilities

(i) General

Two features of Ontario's accounting and financing policies have a material
effect on the reporting of assets and liabilities: the treatment of physical
assets and the intermediary aspect of centralized financing.

Investments in physical assets made directly by the Province are treated as
an expense in the year of acquisition and therefore do not appear as assets on
the Province's financial statements. Starting in 2002-03, major tangible capital
assets owned by the Province (land, buildings and transportation infrastructure)
will be accounted for on a full accrual accounting basis. Other tangible capital
assets owned by the Province will be reported in subsequent years.

The intermediary activity of borrowing on behalf of provincially-created
bodies creates assets and liabilities. These would not appear if the bodies were
funded independently or through a provincial guarantee. This borrowing action
increases the Province's debt. The related asset arises because the government
is funding, through loans and investments, expenses that are administered
outside a government ministry.

Activities so funded are expected to generate sufficient return to repay
the principal and interest. However, the recipients of the advances and
investments are not always required to produce a profit, and some are not
self-sustaining.

Financial assets include cash and claims by the Province arising from
events and transactions occurring prior to the year-end.

(ii) Financial Assets

SUMMARY OF FINANCIAL ASSETS (1)

As at March 31, % Of
2002(2) Total
(in millions) (%)
Cash and Temporary Investments........... $ 5,727 26.59
Accounts Receivable...................... 2,369 11.00
Loans Receivable and Other Assets........ 1,616 7.50
Properties Held for Sale................. 97 0.45
Investment in Government Enterprises..... 11,731 54.46
$ 21,540 100.00

----------

Source: Ontario Ministry of Finance.

(1) Physical assets purchased by the Province are expensed in the year of
acquisition and are excluded from the above table.

(2) Prepared on the basis of modified accrual and consolidation accounting. See
"3. Public Finance-- (1) Financial Reporting-- Overview", above.

Cash and Temporary Investments

Temporary investments are recorded at the lower of cost or fair value and
are mainly marketable, short-term securities issued or guaranteed by Canadian
chartered banks and the provincial and federal governments.

Between April 1, 2001 and March 31, 2002, the month-end level of cash and
temporary investments varied from a low of approximately $3,746 million to a
high of approximately $6,631 million. The cash and temporary investments are
used to accommodate differences in revenue and expense flows during each fiscal
year and to provide flexibility for debt management.

Accounts Receivable

Accounts receivable comprise taxes receivable, receivables from the
Government of Canada and other receivables less a provision for doubtful
accounts.

Loans Receivable and Other Assets

Loans receivable with significant concessionary terms are recorded at the
date of issuance at face value discounted by the amount of the grant portion.
The grant portion is recognized as an expenditure at the date of issuance of the
loan. The amount of the loan discount is amortized to revenue over the term of
the loan. Loans receivable include amounts owing from government business
enterprises.

The activities of government business enterprises are recorded in these
financial statements under the modified equity method. This method does not
require the elimination of inter-organizational balances. Properties Held for
Sale

Properties held for sale are stated at the lower of cost and net realizable
value. Cost includes acquisition costs, property taxes, development costs,
capitalized interest and administrative costs, less net interim property rents
and expenditure.

Investment in Government Business Enterprises

Investment in Government Business Enterprises represents the net assets of
government business enterprises recorded on the modified equity basis as
described under Principles of Consolidation.

Government business enterprises are defined as those Crown corporations,
boards and commissions which have the financial and operating authority to carry
on a business, have as their principal activity and source of revenue the
selling of goods and services to individual and non-government organizations and
are able to maintain their operations and meet their obligations from revenues
generated outside the government reporting entity.

Restructuring of Ontario Electricity Industry

Legislation

The Energy Competition Act, 1998 received Royal Assent on October 30, 1998,
and through its five schedules, primarily the Electricity Act, 1998 and the
Ontario Energy Board Act, 1998 ("OEB Act"), establishes the broad legislative
framework for Ontario's new competitive electricity market.

The Electricity Act, 1998 implements the fundamental principles of the
restructuring of Ontario's electricity industry. This includes the separation of
the competitive components of the industry (generation and retail) from the
monopolistic components of the industry (transmission and distribution), the
establishment of an independent electricity market operator and the
implementation of open non-discriminatory access to transmission and
distribution systems.

The Electricity Act, 1998 mandates non-discriminatory access to
transmission and distribution facilities by providing that commencing May 1,
2002, every transmitter or distributor must provide generators, retailers and
consumers with non-discriminatory access to its transmission or distribution
systems in Ontario in accordance with its licence. All customers have access to
the electricity supplier of their choice. Ontario's electricity generators
compete with generators and suppliers, both from within and outside Ontario, to
sell electricity in the Ontario wholesale market.

The Electricity Act, 1998 also required every municipal corporation that
generates, transmits, distributes or retails electricity, directly or
indirectly, to incorporate a corporation under the Business Corporations Act
(Ontario) ("OBCA") for the purpose of carrying on those activities, and
prohibits those municipal corporations from carrying on those activities except
through such corporation. Provision was also made for the municipal corporation
to transfer employees, assets, liabilities, rights and obligations of the
municipal corporation or its electricity commission to the new corporation.

The OEB Act expands the jurisdiction and mandate of the OEB in the
regulation of the electricity and natural gas markets. In its new role as
regulator of the Ontario electricity market, the OEB has broad powers relating
to licensing, rate regulation and market supervision.

The Electricity Act, 1998 and OEB Act have been amended by the Reliable
Energy and Consumer Protection Act, 2002, which received Royal Assent on June
27, 2002. This Act clarifies the Province's ability to dispose of its interest
in Hydro One Inc. through a variety of disposition options. This Act also
provides for ownership of the transmission corridor lands to be transferred from
Hydro One Inc. to the Province on a day to be proclaimed in exchange for a
statutory right to use the land for transmission and distribution purposes. It
also creates the Energy Consumers' Bill of Rights which enhances consumer
protection provisions in the OEB Act.

On June 27, 2002, the Hydro One Inc. Directors and Officers Act, 2002
received Royal Assent. This Act enabled the government to appoint a new board
for Hydro One and directs the new board to negotiate reduced executive
compensation packages. An interim board was appointed effective as of June 4,
2002 and the board composition was confirmed at the annual meeting of the
shareholders on August 15, 2002.

In November 2002, the Province announced a number of measures to protect
consumers from volatile electricity prices, to encourage new supply and to
promote conservation. On December 9, 2002, the Electricity Pricing, Conservation
and Supply Act, 2002 received Royal Assent. Pursuant to the Act, the following
measures will be in effect until April 30, 2006.

• Effective December 1, 2002, the commodity price payable by low volume
and designated consumers is fixed at 4.3 cents per kilowatt hour or
such lower rate as may be prescribed by regulation;

• Low volume and designated consumers will receive a reimbursement of
part of the commodity price they paid in order to effectively fix the
commodity price they paid for electricity between May 1, 2002 and
December 1, 2002 at 4.3 cents per kilowatt hour; and

• Electricity transmission and distribution rate orders in effect on
November 11, 2002 will continue unless such orders are replaced or
amended with the approval of the Minister of Energy.

Pursuant to this Act, regulations may be made to make financial
arrangements for the following purposes:

• To compensate distributors, retailers and the Independent Electricity
Market Operator ("IMO") for payments made under the Act to reimburse
consumers;

• To offset differences between the commodity price for electricity in
certain contracts between retailers and consumers and the commodity
price for electricity in the IMO-administered markets;

• To offset differences between the commodity price for electricity
supplied by generators and the commodity price for electricity payable
by consumers as a result of the fixing of the price under the Act; and

• To make payments to the IMO in respect of certain liabilities or
expenses it incurs as a result of carrying out its objects under the
Electricity Act, 1998.

The November 2002 announcements included several temporary tax measures to
stimulate new generating capacity to ensure that the Province has sufficient
electricity to meet its future needs and to promote the conservation of
electricity. These measures, which are implemented by the Electricity Pricing,
Conservation and Supply Act, 2002, or will be implemented by regulation, are:

• A 10-year corporate income tax ("CIT") holiday for income from the
sale of a new supply of electricity from clean, alternative, or
renewable sources;

• An immediate 100 per cent CIT write-off and capital tax exemption for
the cost of assets acquired after November 25, 2002 and before January
1, 2008, used to generate electricity from clean , alternative, or
renewable sources;

• An immediate 100 per cent CIT write-off for qualifying electrical
energy efficient equipment acquired after November 25, 2002 and before
January 1, 2008;

• A 10-year property tax holiday for new facilities that generate
electricity from clean, alternative or renewable sources;

• A retail sales tax rebate for businesses for building materials
purchased and incorporated into alternative or renewable energy after
November 25, 2002 and before January 1, 2008;

• A one year retail sales tax rebate for purchases, rentals and leases
of certain new energy-efficient household appliances after November
25, 2002 and before November 26, 2003; and

• A retail sales tax rebate for solar energy systems purchased for
residential premises after November 25, 2002 and before November 26,
2007.

The government also announced on December 2, 2002 a review of all items on
consumers' electricity bills. The review will include how charges are calculated
and determine if items on the bill are fair and clear.

Successor Companies and Transfer of Assets and Liabilities

The Electricity Act, 1998 provided for the restructuring of Ontario Hydro
into several separate successor companies:

• Ontario Power Generation Inc. ("OPG"), a commercial corporation
incorporated under the OBCA which owns and operates the generation
business of the former Ontario Hydro;

• Hydro One Inc. ("Hydro One"), a commercial corporation incorporated
under the OBCA which owns and operates the transmission and
distribution and related energy services businesses of the former
Ontario Hydro;

• Independent Electricity Market Operator ("IMO"), the independent
electricity system coordinator responsible for directing the operation
of the IMO-controlled electrical power grid in Ontario and enforcing
the market rules for IMO-administered electricity markets;

• Electrical Safety Authority ("ESA"), a non-profit corporation without
share capital, which carries out the electrical installation
inspection and approval functions, previously conducted by Ontario
Hydro; and

• Ontario Electricity Financial Corporation ("OEFC"), which is the
continuation of Ontario Hydro, a corporation without share capital,
responsible for managing Ontario Hydro's outstanding debt and the
other assets, liabilities, rights and obligations not transferred to
the new companies.

OPG and Hydro One have clear business mandates and are operated like
private-sector companies, paying the equivalent of corporate income, capital and
property taxes to OEFC and a commercial rate of return to their shareholder, the
Province. Of the successor companies to Ontario Hydro, only OEFC is an agent of
the Province.

On April 1, 1999, the Province proclaimed in force the relevant sections of
the Electricity Act, 1998, continuing Ontario Hydro as OEFC and repealed most of
the Power Corporation Act. By transfer orders effective April 1, 1999, made
under the Electricity Act, 1998, the assets, liabilities, rights, obligations
and employees related to the generation business of Ontario Hydro were
transferred to OPG and its subsidiaries; the assets, liabilities, rights,
obligations and employees related to the transmission, distribution and energy
services businesses were transferred to Hydro One and its subsidiaries; the
assets, liabilities, rights, obligations and employees related to the function
of running the electricity markets and the dispatch of electricity were
transferred to IMO; and the assets, liabilities, rights, obligations and
employees related to Ontario Hydro's electrical inspection function were
transferred to ESA. The assets were transferred to OPG, Hydro One and IMO in
exchange for debt, which committed OPG, Hydro One and IMO to pay OEFC principal
and interest. The Province assumed a portion of OPG's and Hydro One's debt in
exchange for equity, in order to provide them with commercially acceptable
capital structures.

The transfer orders also included schedules of assets, liabilities, rights
and obligations that were retained by OEFC. Certain intellectual property assets
and certain assets located on and rights relating to First Nations Reserves are
being held by OEFC in trust or otherwise for the benefit of the new successor
companies, including OPG and Hydro One. OEFC and the new successor companies
have entered into indemnification and management agreements relating to these
assets and other transferred assets and liabilities.

On April 1, 1999, OEFC had total debt of $30.486 billion, comprised of
$27.735 billion in long-term debt and $2.751 billion in short-term debt. The
debt continues to be guaranteed by the Province. At April 1, 1999, OEFC held
notes receivable in the amount of $8.3 billion from OPG, Hydro One and IMO and
$8.9 billion from the Province as part of a debt for equity swap outlined below.

Subject to deductibles of $20 million and $10 million respectively, OEFC
has agreed to indemnify OPG and Hydro One in respect of: (i) the failure of the
transfer orders to transfer any asset, right or thing, or any interest therein
related to their business; (ii) any adverse claims or interests, including those
of the Crown, subject to certain exclusions, or any deficiency or lack of title
in respect of any asset, right or thing or any interest therein, which was
intended to be transferred; and (iii) the creation, treatment, payment to or
from or other dealing with any equity account of Ontario Hydro, including with
respect to certain litigation relating thereto. The Province has guaranteed the
obligations of OEFC under the indemnity.

The value of the assets transferred to Hydro One and its subsidiaries was
determined to be $8.6 billion as of April 1, 1999. In consideration for the
assets, Hydro One issued notes to OEFC in the aggregate principal amount of
$4.85 billion together with an additional promissory note in the principal
amount of $3.76 billion. In consideration for the issuance to the Province of
12,920,000 preferred shares and 99,990 common shares, the Province assumed all
of Hydro One's obligations under the $3.76 billion promissory note and OEFC
released Hydro One from its obligations with respect to this promissory note.

The value of the assets transferred to OPG and its subsidiaries was
determined to be $8.5 billion as of April 1, 1999. In consideration for the
assets, OPG issued notes to OEFC in the aggregate principal amount of $3.4
billion together with an additional promissory note in the principal amount of
$5.1 billion. In consideration for the issuance to the Province of 256,300,000
common shares, the Province assumed all of OPG's obligations under the $5.1
billion promissory note and OEFC released OPG from its obligations with respect
to this promissory note.

Finally, in consideration for assets transferred to IMO, IMO issued notes
to OEFC in the aggregate principal amount of $78.2 million.

The Province receives dividend payments on the equity held by it in OPG and
Hydro One. Pursuant to the government's commitment to keep electricity income in
the electricity sector, income earned in Hydro One and OPG over the Province's
cost of its investment in its electricity subsidiaries is allocated to OEFC for
purposes of debt retirement (See page 41-- Summary of Liabilities).

Following public consultations, the Province announced in June 2002 that
the government would maintain control of Hydro One by retaining at least 51 per
cent of the utility's shares. On July 5, 2002, Finance Minister Janet Ecker
announced the start of a process to seek a strategic partner for up to 49 per
cent of Hydro One. The Province's objectives with respect to Hydro One are:

• To protect consumers;

• To bring private sector discipline to the day-to-day operations of
Hydro One;

• To ensure that the necessary capital is available to rebuild and
modernize Hydro One's transmission and distribution infrastructure;
and

• To use the proceeds to pay down the $38 billion debt and other
liabilities from the former Ontario Hydro.

On April 1, 1999, OEFC began receiving payments in lieu of corporate and
additional property taxes from OPG and Hydro One and their subsidiaries and
payments in lieu of additional property taxes from municipally-owned local
distribution companies ("MEUs"), under the Electricity Act, 1998. MEU liability
to make payments in lieu of corporate taxes began October 1, 2001. These
payments in lieu effectively level the corporate tax and property tax playing
field with private entities. In 2001, the payments in lieu of property taxes by
OPG and MEUs on hydro-electric generating stations (power dams) were converted
to charges on gross production revenue to be consistent with the revised means
of imposing charges on private power dams. The payments in lieu of additional
property taxes payable by OPG and MEUs in respect of nuclear and fossil
generating stations are not affected by this change. (See explanation of
stranded debt below.)

Municipalities and MEUs are subject to a transfer tax on the transfer of
MEU property. The Electricity Act, 1998 clarified municipal ownership of MEUs.
As a result, MEUs can be sold and a gain realized. Some of that gain will be
captured by the MEU transfer tax, which is payable to OEFC. A two-year exemption
period, which ended November 7, 2000, from the payment of transfer tax was
provided for transfers of property by municipalities or MEUs to other MEUs, OPG,
Hydro One or a subsidiary of either OPG or Hydro One. Pursuant to the
Electricity Pricing, Conservation and Supply Act, 2002, each MEU and any other
corporation in which a municipality beneficially owns, directly or indirectly, a
majority of the voting securities and that has been incorporated under the OBCA
for the purpose of generating, transmitting, distributing or retailing
electricity as provided in s. 142(1) of the Electricity Act, 1998 is deemed to
have made an application to the Ontario Energy Board for a rate order that
incorporates a nil rate of return on common equity unless a resolution is passed
by the owning municipality within 90 days of the date the Act receives Royal
Assent affirming that the corporation should continue to be incorporated under
the OBCA as provided in s. 142(1) of the Electricity Act, 1998. If the
resolution is not passed, the corporation would also be prevented from declaring
dividends or disposing of all or substantially all of its assets. A method is
established pursuant to the Act by which non-municipal shareholders of such a
corporation can be compensated for their equity investments.

On April 1, 1999, Ontario Hydro's pension assets and liabilities remained
with OEFC, as administrator of the OEFC pension plan, to be managed on behalf of
OEFC by the Ontario Electricity Pension Services Corporation ("OEPSC"), a
subsidiary of OEFC, until distribution to successor plans of OPG, Hydro One, IMO
and ESA in accordance with the Electricity Act, 1998. On March 29, 2001, OEFC
and OEPSC entered into an agreement with OPG, Hydro One, IMO and ESA for the
division and transfer of the assets and liabilities of the OEFC Pension Plan as
required by the Electricity Act, 1998. The Superintendent of Financial Services
consented to the transfer of assets on June 6, 2001 and as of that date, the
successor companies' pension plans assumed responsibility for the accrued
pension benefits under the OEFC Pension Plan. Almost all of the assets of the
OEFC Pension Plan were transferred to the successor plans on or about June 29,
2001 pursuant to the transfer agreement with a few minor illiquid assets to
follow thereafter. In addition, certain assets, liabilities, employees,
officers, rights and obligations of OEFC and OEPSC related to the OEFC Pension
Plan were transferred to the successor companies by transfer orders effective as
of June 29, 2001 and made under section 138 of the Electricity Act, 1998. It is
currently expected that OEPSC will be wound up shortly and any remaining assets
and liabilities transferred to the other successor companies. The long-term
contracts with non-utility generators ("NUGs") remain with OEFC. About 7% of
generated electricity in Ontario is supplied by NUGs.

Nuclear Costs

On April 1, 1999, the obligation to fund the future costs of nuclear waste
management and decommissioning was transferred to OPG by transfer order as part
of the assets and liabilities associated with Ontario Hydro's nuclear generation
business. In its annual information form, dated April 30, 2002, OPG estimates
the total present value of its future nuclear waste management and
decommissioning liabilities to be approximately $7,728 million as at December
31, 2001.

On June 13, 2002, Bill C-27, the Nuclear Fuel Waste Act (Canada), received
Royal Assent and was proclaimed into force on November 15, 2002. This Act
requires major owners of nuclear fuel waste, including OPG, to establish a waste
management organization to carry out the managerial, financial and operational
activities to implement the long-term management of nuclear fuel waste and to
establish trust funds and make annual payments to finance the long-term
management of nuclear fuel waste. It also authorizes the Governor in Council to
make a decision on the choice of approach for longer-term management of nuclear
fuel waste for Canada. The waste management organization has been established
and OPG has established and deposited $500 million into the trust fund to meet
the requirements of this Act.

OPG and the Province have entered into an agreement to establish, fund and
manage segregated funds to ensure that sufficient funds are available to pay for
costs of managing and disposing of nuclear waste and decommissioning nuclear
generating stations. The agreement will come into effect once related funds
management and custodial agreements have been executed. Under the agreement, OPG
is required to establish a used fuel fund and a decommissioning fund which are
to be held by a financial institution, segregated from OPG, and used only to pay
for the costs of nuclear decommissioning and nuclear waste management and
disposal. OPG is required to make an initial payment and quarterly payments to
the funds that, together with income earned and a contribution to be made by
OEFC, would cover all currently estimated costs. The Province will limit OPG's
financial exposure with respect to increases in certain used fuel management
costs in the event that the present value of those costs exceeds current
estimates. The Province is also obligated under the agreement to make additional
contributions to the used fuel fund if that fund earns less than a specified
rate of return over the Ontario consumer price index. The Province is entitled
to any surplus in the used fuel fund including earnings in excess of the
specified return.

In addition, under the agreement, the Province has agreed to provide the
financial guarantee that may be required by the Canadian Nuclear Safety
Commission ("CNSC") as a condition of OPG's licence pursuant to the Nuclear
Safety and Control Act (Canada). Execution of the agreement, including the
related guarantee, has been authorized by Order in Council. The terms of the
financial guarantee are currently being discussed with the CNSC.

Stranded Debt

The Electricity Act, 1998 defines "stranded debt" as the amount of OEFC's
debt and other liabilities that, in the opinion of the Minister of Finance,
cannot reasonably be serviced and retired by commercial companies in a
competitive electricity market. On April 1, 1999 the Ministry of Finance
estimated the stranded debt at approximately $20.9 billion. The Electricity Act,
1998 provides for certain dedicated revenue streams, to be paid over time to
OEFC, to go towards servicing and retiring its stranded debt. These dedicated
revenue streams include payments to OEFC by OPG, Hydro One, their subsidiaries
and MEUs in lieu of: certain federal and provincial income taxes and capital
taxes; additional property taxes; and the amounts payable by MEUs and municipal
corporations to OEFC on the transfer of their electricity business. The
government has a long-term plan in place to defease OEFC's debt and other
liabilities from within the electricity sector. The plan provides for sufficient
revenues from the electricity sector to defease OEFC's debt and other
liabilities within a reasonable timeframe. In addition to the above dedicated
revenue streams and pursuant to the Government's commitment to keep electricity
income in the electricity sector, the net income of OPG and Hydro One, in excess
of the Province's interest expenditure on its investment in OPG and Hydro One,
is dedicated to the retirement of OEFC's debt.

Residual stranded debt is the portion of OEFC's stranded debt that cannot
be serviced by the foregoing dedicated revenue streams. The residual stranded
debt was estimated at $7.8 billion on April 1, 1999. The Electricity Act, 1998
provides for a debt retirement charge of 0.7 cents per kilowatt hour to be
levied on electricity users in the Province commencing May 1, 2002. This charge,
collected by the IMO, distributors and retailers, is payable to OEFC until
residual stranded debt is retired.

(iii) Liabilities

Overview

Liabilities include debt issued for provincial purposes, debt issued for
investment in electricity sector, accounts payable and accrued liabilities,
deposits with the Province of Ontario Savings Office, pension liabilities for
the Public Service Pension Plan, the Ontario Public Service Employees' Union
("OPSEU") Pension Plan, the Ontario Teachers' Pension Plan and other
liabilities.

SUMMARY OF LIABILITIES

As at March 31,
2002(1) % of Total
(in millions)
Liabilities for Provincial Purposes:
Publicly Held Debt (2)............................................ $ 79,876 59.8%
Non-Public Debt
Canada Pension Plan............................................. 10,063 7.5
Ontario Teachers' Pension Fund.................................. 11,043 8.3
Public Service Pension Fund..................................... 3,331 2.5
Ontario Public Service Employees' Union (OPSEU) Pension
Fund......................................................... 1,582 1.2
Ontario Municipal Employees Retirement Fund..................... 502 0.4
Other........................................................... 1,195 0.9
27,716 20.7
Total Debt Issued for Provincial Purposes......................... 107,592 80.5
Debt Issued for Investment in Electricity Sector (3).............. 8,885 6.7
Accounts Payable and Accrued Liabilities.......................... 10,640 8.0
Deposits with the Province of Ontario Savings Office.............. 2,438 1.8
Pensions.......................................................... 1,785 1.3
Other Liabilities................................................. 1,712 1.3
Provision for Electricity Sector (3).............................. 524 0.4
Total Liabilities for Provincial Purposes......................... $ 133,576 100.0%
Liabilities for Ontario Electricity Financial Corporation
(OEFC)
Debt Issued by the Province for OEFC (4)
Public Investors................................................ $ 11,088 85.9%
Canada Pension Plan............................................. 1,881 14.2
Total debt issued for OEFC (5).................................... 12,969 100.0%
Debt guaranteed by the Province for OEFC.......................... $ 16,147 85.3%
Other guaranteed obligations...................................... 2,788 14.7%
Total guaranteed obligations (6).................................. $ 18,935 100.00%

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Source: Ontario Ministry of Finance.

(1) Prepared on the basis of modified accrual and consolidation accounting. See
"3. Public Finance-- (1) Financial Reporting-- Overview", above.

(2) All balances are expressed in Canadian dollars. The balances above reflect
the effect of related derivatives contracts entered into by the Province.
See "4. Public Debt-- (6) Financial Tables-- I. Summary of Net Provincial
Debt and II. Summary of Ontario Electricity Financial Corporation ("OEFC")
Purpose debt-- Risk Management and Derivative Financial Instruments".

(3) On April 1, 1999, as a result of the restructuring of Ontario Hydro, the
Province assumed $8,885 million in debt from OPG ($5,126 million) and Hydro
One ($3,759 million). In exchange, the Province received shares in the two
corporations. Pursuant to the government's commitment to keep electricity
income in the electricity sector, net income of OPG and Hydro One in excess
of the Province's interest expenditure on its investment in the electricity
sector, must be set-aside for retirement of OEFC's liabilities. In 2001-02
net income (loss) of OPG and Hydro One amounted to ($167) million and $346
million, respectively. The Province's interest on debt issued for its
investment in the electricity sector amounted to $520 million in the same
period. This resulted in a nil provision this year.

(4) Proceeds of this debt have been advanced to OEFC in exchange for bonds with
like terms and conditions.

(5) In addition, the Province has advanced to OEFC an overnight loan of $248
million.

(6) In addition, Ontario Housing Corporation ("OHC") has entered into loan
insurance agreements with Canada Mortgage and Housing Corporation ("CMHC")
pertaining to mortgage loans on projects funded under various non-profit
housing programs administered by the Ministry of Municipal Affairs and
Housing. Under these agreements, CMHC will insure mortgage loans made by
lenders approved under the National Housing Act for the purpose of
purchasing, improving, constructing or altering housing units. While
insurance is provided by CMHC, the OHC is liable to CMHC for any net costs,
including any environmental liabilities, incurred as a result of loan
defaults on projects funded entirely by the Province, and must share any
net costs incurred for loan defaults on projects funded jointly by CMHC and
the Province. Any costs incurred by the OHC will be reimbursed by the
Ministry of Municipal Affairs and Housing.

In the event of a loan default, OHC can either remedy the default or
acquire the units and assume the loan obligation. The OHC share of defaults
on solely provincial funded projects would be 100% of net amounts incurred
on loans defaulted and approximately 70% of net amounts incurred on
defaults on joint federal-provincial projects. As of March 31, 2002, there
were $9.5 billion (2001 -- $10.4 billion) of mortgage loans outstanding. As
operating subsidies provided are sufficient to ensure that all mortgage
payments can be made when due, default is unlikely. To date, there have
been no claims for defaults on insured mortgage loans.

Publicly Held Debt

Publicly held debt is debt issued to the general public. As at March 31,
2002, the publicly held debt issued for provincial purposes was $79,876 million,
$53,952 million of which was issued in Canadian dollars, $17,448 million in U.S.
dollars, $3,286 million in Japanese Yen, $3,311 million in Euros and $1,879
million in other currencies. As of the same date, all publicly held debt issued
for Ontario Electricity Financial Corporation purposes was $11,088 million.

As at March 31, 2002, the total amounts outstanding under the Province's
Treasury bill program was $2,118 million and $809 million was outstanding under
the U.S. commercial paper program.

From April 1, 2002 through December 6, 2002, the Province announced public
offerings of bonds and notes totaling approximately $11.1 billion of which $10.7
billion were for provincial purposes and $0.4 billion was debt incurred for the
OEFC. The tables below provide a summary of the publicly held debt issued by the
Province from April 1, 2002 through December 6, 2002 for provincial purposes and
the OEFC.

DEBT ISSUED BY THE PROVINCE FOR PROVINCIAL PURPOSES

Principal
Date of Issue Date of Maturity Interest Rate % Funds (in millions) References
03-Apr-2002 03-Apr-2009 Step-Up Canadian $ 45 (1)(5)
18-Apr-2002 13-Jul-2040 6.20 Canadian $ 50 (1)
18-Apr-2002 24-Jul-2006 7.75 Canadian $ 100 (1)(6)
23-Apr-2002 30-Nov-2011 5.25 Canadian $ 50 (2)(7)
30-Apr-2002 08-Mar-2007 5.2 Canadian $ 500 (1)(8)
02-May-2002 31-Dec-2007 5.125 Canadian $ 100 (2)(9)
03-May-2002 03-May-2007 Step-Up Canadian $ 30 (3)(10)
06-May-2002 06-May-2009 Step-Up Canadian $ 36 (3)(11)
08-May-2002 07-Jul-2012 Zero Coupon Canadian $ 38 (12)
08-May-2002 31-Dec-2041 6.2 Canadian $ 50 (1)(13)
15-May-2002 15-Nov-2007 Step-Up Canadian $ 25 (1)(14)
27-May-2002 02-Jun-2031 6.2 Canadian $ 500 (1)(23)
29-May-2002 02-Dec-2041 6.2 Canadian $ 40 (1)(15)
07-Jun-2002 02-Dec-2011 6.1 Canadian $ 500 (1)(16)
11-Jun-2002 02-Dec-2004 6.4 Canadian $ 33 (1)(24)
21-Jun-2002 Variable Variable Canadian $ 2601 (22)
04-Jul-2002 02-Jul-2004 Floating Canadian $ 50 (4)
15-Jul-2002 15-Jul-2007 Step-Up Canadian $ 50 (1)(17)
23-Jul-2002 23-Jul-2009 Step-Up Canadian $ 25 (1)(18)
25-Jul-2002 2-Jun-2042 6.0 Canadian $ 50 (1)(19)
17-Jul-2002 17-Jul-2012 5.125 US $ 750 (1)(33)
06-Aug-2002 02-Jun-27 7.6 Canadian $ 28 (1)(20)
06-Aug-2002 02-Dec-04 6.4 Canadian $ 61 (1)(21)
19-Aug-2002 02-Jun-2031 6.2 Canadian $ 500 (1)(25)
04-Sep-2002 02-Dec-2012 5.375 Canadian $ 500 (1)
10-Sep-2002 10-Sep-2009 Step-Up Canadian $ 35 (1)(26)
10-Sep-2002 10-Sep-2007 4.375 Canadian $ 500 (2)(27)
17-Sep-2002 17-Sep-2007 3.5 US $ 500 (1)(28)
25-Sep-2002 02-Jun-2042 6.0 Canadian $ 15 (1)(29)
01-Oct-2002 15-Dec-2009 3.75 US $ 300 (1)(30)
15-Oct-2002 15-Oct-2012 Step-Up Canadian $ 30 (1)(31)
28-Oct-2002 17-Sep-2007 3.5 US $ 250 (1)(32)
4-Nov-2002 04-Nov-2004 Step-Up Canadian $ 25 (1)
26-Nov-2002 15-Dec-2005 2.625 US $ 482 (1)(34)
27-Nov-2002 27-Nov-2004 Step-Up Canadian $ 25 (1)
27-Nov-2002 10-Sep-2007 4.375 Canadian $ 75 (1)(35)
02-Dec-2002 02-Jun-2031 6.20 Canadian $ 500 (1)(36)

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1. Interest paid semi-annually.

2. Interest paid annually.

3. Interest paid monthly.

4. Interest paid quarterly.

5. Bonds are extendible at the option of the Province on every coupon date
starting on April 3, 2004, to the final maturity date of April 3, 2009.
Coupon interest is paid semi-annually at a rate of 4.80% in years 1-2,
5.625% in year 3, 6.50% in year 4, 6.875% in year 5, 7.25% in year 6 and
7.75% in the final year. In addition, the Province entered into interest
rate agreements that effectively converted the interest obligation on this
debt to floating Canadian BA rate minus 0.09%.

6. This is the first re-opening. Total issue size is now $700 million.

7. This is the first re-opening. Total issue is now $350 million.

8. Non-callable. This is the second re-opening. Total issue size is now $1,500
million.

9. This is the second re-opening. Total issue size is now $350 million.

10. Bonds are extendible at the option of the Province on every six months
starting on May 3, 2004, to the final maturity date of May 3, 2007. Coupon
interest is paid monthly at a rate of 4.70% in years 1-2, 5.15% in year 3,
6.05% in year 4 and 6.90% in the final year. In addition, the Province
entered into interest rate agreements that effectively converted the
interest obligation on this debt to floating Canadian BA rate minus 0.09%.

11. Bonds are extendible at the option of the Province on every six months
starting on May 6, 2004, to the final maturity date of May 6, 2009. Coupon
interest is paid monthly at a rate of 4.62% in years 1-2, 5.00% in year 3,
6.00% in year 4, 6.5% in year 5, 7.00% in year 6 and 7.25% in the final
year. In addition, the Province entered into interest rate agreements that
effectively converted the interest obligation on this debt to floating
Canadian BA rate minus 0.09%.

12. This is a variable payment zero coupon bonds. Payment of installments of
the principal of the bonds are made semi-annually on January 7 and July 7
of each year with the final Principal installment payment on July 7, 2012.

13. This is the 4th re-opening. Total issue size is now $250 million.

14. Bonds are extendible at the option of the Province on every six months
starting on November 15, 2004, to the final maturity date of November 15,
2007. Coupon interest is paid semi-annually at a rate of 4.50% in years 1-2
and if the maturity date of the bonds is extended, 5.80% in years 3-5. In
addition, the Province entered into interest rate agreements that
effectively converted the interest obligation on this debt to floating
Canadian BA rate minus 0.07%.

15. This is the 5th re-opening. Total issue size is now $290 million.

16. Non-callable. This is the first re-opening. Total issue size is now $1,500
million (including $500 million issued for OEFC purposes).

17. Bonds are extendible at the option of the Province on every six months
starting on July 15, 2004, to the final maturity date of July 15, 2007.
Coupon interest is paid semi-annually at a rate of 4.30% in year 1-2 and if
the maturity date of the bonds is extended, 5.00% in year 3, 5.75% in year
4 and 6.70% in the final year. In addition, the Province entered into
interest rate agreements that effectively converted the interest obligation
on this debt to floating Canadian BA rate minus 0.08%.

18. Bonds are extendible at the option of the Province on every six months
starting on July 23, 2004, to the final maturity date of July 23, 2009.
Coupon interest is paid semi-annually at a rate of 4.3% in years 1-2 and if
the maturity date of the bonds is extended, 5.10% in year 3, 5.8% in year
4, 6.30% in year 5, 6.50% in year 6 and 7.75% in the final year. In
addition, the Province entered into interest rate agreements that
effectively converted the interest obligation on this debt to floating
Canadian BA rate minus 0.07%.

19. This is the first re-opening. Total issue size is now $100 million.

20. This is the 14th re-opening. Total issue size is now $4,237.7 million.

21. This is the first re-opening. Total issue size is now $94.29 million.

22. Ontario Savings Bonds Series 2002 were available in variable types,
maturities and interest rates. This was the eighth issue of provincial
savings bonds.

23. This is the third re-opening. Total issue size is now $2,000 million
(including $500 million issued for OEFC purposes).

24. Proceeds used to fund purchase of MV ($33 million). No cash impact.

25. This is the fourth re-opening. Total issue size is now $2,500 million
(including $500 million issued for OEFC purposes).

26. Bonds are extendible at the option of the Province on the Initial Maturity
Date of September 10, 2004, and on each Extended Maturity Date thereafter
to the final maturity date of September 10, 2009. Coupon interest is paid
semi-annually at a rate of 4.50% in years 1-3, 5.25% in year 4, 6.00% in
year 5, 6.50% in year 6 and 7.25% in the final year. In addition the
Province entered into interest rate agreements that effectively converted
the interest obligation on this debt into floating rate Canadian BA rate
minus 0.07%.

27. The total issue size is now $500 million.

28. The Province entered into currency exchange agreements that effectively
converted these U.S. Dollar obligations to Canadian Dollar obligations at
an exchange rate of $1.565. In addition, the Province entered into interest
rate agreements that effectively converted the interest obligation on this
debt to a fixed rate of 4.47%.

29. This is the second re-opening. Total issue size is now $115 million.

30. The Province entered into currency exchange agreements that effectively
converted these U.S. Dollar obligations to Canadian Dollar obligations at
an exchange rate of $1.586. In addition, the Province entered into interest
rate agreements that effectively converted the interest obligation on this
debt to a fixed rate of 4.73%.

31. This note pays no interest for the first two years. If the note is not
called, it pays 5.5% semi-annually. In addition, the first two years were
swapped to BAs minus 0.06%.

32. This is the first re-opening and the total issue size is now U.S. $750
million. The Province entered into currency exchange agreements that
effectively converted these U.S. Dollar obligations to Canadian Dollar
obligations at an exchange rate of 1.567. In addition, the Province entered
into interest rate agreements that effectively converted the interest
obligation on this debt to a fixed rate of 4.74%.

33. The Province entered into currency exchange agreements that effectively
converted these U.S. Dollar obligations to Canadian Dollar obligations at
an exchange rate of $1.5250. In addition, the Province entered into
interest rate agreements that effectively converted the interest obligation
on this debt to a fixed rate of 5.3652%.

34. The Province entered into currency exchange agreements that effectively
converted these U.S. Dollar obligations to Canadian Dollar obligations at
an exchange rate of $1.584. In addition, the Province entered into interest
rate agreements that effectively converted the interest obligation on this
debt to a floating rate funding.

35. This is the third reopening. Total issue size is now $575 million.

36. This is the fifth reopening. Total issue size is now $1,500 million.

DEBT ISSUED BY THE PROVINCE FOR ONTARIO ELECTRICITY CORPORATION ("OEFC")

Principal
Date of Issue Date of Maturity Interest Rate % Funds (in millions) References
26-Nov-2002 15-Dec-2005 2.625 US $ 268 (1)(2)

1. Interest paid semi-annually.

2. The Province entered into currency exchange agreements that effectively
converted these U.S. Dollar obligations to Canadian Dollar obligations at
an exchange rate of $1.584. In addition, the Province entered into interest
rate agreements that effectively converted the interest obligation on this
debt to a floating rate funding.

Non-Public Debt

Non-public debt is debt issued to certain public sector pension plans or
the Federal Government and its agencies. As of March 31, 2002, approximately
20.7% of provincial purpose liabilities were in the form of non-public debt.
Non-public debt is composed almost exclusively of debt to pension plans, the two
largest components being Ontario Teachers' Pension Fund debt (8.3% of total
provincial purpose liabilities) and CPP debt (7.5% of total provincial purpose
liabilities).

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities comprise transfer payments,
interest on public debt, salaries, wages, benefits, materials, supplies, and
deferred revenue.

Retirement Benefits Liabilities

As at March 31,
Restated(1)
Retirement Benefits Liability (Asset) 2001 2002
(in millions)
Obligation for retirement benefits $ 44,517 $ 49,658
Less: pension fund net assets..... (51,911) (54,203)
Unamortized experience gains...... 8,592 4,952
Adjustments (2)................... 1,519 1,378
Retirement Benefits liability..... $ 2,717 $ 1,785

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(1) Fiscal 2000-01 has been restated to reflect the accounting changes. See 3.
Public Finance - (1) Financial Reporting - Accounting changes."

(2) Adjustments in the above table are made for the following: i) amounts
reported by the plans at December 31, instead of the Province's year-end of
March 31; ii) unamortized initial unfunded liability for jointly sponsored
plans for unfunded liability related to periods before the plans became
jointly sponsored plans. iii) unamortized balances related to temporary
deviation from the plans (e.g., contribution reduction); and iv)
contributions payable by the Province that are reflected in the plan
assets.

The Province is responsible for sponsoring several pension plans. The most
significant plans are the Public Service Pension Plan ("PSPP"), the Ontario
Public Service Employees' Union ("OPSEU") Pension Plan, and the Ontario
Teachers' Pension Plan ("OTPP").

These three plans are defined benefit plans that provide Ontario government
employees and elementary and secondary school teachers and administrators a
guaranteed amount of retirement income. Benefits are based primarily on the best
five-year average salary of members and their length of service, and are indexed
to the Consumer Price Index to provide protection against inflation. Plan
members and the Province are each responsible for matching contributions to the
plans of between seven to nine per cent of the member's salary per annum.

Funding of these plans is based on statutory actuarial valuations. Such
valuations, undertaken at least every three years, use more conservative
assumptions than those used in annual best estimates' valuations that are used
for financial statement purposes. Under partnership agreements between the
Province and OPSEU and between the Province and the Ontario Teachers' Federation
("OTF"), new gains and losses arising after January 1, 1993 from the statutory
actuarial funding valuations are to be shared equally by the partners.

The Province had also committed to make additional payments over forty
years to eliminate the unfunded liabilities of all three plans that were
identified in the January 1, 1990 statutory valuations. As at March 31, 2002,
the unfunded liabilities of all three plans have been eliminated.

During the year, in accordance with the 1998 agreement between partners of
the OTPP, the OTF amended the plan to use $6.1 billion of the plan surplus for
benefit improvements. These improvements included a permanent Factor 85 early
retirement program, lowering the eligibility for a reduced pension to age 50
from age 55 and a reduction in the offset for Canada Pension Plan ("CPP")
benefits. The government's share of past service cost of this amendment of
$2,279 million is included in fiscal year 2001-02 Pension Expenditure, fully
offset by recognition of unamortized experience gains of $2,279 million.

Other Liabilities

Other liabilities include deferred revenues, pension and related benefit
funds for the Provincial Judges Pension Fund and the Deputy Minister's
Supplementary Benefit Account, externally restricted funds and other
miscellaneous liabilities.

Claims Against the Crown

Of the claims outstanding against the Crown in Right of Ontario as at March
31, 2002, 64 were for amounts over $50 million each. These claims arise from
legal action, either in progress or threatened, in respect of aboriginal land
claims, breach of contract, damages to persons and property and like items. As
of December 6, 2002 there were 68 claims outstanding against the Crown, which
were for amounts over $50 million each. The cost to the Province, if any, cannot
be determined because the outcome of these actions is uncertain.

Province of Ontario Savings Office Net Deposits

The Province of Ontario Savings Office ("POSO") accepts deposits from
general public, government and other public bodies. These deposits form part of
the Consolidated Revenue Fund and are liabilities of the Province. The Ontario
Financing Authority operates POSO as agent of the Minister of Finance. In the
May 9, 2001 Budget, the Minister of Finance announced that the Government would
be seeking a buyer for the Province of Ontario Savings Office. POSO's sale is
overseen by the Ontario SuperBuild Corporation. An RFP was released on September
25, 2002. It is expected that the sale will close in early 2003.

Liabilities for Ontario Electricity Financial Corporation ("OEFC") (formerly
Ontario Hydro)

The Province has borrowed money on behalf of Ontario Electricity Financial
Corporation from the CPP and in the U.S. and Canadian public capital markets.
This debt is offset by bonds of OEFC bearing like terms and conditions to these
Ontario obligations.

DEBT
SELECTED CHARACTERISTICS BY TYPE OF ISSUE
As at March 31, 2002 (1)

Average
Average Annual Cost Average Annual
As a Percentage Term to to the Rate of Growth
of Total Maturity Province March 31, 2002
(%) (Years) (%) (%)
Debt for Provincial Purposes
Publicly Held Debt
Debentures & Bonds (2)................................. 53.1 9.1 6.5 3.2
Treasury Bills......................................... 1.4 0.1 2.2 33.1
Non-Public Debt
Canada Pension Plan.................................... 6.9 7.2 10.6 (3.0)
Ontario Teacher's Pension Fund......................... 7.5 5.2 11.7 (5.5)
Ontario Public Service Employees'
Union Pension Plan (OPSEU).......................... 1.1 8.1 11.8 (2.5)
Public Service Pension Fund............................ 2.3 8.1 11.8 (2.5)
Ontario Municipal Employees'
Retirement Fund..................................... 0.3 1.9 9.5 (7.9)
Other.................................................. 0.8 16.6 7.5 (2.9)
73.4 8.4 7.6 1.3
Province of Ontario Savings Office &
Other Liabilities
Province of Ontario Savings Office....................... 1.7 N/A 3.4 2.1
Other Liabilities........................................ 10.0 N/A -- (9.6)
Debt issued for Investment in the
Electricity Sector..................................... 6.1 38.0 5.8 0.0
17.8 38.0 5.3 1.8
Debt for OEFC Purposes (3)
Canada Pension Plan...................................... 1.3 7.2 9.6 (9.0)
Canadian Public Market................................... 5.0 6.5 5.5 170.5
Treasury Bills........................................... 2.0 0.1 2.1 6.0
U.S. Commercial Paper.................................... 0.5 0.1 1.8 1.4
8.8 4.7 5.0 45.6
Total.................................................... 100.0 10.7 7.7 3.2

----------

(1) Prepared on the basis of modified accrual and consolidation accounting. See
"3. Public Finance-- (1) Financial Reporting-- Overview", above.

(2) All balances are expressed in Canadian dollars. The balances above reflect
the effect of related derivatives contracts entered into by the Province.
See "4. Public Debt-- (6) Financial Tables-- II. Summary of OEFC Purpose
Debt-- Risk Management and Derivative Financial Instruments", above.

(3) Proceeds of this debt have been advanced to OEFC in exchange for bonds with
like terms and conditions.

Debt Record

The Province has never defaulted on the payment of principal or interest on
any of its obligations. Payments have been made when due, subject during wartime
to any applicable laws and regulations forbidding such payments.

Debt Maturity and Interest Charges

At March 31, 2002, approximately 53.6% of the debt issued for provincial
purposes and OEFC Program was scheduled to mature within the next five years and
78.4% within the next 10 years. Interest charges on Provincial Purpose Debt were
$8,509 million for 2001-02 and are estimated to be $8,550 million for fiscal
2002-03 on an accrual and consolidation basis of accounting.

DEBT MATURITY SCHEDULE

As at March 31, 2002 (1)

Debt issued for Provincial
Purposes(2)
Year Ending Publicly Held Non-Public OEFC
March 31, Debt (3) Debt Purposes (4) Total % Of Total
(in millions)
2003............................................. $12,143(5) $ 2,381 $ 3,796(5) $ 18,320 15.2
2004............................................. 5,639 2,546 350 8,535 7.1
2005............................................. 9,117 2,241 3,250 14,608 12.1
2006............................................. 12,659 2,595 500 15,754 13.1
2007............................................. 5,382 1,886 119 7,387 6.1
2003-2007........................................ 44,940 11,649 8,015 64,603 53.6
2008-12.......................................... 14,673 10,566 4,716 29,955 24.8
2013-17.......................................... 289 3,296 -- 3,585 3.0
2018-22.......................................... 51 2,162 134 2,347 1.9
2023-27.......................................... 7,430 43 -- 7,473 6.2
2028-52.......................................... 12,493 -- 104 12,597 10.4
$79,876 $27,716 $12,969(6) $ 120,561 100.0

----------

(1) Prepared on the basis of modified accrual and consolidation accounting.

(2) Includes debt issued by Government Organizations.

(3) All balances are expressed in Canadian dollars. The balances above reflect
the effect of related derivative contracts entered into by the Province.

(4) This debt is offset by bonds of Ontario Electricity Financial Corporation
("OEFC") bearing like terms and conditions to the Ontario obligations.
Pursuant to the Ontario Electricity Act, 1998, OEFC was established as a
continuation of Ontario Hydro on April 1, 1999.

(5) Includes: Province - $2,118 million in Treasury Bills and $809 million in
U.S. Commercial Paper.
OEFC - $2,990 million in Treasury Bills and $758 million in U.S.
Commercial Paper.

(6) In addition, the Province has advanced to OEFC an overnight loan of $248
million.

(4) Consolidated Debt of the Ontario Public Sector

Overview

While centralized financing is prominent in Ontario, not all funding of the
public sector is shown on the Province's financial statements. Since the
responsibilities assigned to the Canadian provinces by the Constitution are
uniform (although not all provinces have chosen to assume the same set of
responsibilities), interprovincial comparisons are more clearly facilitated by
the presentation of the consolidated debt. This method of presenting public
sector debt is not affected by the degree of centralization or decentralization
of Provincial public sector financing. Included in the total is the debt of
municipalities with separate revenue sources, and all of the sector's revenue
sources under provincial jurisdiction.

CONSOLIDATED DEBT OF THE ONTARIO PUBLIC SECTOR

As at March 31, % Of Total
2002
(in millions)
Net Provincial Debt (1)(2)(3).............................. $ 112,036 74.1
Ontario Electricity Financial Corporation (OEFC) Debt
Debt Issued by the Province.............................. 12,969 8.6
Debt Guaranteed by the Province (4)...................... 16,147 10.7
Loans Guaranteed (5)....................................... 2,788 1.8
Other Public Sector Debt (6)............................... 7,212 4.8
Total Consolidated Debt of the Ontario Public Sector....... $ 151,152 100.00

----------

Source: Ontario Ministry of Finance.

(1) Prepared on the basis of modified accrual and consolidation accounting. See
"3. Public Finance-- (1) Financial Reporting-- Overview", above.

(2) All balances are expressed in Canadian dollars. The balances above reflect
the effect of related derivative contracts entered into by the Province.
See "4. Public Debt-- (6) Financial Tables-- I. Summary of Net Provincial
Debt and II. Summary of OEFC Purpose Debt-- Risk Management and Derivative
Financial Instruments".

(3) Net Provincial Debt represents total Liabilities less Financial Assets.

(4) The guaranteed debt excludes bank loans. Debt denominated in foreign
currencies that has been hedged is recorded at the Canadian dollar
equivalent using the rates of exchange established by the terms of the
agreements. Other foreign currency debt is translated to Canadian dollars
at year-end rates of exchange.

(5) The provision for loans guaranteed is based on an estimate of the likely
loss arising from guarantees under the Ontario Student Support Program and
is reflected in the Accrued Liabilities for Transfer Payments (Financial
Statements, 2001-2002, Schedule 4)

(6) Other Public Sector Debt comprises local government debt of $5,459 million
and colleges, universities and hospitals' debt of $1,753 million.

As at March 31, 2002, Net Provincial Debt accounts for 74.1% of the total
Consolidated Debt of the Ontario Public Sector and appears as direct obligations
on the Province's Statement of Financial Position. Debt Issued by the Province
for Ontario Electricity Financial Corporation accounts for 8.6% and debt and
loans guaranteed by the Province account for an additional 12.5%, leaving 4.8%
of public sector debt attributable to other public bodies.

(5) Selected Debt Statistics

The following tables examine the Net Provincial Debt and the Consolidated
Debt of the Ontario Public Sector in absolute terms and in relation to certain
provincial economic indicators.

NET PROVINCIAL DEBT

Average
Annual
Rate of
Growth
As at March 31, %
Restated(3)
1998 1999 2000 2001 2002 1998-2002
(in millions unless otherwise indicated)
Net Provincial Debt(1)(2).. $112,735 $114,737 $113,715 $112,480 $112,036 (0.2)
Debt per Capita............ 10,022 10,076 9,864 9,615 9,419 (1.5)
Debt/Personal Income (%)... 38.9 37.9 35.3 32.8 31.5 (5.2)
Debt/GDP (%)............... 31.3 30.4 27.8 26.0 25.2 (5.0)
----------

Sources: Ontario Ministry of Finance.

(1) Prepared on the basis of modified accrual and consolidation accounting.

(2) Figures for fiscal 1997-98 and 1998-99 have been restated to reflect the
change from Provincial Purpose Debt to Net Provincial Debt. Net Provincial
Debt represents total Liabilities less Financial Assets.

(3) Fiscal 2000-01 has been restated to reflect the accounting changes. See "3.
Public Finance - (1) Financial Reporting - Accounting Changes".

CONSOLIDATED DEBT OF THE ONTARIO PUBLIC SECTOR

Average
Annual
Rate of
Growth
As at March 31, %
Restated(4)
1998(3) 1999 2000 2001 2002 1998-2002
(in millions unless otherwise indicated)
Consolidated Debt (1)(2)..... $ 149,517 $ 151,803 $151,628 $152,784 $151,152 0.4
Consolidated Debt per Capita. 13,292 13,331 13,153 13,061 12,791 (1.0)
Consolidated Debt/Personal
Income (%)................. 51.6 50.1 47.0 44.5 42.8 (4.6)
Consolidated Debt/GDP (%).... 41.5 40.2 37.1 35.3 34.3 (4.7)
----------

Sources: Ontario Ministry of Finance.

(1) Prepared on the basis of modified accrual and consolidation accounting.

(2) Excludes bank loan, Ontario Electricity Financial Corporation early
retirements and the local government sector's sinking funds and own
holdings. Substantially all of the foreign exchange exposure on Provincial
Purpose Debt issued has been hedged by entering into forward rate and
currency exchange agreements. The foreign currency debt that has been
hedged is translated into the Canadian Dollar equivalent using the rates of
exchange established by the terms of the agreements. Other foreign currency
debt is translated to Canadian dollars at year-end rates of exchange.

(3) Figures for fiscal 1997-98 and 1998-99 have been restated to reflect the
change from Provincial Purpose Debt to Net Provincial Debt.

(4) Fiscal 2000-01 has been restated to reflect the accounting changes. See "3.
Public Finance - (1) Financial Reporting - Accounting Changes".

THE CANADIAN DOLLAR

Recent high and low exchange rates for the Canadian dollar in terms of United States cents are as follows:

Jan 1 -
Dec 6
1997 1998 1999 2000 2001 2002
High.............................................................. 74.93 71.23 69.16 69.02 66.95 66.18
Low............................................................... 69.45 63.11 64.62 64.84 62.42 61.99
----------

Source: Bank of Canada.

(6) Financial Tables

I. Summary of Net Provincial Debt (1)

As at March 31,
Restated(2)
1998 1999 2000 2001 2002
(in millions)
Provincial Purpose
Non-Public Debt
Minister of Finance of Canada:
Canada Pension Plan............ $ 11,358 $ 10,487 $ 10,369 $ 10,442 $ 10,063
Ontario Teachers' Pension Fund. 13,822 13,213 12,252 11,535 11,043
Ontario Municipal Employees
Retirement Fund (OMERS)..... 697 666 622 569 502
Public Service Pension Fund.... 3,681 3,604 3,535 3,446 3,331
Ontario Public Service
Employees' 1,749 1,712 1,679 1,637 1,582
Union (OPSEU) Pension Fund.....
Other.......................... 1,346 1,305 1,275 1,235 1,195
$ 32,653 $ 30,987 $ 29,732 $ 28,864 $ 27,716
Publicly Held Debt
Debentures and Bonds (2)....... $ 68,654 $ 72,924 $ 73,007 $ 73,726 $ 76,949
Treasury Bills................. 675 950 3,002 $ 2,680 $ 2,118
U.S. Commercial Paper (2)...... -- 272 396 523 809
$ 69,329 $ 74,146 $ 76,405 $ 76,929 $ 79,876
Debt Issued for Provincial $ 101,982 $ 105,133 $ 106,137 $ 105,793 $ 107,592
Purposes.........................
Debt Issued for Investment in
Electricity Sector............. $ -- $ -- $ 8,885 $ 8,885 $ 8,885
Province of Ontario Savings 2,245 2,517 2,812 2,482 2,438
Office...........................
Other Liabilities (3).......... 21,995 19,237 19,403 17,786 14,661
Total Liabilities for Provincial
Purposes....................... 126,222 126,887 137,237 134,946 133,576
Less: Financial Assets........... 13,487 12,150 23,522 22,466 21,540
Net Provincial Debt.............. $ 112,735 $ 114,737 $ 113,715 $ 112,480 $ 112,036

----------

Source: Ontario Ministry of Finance

(1) Prepared on the basis of modified accrual and consolidation accounting.

(2) Fiscal 2000-01 has been restated to reflect the accounting changes. See "3.
Public Finance - (1) Financial Reporting - Accounting Changes".

(3) All balances are expressed in Canadian dollars. The balances above reflect
the effect of related derivative contracts entered into by the Province.

(4) Other Liabilities include Accounts Payable and Accrued Liabilities and
Pensions.

II. Summary of Ontario Electricity Financial Corporation ("OEFC") Purpose Debt

As at March 31,
1998 1999 2000 2001 2002
(in millions)
OEFC Purposes (1)
Canada Pension Plan.................. $ 2,748 $ 2,748 $ 2,748 $ 2,267 $ 1,881
Public Market (2).................... 137 1,500 3,454 6,358 7,340
Treasury Bills....................... -- -- 2,661 2,134 2,990
U.S. Commercial Paper (2)............ -- -- 737 436 758
Overnight loan from the Province to -- -- 47 -- 248
OEFC...................................
Total OEFC Purpose Debt................ $ 2,885 $ 4,248 $ 9,647 $11,195 $ 13,217
----------

Source: Ontario Ministry of Finance

(1) Proceeds of this debt have been advanced to OEFC in exchange for bonds with
like terms and conditions.

(2) Debt denominated in foreign currencies that has been hedged is recorded at
the Canadian dollar equivalent using the rates of exchange established by
the terms of the agreements. Other foreign currency debt is translated to
Canadian dollars at year-end rates of exchange.

Risk Management and Derivative Financial Instruments

The Province employs various risk management strategies and operates within
strict risk exposure limits to ensure exposure to risk is managed in a prudent
and cost effective manner. A variety of strategies are used, including the use
of derivative financial instruments ("derivatives").

Derivatives are financial contracts, the value of which is derived from
underlying financial instruments. The Province uses derivatives for the purpose
of hedging and minimizing interest costs. Hedges are created primarily through
swaps, which are legal arrangements under which the Province agrees with another
party to exchange cash flows based upon one or more notional amounts during a
specified period. This allows the Province to offset its existing obligations
and thereby effectively convert them into obligations with more desirable
characteristics. Other derivative instruments used by the Province include
forward foreign exchange contracts, forward rate agreements, futures and
options.

Foreign exchange or currency risk is the risk of debt servicing costs and
principal payments varying due to fluctuations in foreign exchange rates. To
minimize currency risk, the Province uses derivative contracts to convert
foreign currency cash flows into Canadian dollar denominated cash flows. The
current policy allows unhedged foreign exchange exposure up to 5 per cent of
Debt Issued for Provincial Purposes, Debt Issued for Investment in Electricity
Sector and deposits with the Province of Ontario Savings Office. At year-end,
1.6 per cent (2001, 1.7 per cent) of this debt was unhedged, with most of the
currency exposure to U.S. dollars. A one cent increase in the U.S. dollar versus
the Canadian dollar would result in an increase of Public Debt Interest expense
by $5 million.

Interest rate reset risk is the sum of floating rate exposure, net of
liquid reserves, and fixed rate debt maturing within the next 12-month period as
a percentage of Debt Issued for Provincial Purposes, Debt Issued for Investment
in the Electricity Sector and deposits with the Province of Ontario Savings
Office. The Province's current policy allows interest rate resetting risk to
reach a maximum of 25 per cent of the above liabilities. The Province creates or
reduces its exposure to interest rate changes by issuing or retiring short term
debt, or by entering into or closing out derivative positions. As at March 31,
2002, interest rate resetting exposure was 12.5 per cent (2001, 9.7 per cent). A
one per cent (100 basis points) increase in interest rates would result in an
increase of Public Debt Interest expense by $80 million.

Liquidity risk is the risk that the Province will not be able to meet its
current short-term financial obligations. To reduce liquidity risk, the Province
maintains liquid reserves, i.e. cash and temporary investments, at levels that
will meet future cash requirements and will give the Province flexibility in the
timing of issuing debt. In addition, the Province has short-term note programs
as alternative sources of liquidity.

The table below presents a maturity schedule of the Province's derivatives
by type, outstanding at March 31, 2002, based on the notional amounts of the
contracts. Notional amounts represent the volume of outstanding derivative
contracts and are not indicative of credit or market risk. Notional amounts are
not representative of actual cash flows.

DERIVATIVE PORTFOLIO NOTIONAL VALUE

As at March 31,

6-10 Over 10 2002 2001
Maturity in Fiscal Year 2003 2004 2005 2006 2007 Years Years Total Total
(in millions)
Swaps:
Interest Rate..... $10,068 $2,546 $3,928 $9,871 $ 1,987 $11,441 $1,404 $41,245 $40,357
Cross Currency.... 8,443 3,699 4,174 6,889 1,540 4,442 -- 29,187 33,445
Forward Foreign
Exchange Contracts.. 1,252 -- -- -- -- -- -- 1,252 1,090
Futures 171 -- -- -- -- -- -- 171 769
TOTAL............... $19,934 $6,245 $8,102 $16,760 $ 3,527 $15,883 $1,404 $71,855 $75,661
----------

(1) Other includes forward foreign exchange contracts, futures, spreadlocks,
foreign exchange and bonds options and forward rate agreements.

Derivatives introduce credit risk, which is the risk of counterparty
defaulting on contractual derivative obligations in which the Province has an
unrealized gain. The table below presents the credit risk associated with the
derivative financial instrument portfolio, measured through the replacement
value of derivative contracts, at March 31, 2002.

CREDIT RISK EXPOSURE

As at March 31,

2001 2002
(in millions)
Gross Credit Risk Exposure (1).... $ 4,899 $ 4,156
Less: Netting Agreements(2)....... (2,002) (2,146)
Net Credit Risk Exposure (3)...... $ 2,897 $ 2,010

----------

Note:

(1) Gross credit risk exposure includes credit exposure on swaps, options,
futures, forward rate agreements and forward foreign exchange agreements.

(2) Contracts do not have coterminous settlement dates; however, master
agreements provide for close out netting.

(3) Total exposure to counterparties with positive exposure (meaning that
counterparties owed the Province) was $4,156 million (2001, $4,899 million)
and the total negative exposure to counterparties (meaning that the
Province owed the counterparties) was $2,146 million (2001, $2,002 million)
for a total unrealized net asset of $2,010 million (2001, $2,897 million).

The Province manages its credit risk exposure from derivatives by entering
into contractual agreements ("master agreements") that provide for termination
netting and, if applicable, payment netting with virtually all of its
counterparties. The gross credit risk exposure represents the amount of loss
that the Province would incur if every counterparty to which the Province had
credit risk exposure were to default at the same time, and the contractual
netting provisions could not be exercised. The net credit risk exposure includes
the mitigating impact of these netting provisions. The Province also manages its
credit risk exposure by regularly monitoring compliance with credit and risk
limits. The minimum credit rating for authorized counterparties is A- from
Standard & Poor's or A3 from Moody's Investors Service.

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED

At as March 31, 2002

PAYABLE IN CANADA IN CANADIAN DOLLARS

NON-PUBLIC DEBT

To Minister of Finance of Canada
Canada Pension Plan Investment Fund:
Year ending March 31
2003 1983 CPP 12.01 to 16.53 1,235,751,000
2004 1984 CPP 10.92 to 12.14 1,200,847,000
2005 1985 CPP 12.08 to 14.06 1,133,182,000
2006 1986 CPP 10.58 to 12.57 1,213,502,000
2007 1987 CPP 9.36 to 10.17 232,269,000
2008 1988 CPP 10.79 42,300,000
2012 1992 CPP 9.81 to 10.04 987,249,000
2013 1993 CPP 9.17 to 9.45 700,137,000
2019 1999 CPP 5.81 to 5.84 45,270,000
2020 1999 CPP 5.50 to 6.91 869,889,000
2021 2000 CPP 6.33 to 6.67 609,834,000
2022 2001 CPP 6.17 to 6.47 389,955,000
--------------------
8,660,185,000 (5)
--------------------
To Ontario Teacher's Pension Fund:
Year ending March 31
2003 1978-1991 TI 9.82 to 10.53 655,570,855
2004 1982-1984 TI 12.88 to 13.34 900,000,000
2005 1984-1991 TI 12.60 to 13.27 821,000,000
2006 1985-1991 TI 11.07 to 14.40 1,070,000,000
2007 1985-1991 TI 10.26 to 13.01 1,185,000,000
2008 1983-1991 TI 10.15 to 15.38 1,945,000,000
2009 1986-1991 TI 10.98 to 11.50 1,465,000,000

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED-- Continued

------------------------ -------------------- ------------------- -------------------- -------------------- ----------------
Date of Date of Interest
Maturity Issue Series Rate Outstanding Reference
------------------------ -------------------- ------------------- -------------------- -------------------- ----------------
% $
2010 1986-1991 TI 10.22 to 11.24 1,236,000,000
2011 1987 TI 10.11 to 10.32 560,000,000
2012 1988-1991 TI 10.68 to 11.24 580,000,000
2013 1989-1991 TI 11.06 to 11.31 625,000,000
--------------------
11,042,570,855 (1)
--------------------
To Ontario Municipal Employees Retirement Fund:
Year ending March 31
2003 1996 MER 8.02 to 10.28 235,259,824
2004 1996 MER 9.45 163,695,000
2007 1996 MER 9.77 102,675,000
--------------------
501,629,824 (1)(38)
--------------------
To Colleges of Applied Arts & Technology Pension Plan:
Year ending March 31
2003 1996 CAAT 8.02 to 10.28 30,540,176
2004 1996 CAAT 9.45 24,255,000
2007 1996 CAAT 9.77 18,625,000
--------------------
73,420,176 (1)(38)
--------------------
To Ryerson Retirement Pension Plan:
Year ending March 31
2003 1995 RRPF 14.65 926,036
2004 1995 RRPF 12.78 1,081,061
2005 1995 RRPF 13.33 1,229,597
2006 1995 RRPF 11.16 1,464,199
2007 1995 RRPF 9.64 1,618,485
--------------------
6,319,378 (1)
--------------------
To Canada Mortgage and Housing Corporation:
Year ending March 31
2000-2003 1971 to 1978 CMHC 5.375 45,171
2000-2004 1974 to 1975 CMHC 5.125 to 7.875 156,150
2000-2005 1971 to 1975 CMHC 5.125 to 8.625 575,867
2000-2006 1973 to 1976 CMHC 5.125 to 10.375 727,377
2000-2007 1974 to 1977 CMHC 5.375 to 10.375 2,418,139

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

To Public Service Pension Fund:
Year ending March 31
2003 1997 OPB 9.81 to 16.95 64,277,498
2004 1997 OPB 9.50 to 14.65 134,530,331
2005 1997 OPB 9.82 to 12.78 160,431,479
2006 1997 OPB 11.05 to 13.33 172,212,515
2007 1997 OPB 11.16 to 13.33 188,766,466
2008 1997 OPB 15.38 218,362,903
2009 1997 OPB 12.79 264,512,886
2010 1997 OPB 12.88 273,669,452
2011 1997 OPB 13.33 282,994,558
2012 1997 OPB 11.55 336,229,108
2013 1997 OPB 10.38 374,479,804
2014 1997 OPB 11.10 409,677,031
2015 1997 OPB 11.19 450,938,707
--------------------
3,331,082,738 (1)(23)(65)
--------------------
PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

To Ontario Housing Corporation
Year ending March 31
2010 1994 OHC 8.264 to 9.215 422,388,939
2011 1994 to 1995 OHC 8.242 to 9.898 694,880,091
2012 1995 OHC 9.655 33,382,267
2013 1995 OHC 9.655 6,561,000
--------------------
1,157,212,297 (1)(2)
--------------------
TOTAL NON-PUBLIC DEBT ISSUED 26,563,856,086
====================

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

PUBLICLY HELD DEBT
Apr. 22, 2003 Dec. 29, 1992 HG 8.75 750,000,000 (1)
July 13, 2003 Jan. 13, 2000 NB Floating 100,000,000 (8)
Sept. 16, 2003 Sept. 16, 1998 MA Floating 100,000,000 (1)(73)
June 2, 2004 Feb. 3, 2000 MG 4.875 200,000,000 (1)(97)
June 4, 2004 Oct. 4, 2001 DMTN20 Floating 75,500,000 (1)(102)
June 11, 2004 Oct. 11, 2001 DMTN21 Floating 50,000,000 (1)(100)
Sept. 15, 2004 June 21, 1994 HU 9.00 1,450,000,000 (1)
Dec. 2, 2004 Oct. 28, 1999 MV 6.40 107,000,000 (34)
Mar. 1, 2005 Mar. 1, 2002 DMTN38 Floating 50,000,000 (115)
Mar. 8, 2005 Dec. 10, 1999 MZ 6.25 1,250,000,000 (1)(106)
May 13, 2005 May 13, 1999 ML 5.85 50,000,000 (44)
Dec. 1, 2005 Sept. 13, 1995 JP 8.25 1,000,000,000 (1)
Feb. 1, 2006 Feb. 1, 1999 MJ 5.00 90,000,000 (1)
Feb. 1, 2006 Feb. 1, 2002 DMTN34 Floating 500,000,000 (1)(105)
Feb. 20, 2006 Feb. 20, 2006 JZ 0.00-17.25 107,000,000 (1)(40)
March 8, 2006 Oct. 26, 2000 NL 5.90 1,000,000,000 (1)(107)
July 20, 2006 July 20, 2001 DMTN6 Step-Up 45,000,000 (3)
July 24, 2006 July 24, 1996 KE 7.75 600,000,000 (1)(39)
Aug. 21, 2006 Aug. 21, 2001 DMTN9 Step-Up 25,000,000 (22)
Sept. 5, 2006 Sept. 5, 2001 DMTN12 Step-Up 25,000,000 (26)
Sept. 11, 2006 Sept. 11, 2001 DMTN13 Step-Up 30,000,000 (36)
Sept. 11, 2006 Sept. 11, 2001 DMTN14 6.25 125,000,000 (32)
Nov. 28, 2006 Nov. 28, 2001 DMTN25 Step-Up 25,000,000 (94)
Dec. 12, 2006 Dec. 12, 2001 DMTN27 Step-Up 25,000,000 (88)
Jan. 12, 2007 Jan. 12, 1995 JF 9.50 132,950,000 (1)(21)
Feb. 12, 2007 Feb. 12, 2002 DMTN35 Step-Up 50,000,000 (108)
Feb. 20, 2007 Nov. 20, 2001 DMTN24 Floating 100,000,000 (95)
Mar. 1, 2007 Mar. 1, 2002 DMTN36 Step-Up 35,000,000 (113)
PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

------------------------ -------------------- ------------------- -------------------- -------------------- ----------------
Date of Date of Interest
Maturity Issue Series Rate Outstanding Reference
------------------------ ----------------
------------------------ -------------------- ------------------- -------------------- -------------------- ----------------
% $
Mar. 8, 2007 Sept. 11, 2001 DMTN16 5.20 1,000,000,000 (1)(97)
Mar. 19, 2007 Mar. 19, 2002 DMTN41 Step-Up 25,000,000 (6)
June 4, 2007 Dec. 4, 2001 DMTN28 Step-Up 30,000,000 (72)
June 18, 2007 Dec. 18, 2001 DMTN31 Step-Up 33,000,000 (111)
July 21, 2007 Jan. 21, 2002 DMTN32 Step-Up 35,000,000 (112)
Aug. 27,2007 Aug. 27, 2001 DMTN11 Step-Up 25,000,000 (42)
Sept. 12, 2007 Sept. 12, 1997 LE 6.125 1,160,000,000 (1)(39)(49)
Dec. 10, 2007 Dec. 10, 1997 LH 5.875 66,475,000 (1)(109)
June 3, 2008 June 3, 1999 MN Floating 50,000,000 (46)
Jul. 15, 2008 Feb. 6, 1998 LM 5.50 75,000,000 (1)
Sept. 4, 2008 Sept. 4, 1998 LW 6.30 50,000,000 (1)
Sept. 17, 2008 Sept. 17, 2001 DMTN15 Step-Up 38,000,000 (52)
Oct. 22, 2008 Oct. 22, 2001 DMTN22 Step-Up 25,000,000 (99)
Dec. 1, 2008 Mar. 5, 2002 DMTN39 Floating 150,000,000 (116)
Dec. 1, 2008 Sept. 15, 1998 LZ 5.70 1,550,000,000 (1)(97)
Dec. 5, 2008 Dec. 5, 2001 DMTN30 Floating 50,000,000 (110)
Mar. 18, 2009 Mar. 18, 2002 DMTN40 Step-Up 30,000,000 (117)
Apr. 1, 2009 Apr. 9, 1998 LR 6.15 205,000,000 (87)
July 27, 2009 July 27, 1999 MR 5.75-6.50 40,000,000 (25)
Sept. 4, 2009 Sept. 4, 2009 LD 6.00-7.625 75,000,000 (71)
Oct. 3, 2009 Oct. 3, 2009 DMTN19 Step-Up 33,000,000 (103)
Nov. 19, 2009 Mar. 19, 1999 MU 6.20 1,000,000,000 (1)
Mar. 4, 2010 Mar. 4, 2002 DMTN37 Step-Up 25,000,000 (114)
May 30, 2010 May 30, 2001 DMTN4 Step-Up 50,000,000 (59)
June 28, 2010 June 28, 2001 DMTN5 Step-Up 30,000,000 (68)
July 30, 2010 July 30, 2001 DMTN7 Step-Up 25,000,000 (70)
Nov. 19, 2010 Nov. 24, 2000 NK 6.10 1,620,000,000 (1)(74)
Sept. 28, 2011 Sept. 28, 2011 DMTN17 Step-Up 40,000,000 (104)
Oct. 5, 2011 Oct. 5, 2001 DMTN18 Step-Up 40,000,000 (101)
Oct. 30, 2011 Oct. 30, 2001 DMTN23 Step-Up 35,000,000 (16)
PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

------------------------ -------------------- ------------------- -------------------- -------------------- ----------------
Date of Date of Interest
Maturity Issue Series Rate Outstanding Reference
------------------------ -------------------- ------------------- -------------------- -------------------- ----------------
------------------------ -------------------- ------------------- -------------------- -------------------- ----------------
% $
Nov. 29, 2011 Nov. 29, 2001 DMTN26 Step-Up 50,000,000 (89)
Dec. 2, 2011 Feb. 27, 2002 DMTN8 6.10 500,000,000 (1)(60)
Sept. 1, 2015 Sept. 1, 2000 DMTN1 6.25 34,000,000 (1)(45)
Sept. 4, 2020 Sept. 4, 1998 LY 6.30 50,000,000
July 13, 2022 July 13, 1992 HC 9.50 1,685,720,000 (1)(53)
Sept. 8, 2023 Sept. 8, 1993 HP 8.10 1,350,000,000 (1)
June 2, 2025 Dec. 20, 1994 JE 9.50 500,000,000 (1)
Dec. 2, 2025 Oct. 5, 1995 JQ 8.50 1,000,000,000 (1)
Feb. 6, 2026 Feb. 6, 1996 JY 8.00 12,500,000 (1)
June 2, 2026 Dec. 21, 1995 JU 8.00 1,000,000,000 (1)
Dec. 2, 2026 Feb. 13, 1997 KR 8.00 386,500,000 (1)(18)
Dec. 2, 2026 Jan. 20, 1999 MH 7.00 124,584,000 (1)(90)
Feb. 3, 2027 Aug. 5, 1997 KN 7.50 62,600,000
Feb. 3. 2027 Aug. 5, 1997 KT 6.95 34,275,000
Feb. 3, 2027 Apr. 1 1997 KY 7.50 11,549,000 (1)
Feb. 3, 2027 Dec. 4, 1998 LA 7.50 5,507,000 (1)
Feb. 4, 2027 Feb. 4, 1998 KQ 7.375 990,000
June 2, 2027 Oct. 17, 1996 KJ 7.60 4,209,400,000 (1)(75)
Aug. 25, 2028 Feb. 25, 1998 LQ 6.25 2,020,000 (1)
Mar. 8, 2029 Jan. 8, 1998 LK 6.50 4,677,000,000 (1)
Jan. 13, 2031 Sept. 8, 1995 JN 9.50 125,000,000 (1)
June 2, 2031 Mar. 27, 2000 NF 6.20 1,000,000,000 (1)
Nov. 3, 2034 Nov. 3, 1994 HY 9.75 280,000,000 (1)
Jan. 10, 1995 to
Jan. 10, 2035 Nov. 30, 1994 HZ 9.4688 2,315,904 (1)(24)(96)
" " JA 9.4688 18,177,469 (1)(24)(82)
" " JB 9.4688 8,482,324 (1)(24)
" " JC 9.4688 4,764,354 (1)(24)
" " JD 9.4688 3,171,134 (1)(24)
Feb. 8, 2035 Feb. 8, 1995 JJ 9.875 73,000,000 (19)
June 20, 2036 June 20, 1996 KC 8.25 211,000,000 (1)
PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

------------------------ -------------------- ------------------- -------------------- -------------------- ----------------
Date of Date of Interest
Maturity Issue Series Rate Outstanding Reference
------------------------ -------------------- ------------------- -------------------- -------------------- ----------------
------------------------ -------------------- ------------------- -------------------- -------------------- ----------------
% $
June 20, 2038 Sept. 16, 1996 KG 8.10 120,000,000 (1)
July 13, 2038 July 29, 1998 LS 5.75 50,000,000 (1)
Aug. 25, 2038 Aug. 17, 1998 LT 6.00 100,000,000 (1)
July 13, 2039 Feb. 2, 1999 MK 5.65 300,000,000 (1)(77)
Dec. 2, 2039 Feb. 25, 2000 NE 5.70 553,700,000 (1)(78)
Dec. 2, 2041 Aug. 15, 2001 DMTN10 6.20 200,000,000 (1)
March 8, 2042 Dec. 4, 2001 DMTN29 6.00 41,000,000 (1)
June 2, 2042 Jan. 18, 2002 DMTN33 6.00 50,000,000 (1)
June 10, 2045 May 25, 1995 JL 8.44 35,531,176 (1)(41)
Mar. 1, 2045 Mar. 1, 1995 JK 9.50 150,000,000 (20)
--------------------
--------------------
34,730,712,361
--------------------
ONTARIO SAVINGS BONDS
March 1, 2000 March 1, 1995 Annual Variable 3,948,700 (29)
March 1, 2000 March 1, 1995 Compound Variable 6,605,450 (29)
June 21, 2000 June 21, 1997 Annual Fixed 619,200 (29)
June 21, 2000 June 21, 1997 Compound Fixed 333,800 (29)
June 21, 2001 June 21, 1996 Annual Step-Up 2,264,300 (29)
June 21, 2001 June 21, 1996 Compound Step-up 5,904,400 (29)
June 21, 2001 June 21, 1996 Annual Variable 952,900 (29)
June 21, 2001 June 21, 1996 Compound Variable 1,024,600 (29)
June 21, 2001 June 21, 1998 Annual Fixed 809,000 (29)
June 21, 2001 June 21, 1998 Compound Fixed 1,056,000 (29)
June 21, 2002 June 21, 1999 Annual Fixed 164,087,100 (30)(62)
June 21, 2002 June 21, 1999 Compound Fixed 142,842,300 (30)(62)
June 21, 2003 June 21, 1999 Compound Step-Up 251,425,300 (62)(92)
June 21, 2003 June 21, 1998 Annual Step-up 270,634,500 (62)(92)
June 21, 2003 June 21, 2000 Annual Fixed 436,581,500 (30)(62)
June 21, 2003 June 21, 2000 Compound Fixed 356,804,400 (30)(62)(92)
June 21, 2004 June 21, 1997 Annual Step-up 446,472,900 (62)(66)
June 21, 2004 June 21, 1997 Compound Step-up 365,084,300 (62)(66)
PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

------------------------ -------------------- ------------------- -------------------- -------------------- ----------------
Date of Date of Interest
Maturity Issue Series Rate Outstanding Reference
------------------------ -------------------- ------------------- -------------------- -------------------- ----------------
------------------------ -------------------- ------------------- -------------------- -------------------- ----------------
% $
June 21, 2004 June 21, 1997 Annual Variable 13,517,300 (62)(67)
June 21, 2004 June 21, 1997 Compound Variable 11,979,500 (62)(67)
June 21, 2004 June 21, 1999 Compound Step-up 249,434,300 (62)(28)
June 21, 2004 June 21, 1999 Annual Step-up 238,368,500 (62)(28)
June 21, 2004 June 21, 2001 Annual Fixed 707,567,800 (30)(62)
June 21, 2004 June 21, 2001 Compound Fixed 564,416,100 (30)(62)
June 21, 2005 June 21, 1998 Annual Variable 102,744,400 (62)(81)
June 21, 2005 June 21, 1998 Compound Variable 100,422,900 (62)(81)
June 21, 2005 June 21, 2000 Annual Step-up 700,401,000 (62)(48)
June 21, 2005 June 21, 2000 Compound Step-up 613,105,300 (62)(48)
June 21, 2006 June 21, 1999 Compound Variable 103,501,100 (62)(81)
June 21, 2006 June 21, 1999 Annual Variable 87,111,100 (62)(81)
June 21, 2006 June 21, 2001 Annual Step-Up 874,195,300 (62)(63)
June 21, 2006 June 21, 2001 Compound Step-Up 1,101,935,400 (62)(63)
June 21, 2007 June 21, 2000 Compound Variable 179,459,800 (62)(56)
June 21, 2007 June 21, 2000 Annual Variable 175,055,100 (62)(56)
June 21, 2008 June 21, 2001 Annual Variable 248,987,200 (62)(64)
June 21, 2008 June 21, 2001 Compound Variable 200,865,300 (62)(64)
--------------------
--------------------
8,730,518,050
--------------------
TOTAL PAYABLE IN CANADA IN CANADIAN DOLLARS 70,025,086,497 (1)
====================

GLOBAL MARKET PAYABLE IN CANADIAN DOLLARS
Mar. 11, 2003 Mar. 11, 1993 HK 8.00 1,500,000,000 (97)
Dec. 8, 2003 July 20, 1993 HM 7.75 1,250,000,000
Jan. 24, 2005 Jan. 24, 2000 NC Floating 500,000,000 (50)
Jan. 19, 2006 Jan. 19, 1996 JV 7.50 1,250,000,000 (39)
Feb. 7, 2024 Feb. 7, 1994 HS 7.50 1,250,000,000
--------------------
--------------------
TOTAL PAYABLE IN CANADIAN DOLLARS 5,750,000,000 (1)
====================

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

PAYABLE IN THE UNITED STATES IN CANADIAN DOLLARS
Feb. 18, 2013 Feb. 18, 1993 HJ 9.24 250,000,000
--------------------
TOTAL PAYABLE IN THE UNITED STATES IN CANADIAN DOLLARS . . . 250,000,000 (1)
--------------------

PAYABLE IN THE UNITED STATES IN U.S. DOLLARS
June 30, 2005 Mar. 13, 2002 NP 4.20 250,000,000
--------------------
TOTAL PAYABLE IN THE UNITED STATES IN U.S. DOLLARS 250,000,000 (1)
--------------------
CANADIAN DOLLAR EQUIVALENT
EXCHANGE RATE OF $1.5885 397,125,000 (10)
--------------------

GLOBAL MARKET PAYABLE IN U.S. DOLLARS
June 4, 2002 June 4, 1992 HB 7.75 2,000,000,000
Jan. 27, 2003 Jan. 27, 1993 HH 7.375 3,000,000,000
June 22, 2004 June 22, 1994 HV 7.625 1,000,000,000
Aug. 4, 2005 Aug. 4, 1995 JM 7.00 1,250,000,000
Feb. 21, 2006 Feb. 21, 1996 KA 6.00 2,050,000,000 (86)
Oct. 1, 2008 Oct. 1, 1998 MB 5.50 1,750,000,000 (85)
--------------------
TOTAL PAYABLE IN U.S. DOLLARS 11,050,000,000 (1)
--------------------
CANADIAN DOLLAR EQUIVALENT
EXCHANGE RATE OF $1.36613 15,095,696,133 (43)
--------------------
PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

PAYABLE IN EUROPE IN U.S. DOLLARS
June 12, 2003 Jan. 19, 2001 EMTN47 Floating 100,000,000
--------------------
--------------------
TOTAL PAYABLE IN EUROPE IN U.S. DOLLARS 100,000,000 (1)
--------------------
CANADIAN DOLLAR EQUIVALENT
EXCHANGE RATE OF $1.5260 152,600,000 (11)
--------------------

PAYABLE IN JAPAN IN JAPANESE YEN
Jan. 28, 2003 Jan. 28, 1993 YL001 5.50 10,000,000,000 (1)
Mar. 24, 2003 Mar. 22, 1993 YL002 4.80 7,000,000,000 (1)
Aug. 25, 2003 Aug. 25, 1993 YL003 Floating 10,000,000,000 (1)(4)
Sept. 22, 2003 Sep. 22, 1993 YL004 5.20 10,000,000,000 (1)
July 6, 2004 July 6, 1994 YL005 4.40 10,000,000,000 (1)
July 21, 2004 July 21, 1994 YL006 4.53 10,000,000,000 (1)
Sept. 8, 2004 Sept. 7, 1994 YL008 4.71 7,000,000,000 (1)
Oct. 25, 2004 Oct. 25, 1994 YL009 5.00 10,000,000,000 (1)
Dec. 20, 2004 Dec. 20, 1994 YL010 4.80 5,000,000,000 (1)
Aug. 31, 2005 Aug. 31, 1995 YL011 3.10 25,000,000,000 (1)
Mar. 16, 2007 Mar. 18, 1997 KU 3.10 5,000,000,000 (1)(54)
Mar. 16, 2007 Mar. 18, 1997 KV 3.25 15,000,000,000 (1)(55)
July 18, 2007 July 18, 1997 YL012 2.615 10,000,000,000 (1)
Nov. 12, 2009 Nov. 12, 1999 YL014 2.00 10,000,000,000 (1)
--------------------
--------------------
TOTAL PAYABLE IN JAPAN IN JAPANESE YEN 144,000,000,000
--------------------
PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

GLOBAL MARKET PAYABLE IN JAPANESE YEN
Jan. 25, 2010 Jan. 13, 2000 ND 1.875 50,000,000,000
--------------------
TOTAL PAYABLE IN JAPANESE YEN 50,000,000,000 (1)
--------------------
CANADIAN DOLLAR EQUIVALENT
EXCHANGE RATE OF $0.01204 601,817,180
--------------------

PAYABLE IN EUROPE IN JAPANESE YEN
Mar. 15, 2005 Mar. 15, 1995 EMTN015 6.00 2,000,000,000 (33)
Sept. 8, 2005 Mar. 23, 1998 EMTN037 6.21 10,000,000,000
Sept. 19, 2005 Sept. 4, 1998 EMTN038 6.205 10,000,000,000
Aug. 29, 2006 Aug. 29, 1996 EMTN021 4.28 10,000,000,000 (57)
Mar. 26, 2007 Apr. 3, 1997 EMTN033 3.20 10,000,000,000 (47)
June 13, 2007 June 13, 1997 EMTN034 3.58 10,000,000,000 (79)
Feb. 25, 2008 Feb. 25, 1998 EMTN036 2.60 7,100,000,000 (80)
Nov. 19, 2009 Nov. 24, 1999 EMTN046 2.00 10,000,000,000
--------------------
--------------------
TOTAL PAYABLE IN EUROPE IN JAPANESE YEN 69,100,000,000 (1)
--------------------
CANADIAN DOLLAR EQUIVALENT
EXCHANGE RATE OF $0.01270 877,724,744 (15)
--------------------

PAYABLE IN EUROPE IN EUROS
Jan. 13, 2004 Jan. 13, 1994 HR 6.25 735,825,710 (119)
Sept. 27, 2004 Sept. 27, 1994 HX 7.75 181,512,086 (120)
Feb. 17, 2006 Feb. 17, 1999 EMTN043 3.50 27,000,000 (1)
July 29, 2008 July 29, 1996 KD 6.875 457,347,051 (121)
July 21, 2009 July 21, 1997 EMTN035 5.875 457,347,051 (118)
--------------------
--------------------
TOTAL PAYABLE IN EUROPE IN EUROS 1,859,031,898
--------------------
CANADIAN DOLLAR EQUIVALENT
EXCHANGE RATE OF $1.78117 3,311,260,234 (27)
--------------------
PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

GLOBAL MARKET PAYABLE IN NEW ZEALAND DOLLARS
Dec. 3, 2008 Dec. 3, 1998 MF 6.25 250,000,000
--------------------
TOTAL PAYABLE IN NEW ZEALAND DOLLARS 250,000,000 (1)
--------------------
CANADIAN DOLLAR EQUIVALENT
EXCHANGE RATE OF $0.82770 206,925,000 (69)
--------------------

PAYABLE IN EUROPE IN NORWEGIAN KRONER
Dec. 29, 2004 Sept. 12, 1996 EMTN022 7.00 300,000,000
--------------------
TOTAL PAYABLE IN EUROPE IN NORWEGIAN KRONER 300,000,000 (1)
--------------------
CANADIAN DOLLAR EQUIVALENT
EXCHANGE RATE OF $0.21235 63,704,048 (61)
--------------------

PAYABLE IN EUROPE IN POUNDS STERLING
July 30, 2002 July 30, 1992 HD 9.375 200,000,000
June 10, 2004 June 10, 1998 EMTN039 6.375 200,000,000
--------------------
TOTAL PAYABLE IN EUROPE IN POUNDS STERLING 400,000,000 (1)
--------------------
CANADIAN DOLLAR EQUIVALENT
EXCHANGE RATE OF $2.30675 922,700,000 (12)
--------------------

PAYABLE IN EUROPE IN SWISS FRANCS
Jan. 27, 2003 Jan. 27, 1993 HF 6.25 400,000,000
July 7, 2003 July 7, 1998 EMTN041 2.50 250,000,000
--------------------
TOTAL PAYABLE IN EUROPE IN SWISS FRANCS 650,000,000 (1)
--------------------
CANADIAN DOLLAR EQUIVALENT

EXCHANGE RATE OF $1.055083 685,804,141 (13)
--------------------

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

TOTAL PUBLICLY HELD DEBT ISSUED 79,858,211,805
--------------------
--------------------

--------------------
--------------------
TOTAL DEBT ISSUED FOR PROVINCIAL PURPOSES 106,422,067,891 (83)
====================

DEBT ISSUED FOR INVESTMENT PURPOSES:
ONTARIO POWER GENERATION INC. 5,126,000,000
HYDRO ONE INC. 3,759,000,000
--------------------
--------------------

TOTAL DEBT ISSUED FOR INVESTMENT PURPOSES 8,885,000,000 (122)
====================
====================

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

PAYABLE IN CANADA IN CANADIAN DOLLARS

NON-PUBLIC DEBT
Canada Pension Plan Investment Fund:
----------------------------------------------------------------------------------------------------------------------------
------------------------ -------------------- ------------------- -------------------- -------------------- ----------------
2007 1986 CPP 9.64 119,000,000
2008 1988 CPP 9.13 to 9.72 388,715,000
2009 1989 CPP 9.62 to 10.31 589,319,000
2010 1990 CPP 9.61 to 10.31 650,712,000
2021 2001 CPP 6.08 19,375,000
2022 2002 CPP 6.26 to 6.29 114,000,000
--------------------
--------------------
TOTAL PAYABLE IN CANADA IN CANADIAN DOLLARS 1,881,121,000 (5)
--------------------

PAYABLE IN CANADA IN CANADIAN DOLLARS

PUBLICLY HELD DEBT
Nov. 1, 2002 May 9, 2000 HC-NH 6.239 47,743,828 (17)(98)
June 2, 2004 Dec. 9, 1998 HC-MG 4.87 3,000,000,000 (76)
Mar. 8, 2006 Mar. 8, 2001 CDB-NLA 5.90 500,000,000
Dec. 1, 2008 Jan. 22, 1999 HC-LZ 5.70 650,000,000
Nov. 19, 2009 July 26, 2000 HC-MU 6.20 500,000,000
Nov. 19, 2010 Sept. 1, 2000 HC-NK 6.10 500,000,000
Mar. 15, 2011 Mar. 15, 2001 DMTN3 5.50-6.80 50,000,000 (37)
Dec. 2, 2011 July 20, 2001 DMTN8 6.10 500,000,000
June 2, 2027 Feb. 4, 2000 HC-KJA 7.60 25,500,000
Aug. 25, 2028 Apr. 6, 1999 HC-LQA 6.25 78,600,000
June 2, 2031 Feb. 24, 2000 HC-NF 6.20 500,000,000 (51)
--------------------
--------------------
TOTAL PAYABLE IN CANADA IN CANADIAN DOLLARS 6,351,843,828
--------------------

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

GLOBAL MARKET PAYABLE IN U.S. DOLLARS
Oct. 1, 2008 Mar. 19, 2001 GLB-MBB 5.50 250,000,000
--------------------
--------------------
TOTAL PAYABLE IN U.S. DOLLARS 250,000,000
--------------------
CANADIAN DOLLAR EQUIVALENT
EXCHANGE RATE OF $1.550 387,500,000 (93)
--------------------

TREASURY BILLS 2,990,000,000
--------------------

U.S. COMMERCIAL PAPER (in U.S. Dollars) 474,000,000
--------------------
CANADIAN DOLLAR EQUIVALENT
EXCHANGE RATE OF $1.5994 758,129,550
--------------------
--------------------

TOTAL DEBT ISSUED FOR OEFC 12,968,594,378 (123)
====================

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

References:

1. Non-callable.

2. Debentures issued to the Ontario Housing Corporation are not negotiable and
not transferable or assignable but are redeemable, in whole or in part, at
the option of the Ontario Housing Corporation, on six months prior written
notice.

3. Bonds are extendible at the option of the Province every six months
starting July 20, 2003, to the final maturity date of July 20, 2006. Coupon
interest is paid monthly at a rate of 5.35% in years 1-2, 5.90% in year 3,
6.50% in year 4 and 7.00% in the final year. In addition, the Province
entered into interest rate agreements that effectively converted the
interest obligation on this debt to a fixed rate of 4.99%.

4. Interest payable is six-month Yen LIBOR.

5. Securities sold to the Canada Pension Plan Investment Fund are payable 20
years after their respective dates of issue, are not negotiable and not
transferable or assignable but are redeemable in whole or in part before
maturity at the option of the Minister of Finance of Canada, on six months'
prior notice, when the Minister deems it necessary in order to meet the
requirements of the Canada Pension Plan. In the case of redemption before
maturity, the Ontario Securities are to be redeemed in the order in which
they were issued and the amount of Ontario Securities to be redeemed at any
time shall be proportionate to the amount of all securities then held to
the credit of the said fund represented by Ontario Securities.

6. Bonds are extendible at the option of the Province on every coupon date
starting March 19, 2004, to the final maturity date of March 19, 2007.
Coupon interest is paid semi-annually at a rate of 4.20% in years 1-2,
4.75% in year 3, 5.75% in year 4 and 7.1% in the final year. In addition,
the Province has entered into interest rate agreements that effectively
converted the interest rate obligations on this debt to floating 3-month
Canadian BA rate minus 0.09%.

7. The terms of these debentures require that equal payments be made each year
until their maturity. Each payment consists of blended principal and
interest.

8. Interest payable is three-month Canadian BA.

9. The Province entered into currency exchange agreements that effectively
converted these U.S. dollar obligations to Canadian dollar obligations at
an exchange rate of 1.36625. In addition, the Province entered into
interest rate agreements that effectively converted the interest obligation
on this debt to a fixed rate of 8.64%.

10. The Province entered into currency exchange agreements that effectively
converted these U.S. dollar obligations to Canadian dollar obligations at
an exchange rate of 1.5885. In addition, the Province entered into interest
rate agreements that effectively converted the interest obligation on this
debt to a floating rate Canadian dollar 3-month BA rate minus 0.07%.

11. The Province entered into currency exchange agreements that effectively
converted these U.S. dollar obligations to Canadian dollar obligations at
an exchange rate of 1.5260. In addition, the Province entered into interest
rate agreements that effectively converted the interest obligation on this
debt to a fixed rate of 4.85%.

12. The Province entered into currency exchange agreements that effectively
converted these Pounds Sterling obligations to Canadian dollar obligations
at an exchange rate of 2.30675. In addition, the Province entered into
interest rate agreements that effectively converted the interest obligation
on this debt to a fixed rate of 6.80%.

13. The Province entered into currency exchange agreements that effectively
converted these Swiss franc obligations to Canadian dollar obligations at
an exchange rate of 1.055083. In addition, the Province entered into
interest rate agreements that effectively converted the interest obligation
on this debt to a fixed rate of 8.75% on $437 million and floating Canadian
BA rate minus 0.025% on $249 million.

14. The Province entered into currency exchange agreements that effectively
converted substantially all of these Japanese yen obligations to Canadian
dollar obligations at an exchange rate of 0.01254. In addition, the
Province entered into interest rate agreements that effectively converted
the interest obligation on this debt to a fixed rate of 7.96% on $1,586
million, and floating Canadian BA rate minus 0.051% on $220 million.

15. The Province entered into currency exchange agreements that effectively
converted substantially all of these Japanese yen obligations to Canadian
dollar obligations at an exchange rate of 0.01270. In addition, the
Province entered into interest rate agreements that effectively converted
the interest obligation on this debt to a fixed rate of 6.77%.

16. Bonds are extendible at the option of the Province on six months starting
October 22, 2003, to the final maturity date of October 30, 2011. Coupon
interest is paid monthly at a rate of 4.75% in year 1, 5.0% in year 2,
5.25% in year 3, 5.50% in year 4, 5.75% in year 5, 6.00% in year 6, 6.50%
in year 7, 6.75% in year 8, 7.00% in year 9 and 7.25% in the final year. In
addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligation on this debt to a fixed
rate of 3.12%.

17. During the 2001-02 fiscal year, the Province purchased for cancellation
$69.1 million of the HC-NH bonds.

18. During the 2001-02 fiscal year, the Province purchased for cancellation
$38.5 million of the KR Series bonds.

19. Retractable in whole or in part on February 8, 2007, at the holder's
option, provided that the notice of retraction is made during the period
from July 15, 2006 to January 15, 2007 inclusive. Such election is
irrevocable.

20. Retractable in whole or in part on March 1, 2010, at the holder's option,
provided that the notice of retraction is made during the period from March
1, 1995 to February 12, 2010 inclusive. Such election is irrevocable.

21. Exchangeable at any time, in whole or in part, at the holder's option, for
an equivalent principal amount of Series JG 9.50% bonds due January 12,
2035.

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

22. Bonds are extendible at the option of the Province on every coupon date
starting on August 21, 2003, to the final maturity date of August 21, 2006.
Coupon interest is paid semi-annually at a rate of 5.20% in years 1-2,
5.50% in year 3, 6.00% in year 4 and 6.70% in the final year. In addition,
the Province entered into interest rate agreements that effectively
converted the interest obligation on this debt to a fixed rate of 4.63%.

23. The terms of these debentures require that the principal be repaid in 12
equal monthly payments in the year preceding the date of maturity.

24. The terms of these debentures require unequal payments, consisting of both
principal and interest, to be made at predetermined irregular intervals. On
January 10, 2035, the principal to be repaid on each debenture will be $2.3
million.

25. Bonds are extendible at the option of the Province on every coupon date
starting on July 27, 2001, to the final maturity date of July 27, 2009.
Coupon interest is paid semi-annually at a rate of 5.75% in years 1-2,
5.90% in years 3-4, 6.00% in years 5-6, 6.15% in years 7-8, 6.25% in year 9
and 6.50% in the final year. In addition, the Province entered into
interest rate agreements that effectively converted the interest obligation
on this debt to floating Canadian BA rate minus 0.125%.

26. Bonds are extendible at the option of the Province on every coupon date,
starting on September 5, 2003, to the final maturity date of September 5,
2006. Coupon interest is paid semi-annually at a rate of 5.00% in years
1-2, 5.25% in year 3, 5.75% in year 4 and 6.40% in the final year. In
addition, the Province entered into interest rate agreements that
effectively converted the interest obligation on this debt to a fixed rate
of 4.39%.

27. The Province entered into currency exchange agreements that effectively
converted these Euro obligations to Canadian dollar obligations at an
exchange rate of 1.78117. In addition, the Province entered into interest
rate agreements that effectively converted the interest obligation on this
debt to a fixed rate of 6.98% on $3,265 million and floating Canadian BA
rate minus 0.055% on $46 million.

28. The interest rate was set at 4.75% for the first year. The interest payable
is 6.00% in the second year, 6.25% in the third year, 6.50% in the fourth
year and 6.75% in the final year.

29. The 1995 series of Ontario Savings Bonds matured on March 1, 2000, the 1997
fixed series bonds matured on June 21, 2000, the 1996 Series bonds and the
1998 fixed series bonds matured on June 21, 2001. The outstanding amounts
at March 31, 2002 represent bonds not yet presented for redemption.

30. In every year for the period 1997-2001, the Province issued fixed rate OSBs
each with terms of three years. Interest rates were set for the term of the
bonds. The rate on the 1997 and 1998 Series bonds was set at 5.25%. The
rate on the 1999 and 2001 Series bonds was 5.50% and the rate on 2000
Series bonds was 6.50%.

31. During the 2001-02 fiscal year, Series EMTN45 was reopened once, bringing
the total issue to $375 million.

32. Callable in full, and not in part, on September 4, 2003, at par. In
addition, the Province entered into interest rate agreements that
effectively converted the interest obligation on this debt to a fixed rate
of 4.06%.

33. Proceeds of issue and repayment are in Japanese yen. Interest is payable in
Australian dollars, based on a notional principal of AUD 27.2 million at a
rate of 6.00%.

34. The bonds are extendible at the option of the bondholder on or before
November 10, 2004. Coupon interest is paid at 6.40% for the first five
years. If extended to final maturity date of December 2, 2014, the coupon
will step-up to 6.80%. In addition, the Province entered into interest rate
agreements that effectively converted the interest obligation on this debt
to floating Canadian BA rate.

35. Interest payable is six-month U.S. LIBOR plus 0.0475%.

36. Bonds are extendible at the option of the Province on every coupon date
starting September 11, 2003, to the final maturity date of September 11,
2006. Coupon interest is paid semi-annually at a rate of 4.75% in years
1-2, 5.10% in year 3, 5.55% in year 4 and 6.40% in the final year. In
addition, the Province entered into interest rate agreements that
effectively converted the interest obligation on this debt to a fixed rate
of 4.07%.

37. Retractable in whole or in part on March 15, 2005, at the holder's option
provided that irrevocable notice of retraction is made on March 1, 2005.
Coupon interest is paid at 5.50% for the first four years and 6.80% for the
remaining six years on outstanding bonds.

38. The original debentures payable to OMERS were replaced effective December
31, 1995, with debentures payable to OMERS and to Colleges of Applied Arts
and Technology Pension Plan, in the amounts of $741.6 million and $90.9
million, respectively. The terms and conditions remain the same as those of
the original debentures.

39. Agricorp, a Government Organization, holds $15 million in Series LE, $10
million in Series JV and 6.2 million in Series KE.

40. No interest is payable in the first five years, thereafter interest is
payable monthly at an annual interest rate of 17.25%.

41. The terms of these debentures require unequal payments, consisting of both
principal and interest, to be made at predetermined irregular intervals
with the final payment on January 10, 2045. The total principal and
interest to be paid over the life of the debenture is $1,325 million in
total.

42. Bonds are extendible at the Option of the Province on every coupon date,
starting on August 27, 2003, to the final maturity date of August 27, 2007.
Coupon interest is paid semi-annually at a rate of 5.10% in years 1-2,
5.60% in year 3, 5.80% in year 4, 6.00% in year 5and 7.00% in the final
year. In addition, the Province entered into interest rate agreements that
effectively converted the interest on this debt to a fixed rate of 4.52%.

43. The Province entered into currency exchange agreements that effectively
converted these U.S. dollar obligations to Canadian dollar obligations at
an exchange rate of 1.36613. In addition, the Province entered into
interest rate agreements that effectively converted the interest obligation
on this debt to a fixed rate of 7.80%.

44. Bond is callable on May 13, 2003 at the option of the Province. In
addition, the Province entered into interest rate agreements that
effectively converted the interest obligation on this debt to floating
Canadian BA rate minus 0.05%.

45. The Province entered into interest rate agreements that effectively
converted the interest obligation on this debt to floating Canadian BA rate
minus 0.02%.

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

46. Interest is payable at floating Canadian BA rate plus 0.85% paid quarterly
for the first two years, then 5.75% semi-annually if not called. In
addition, the Province entered into interest rate agreements that
effectively converted the interest obligation on this debt to floating
Canadian BA rate minus 0.07%.

47. Proceeds of issue and repayment are in Japanese yen. Interest is payable in
Australian dollars based on a notional principal of Australian dollars
103.2 million at a rate of 3.2% payable annually. In addition, the Province
entered into interest rate agreements that effectively converted the
interest obligation on this debt to a fixed rate of 6.90%.

48. The interest rate was set at 5.75% for the first year. The minimum interest
payable is 6.25% in the second year, 6.50% in the third year, 6.75% in the
fourth year and 7.00% in the final year.

49. During the 2001-02 fiscal year, Series LE was reopened once, bringing the
total issue size to $1,160 million.

50. The Province entered into interest rate agreements that effectively
converted the interest obligation on this debt to a fixed rate of 6.63%.

51. This issue has been on-lent to OEFC until June 2, 2010, after which the
issue will be assumed by the Province until the maturity date.

52. Bonds are extendible at the option of the Province on the Initial Maturity
Date of September 17, 2003 and on each Extended Maturity Date thereafter to
the final maturity date of September 17, 2008. Coupon interest is paid
annually at a rate of 4.75% in years 1-2, 5.25% in year 3, 6.20% in year 4,
6.25% in year 5, 6.50% in year 6 and 6.75% in the final year. In addition,
the Province entered into interest rate agreements that effectively
converted the interest rate obligation on this debt to a fixed rate of
3.79%.

53. During the 2001-02 fiscal year, the Province purchased for cancellation
$164.28 million of the HC Series bonds.

54. Proceeds of issue and repayment are in Japanese yen. Interest is payable in
Australian dollars, based on a notional principal of AUD 52.5 million at a
rate of 3.10%. In addition, the Province entered into interest rate
agreements that effectively converted the interest obligation on this debt
to floating Canadian BA rate minus 0.051%.

55. Proceeds of issue and repayment are in Japanese yen. Interest is payable in
U.S. dollars, based on a notional principal of USD 120.8 million at a rate
of 3.25%. In addition, the Province entered into interest rate agreements
that effectively converted the interest obligation on this debt to floating
Canadian BA rate minus 0.051%.

56. The Minister of Finance will reset the interest rate every six months. The
initial interest rate was set at 6.00%. Effective December 21, 2001, the
interest rate was set at 2.00%.

57. Proceeds of issue and repayment are in Japanese yen. Interest is payable in
Australian dollars, based on a notional principal of AUD 121.1 million at a
rate of 4.28%. In addition, the Province entered into interest rate
agreements that effectively converted the interest obligation on this debt
to a fixed rate of 7.38%.

58. During the 2001-02 fiscal year, Series EMTN42 was reopened once, bringing
the total issue to $350 million.

59. Bonds are extendible at the option of the Province on the Initial Maturity
Date of May 30, 2003 and on each Extended Maturity Date thereafter to the
final maturity date of May 30, 2010. Coupon interest is paid semi-annually
at a rate of 5.50% in year 1, 5.75% in year 2, 6.00% in year 3, 6.25% in
year 4, 6.50% in year 5, 6.75% in year 6, 7.00% in year 7, 7.50% in year 8
and 8.00% in the final year. In addition, the Province entered into
interest rate agreements that effectively converted the interest rate
obligation on this debt to a fixed rate of 5.04%.

60. During the 2001-02 fiscal year, Series DMTN8 was re-opened once, bringing
the total issue size to $1,000 million ( including $500 million for OEFC
purposes).

61. The Province entered into currency exchange agreements that effectively
converted these Norwegian kroner obligations to Canadian dollar obligations
at an exchange rate of 0.21235. In addition, the Province entered into
interest rate agreements that effectively converted the interest obligation
on this debt to floating Canadian BA rate minus 0.028%.

62. Current outstanding OSBs are redeemable at the option of the holder on June
21 and December 21 with the exception of fixed rate bonds which are
redeemable at maturity only. All current outstanding OSBs may be redeemed
upon the death of the beneficial owner. The 1999, 2000 and 2001 series may
also be redeemed during the 14 calendar days immediately following June 21
and December 21. The Minister of Finance may reset the interest rate from
time to time prior to maturity.

63. The interest rate was set at 4.25% for the first year. The rate is 5.00% in
the second year, 5.75% in the third year, 6.25% in the fourth year and
6.75% in the final year.

64. The Minister of Finance will reset the interest rate every six months. The
initial interest rate was set at 4.50%. Effective December 21, 2001, the
interest rate was set at 2.00%.

65. Pursuant to the Ontario Public Service Employees' Pension Act 1994 and the
Asset Transfer Agreement of December 12, 1994, the Province is obligated to
re-split the debentures between the Public Service Pension Fund ("PSP
Fund") and the Ontario Public Service Employees' Union Pension Plan Trust
Fund ("OPSEU Fund") based on accurate data when it is available. On June
13, 1997 a Restated Sponsorship Amendment and Asset Transfer Agreement was
signed, replacing the 1994 agreement. Pursuant to this Agreement on
September 17, 1997, the re-split of the debentures was completed. To effect
this redistribution of assets, $3,745.8 million of debentures held by PSPF
and $1,751.4 million of debentures held by OPSEU were retired and replaced
by $3,726.8 million and $1,770.4 million of debentures to be held by PSPF
and OPSEU respectively.

66. The interest rate was set at 3.00% for the first year. The interest payable
is 5.25% in the second year, 6.00% in the third year, 6.50% in the fourth
year, 7.00% in the fifth year, 7.50% in the sixth year and 8.00% in the
final year.

67. The Minister of Finance will reset the interest rate every six months. The
initial interest rate was set at 3.25%. Effective December 21, 2001 the
interest rate was set at 2.00%.

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

68. Bonds are extendible at the option of the Province on the Initial Maturity
Date of June 28, 2003 and on each Extended Maturity Date thereafter to the
final maturity date of June 28, 2010. Coupon interest is paid semi-annually
at a rate of 5.70% in years 1-2, 6.00% in years 3-4, 6.25% in year 5, 6.50%
in year 6, 7.00% in year 7, 7.50% in year 8 and 8.00% in the final year. In
addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligation on this debt to a fixed
rate of 4.82%.

69. The Province entered into currency exchange agreements that effectively
converted these New Zealand dollar obligations to Canadian dollar
obligations at an exchange rate of 0.82770. In addition, the Province
entered into interest rate agreements that effectively converted the
interest obligation on this debt to a fixed rate of 5.56%.

70. Bonds are extendible at the option of the Province on the Initial Maturity
Date of July 30, 2003 and on each Extended Maturity Date thereafter to the
final maturity date of July 30, 2010. Coupon interest is paid semi-annually
at a rate of 5.50% in year 1, 5.75% in year 2, 6.25% in years 3-4, 6.50% in
years 5-6,7.00% in year 7, 7.25% in year 8 and 7.50% in the final year. In
addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligation on this debt to a fixed
rate of 4.79%.

71. Notes are extendible at the option of the Province on September 4, 2000,
2003 and 2006 to the final maturity date of September 4, 2009. Coupon
interest is paid semi-annually at a rate of 6.00% in years 1-3, 6.125% in
years 4-6, 6.35% in years 7-9 and 7.625% in years 10-12. In addition, the
Province entered into interest rate agreements that effectively converted
the interest obligations on this debt to floating Canadian BA rate minus
0.22%.

72. Bonds are extendible at the option of the Province on June 4, 2004, to the
final maturity date of June 4, 2007. Coupon interest is paid semi-annually
at a rate of 4.20% in years 1-2 and 6.05% in the remaining three years. In
addition, the Province entered into interest rate agreements that
effectively locked in a gain of 14 basis points.

73. Interest payable is three-month Canadian BA rate minus 0.05%. In addition,
the Province entered into interest rate agreements that effectively
converted the interest obligation on this debt to a fixed rate of 5.23%.

74. During 2001-02, the bondholder of NN Series had the option to purchase an
equal amount of the same issue at 101.739 plus accrued interest on February
20, 2002. This option was exercised, bringing the total issue size to $120
million. NN Series were exchanged for an equal amount of Series NK on March
13, 2002, bringing the total issue of Series NK to $1,620 million.

75. During the 2001-02 fiscal year, Series KJ bonds were reopened once,
bringing the total issue to $4,209.4 million.

76. During the 2001-02 fiscal year, Series HC-MG were reopened twice, bringing
the total issue to $3,000 million.

77. During the 2001-02 fiscal year, Series MK bonds were reopened once,
bringing the total issue to $300 million.

78. During the 2001-02 fiscal year, Series NE bonds were reopened five times,
bringing the total issue to $553.7 million.

79. Proceeds of issue and repayment of principal are in Japanese yen. Interest
is payable in U.S. dollars based on a notional principal of U.S. dollars
86.3 million, at a rate of 3.58% payable annually. In addition, the
Province entered into interest rate agreements that effectively converted
the interest obligation on this debt to a fixed rate of 6.35%.

80. Proceeds of issue and repayment of principal are in Japanese yen. Interest
is payable in U.S. dollars semi-annually based on notional principal of USD
57.1 million, at a rate of 2.6%. In addition, the Province entered into
interest rate agreements that effectively converted the interest obligation
on this debt to a fixed rate of 5.57%.

81. The Minister of Finance will reset the interest rate every six months. The
initial interest rate was set at 5.00%. Effective December 21, 2001 the
interest rate was set at 2.00%.

82. During the 2001-02 fiscal year, the Province purchased for cancellation
$6.6 million of the JA Series bonds.

83. Total Debt Issued for Provincial Purposes does not include the long-term
debt of the Ontario Housing Corporation for $2,212 million, the Toronto
Area Transit Authority (GO Transit) for $447 million and the Ontario
Municipal Improvement Corporation for $79 million.

84. The Treasury Bill balance includes the following Treasury Bill holdings:
$265 million held by the Northern Ontario Heritage Fund Corporation, $91
million held by Ontario Trillium Foundation and $21 million held by Ontario
Securities Commission.

85. During the 2001-02 fiscal year, Series MB was reopened three times,
bringing the total issue to U.S.$2,000 million (including U.S.$250 million
for OEFC purposes).

86. During the 2001-02 fiscal year, Series KA was reopened once, bringing the
total issue to U.S.$2,050 million.

87. Bond is callable on April 1, 2003 at the Province of Ontario's option. In
addition, the Province entered into interest rate agreements that
effectively converted the interest obligations on this debt to floating
Canadian BA rate minus 0.09%.

88. Bonds are extendible at the option of the Province on every coupon date
starting December 12, 2003, to the final maturity date of December 12,
2006. Coupon interest is paid semi-annually at a rate of 4.00% in years
1-2, 4.75% in year 3, 5.90% in year 4 and 7.00% in the final year. In
addition, the Province entered into interest rate agreements that
effectively locked in a gain of 11 basis points.

89. Bonds are extendible at the option of the Province on every coupon date
starting November 29, 2003, to the final maturity date of November 29,
2011. Coupon interest is paid semi-annually at a rate of 4.50% in year 1,
4.75% in year 2, 5.00% in year 3, 5.50% in year 4, 6.00% in year 5, 6.25%
in year 6, 6.50% in year 7, 6.75% in year 8, 7.00% in year 9 and 7.50% in
the final year. In addition, the Province entered into interest rate
agreements that effectively locked in a gain of 8 basis points

90. The terms of these debentures require that a special one-time interest
payment of $31.1 million be made at maturity.

91. U.S. Commercial Paper issues are non-interest bearing with maturities up to
92 days.

92. The interest rate was set at 4.75% for the first year. The minimum interest
payable is 5.00% in the second year, 6.00% in the third year, 6.25% in the
fourth year and 6.50% in the final year.

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

93. The Province entered into currency exchange agreements that effectively
converted these U.S. dollar obligations to Canadian dollar obligations at
an exchange rate of 1.55. In addition, the Province entered into interest
rate agreements that effectively converted the interest obligation on this
debt to a fixed rate of 5.51%.

94. Bonds are extendible at the option of the Province on every coupon date
starting November 28, 2003 to the final maturity date of November 28, 2006.
Coupon interest is paid semi-annually at a rate of 3.50% in years 1-2 and
5.25% in the remaining 3 years. In addition, the Province entered into
interest rate agreements that effectively locked in a gain of 9 basis
points.

95. Bonds are extendible at the option of the Investors every year starting
November 20, 2002 to the final maturity date of February 20 2007. Coupon
interest is paid quarterly at a rate of Canadian BA rate minus 0.05% in
year 1, BA rate minus 0.01% in year 2, BA rate plus 0.03%.in year 3, BA
rate plus 0.05% in year 4 and BA rate plus 0.07% for the remaining term.

96. During the 2001-02 fiscal year, the Province purchased for cancellation
$13.6 million of the HZ Series bonds.

97. Legal Aid, a government organization, holds $10.15 million in Series MG,
$4.75 million in Series HK, $2.89 million in Series LZ and $2.9 million in
Series DMTN16.

98. The terms of these debentures require unequal payments, consisting of
principal and interest, to be paid quarterly until their maturity.

99. Bonds are extendible at the option of the Province on the Initial Maturity
Date of October 22, 2003 and on each Extended Maturity Date thereafter to
the final maturity date of October 22, 2008. Coupon interest is paid
monthly at a rate of 4.00% in years 1-2, 4.50% in year 3, 5.25% in year 4,
6.10% in year 5, 6.75% in year 6 and 7.50% in the final year. In addition,
the Province entered into interest rate agreements that effectively
converted the interest rate obligation on this debt to a fixed rate of
3.46%.

100. Interest is paid quarterly at 3-month Canadian BA rate plus 0.05%. In
addition, the Province entered into interest rate agreements that
effectively locked in a gain of 7.25 basis points.

101. Bonds are extendible at the option of the Province on the Initial Maturity
Date of October 5, 2003 and on each Extended Maturity Date thereafter to
the final maturity date of October 5, 2011. Coupon interest is paid
semi-annually at a rate of 4.70% in year 1, 5.00% in year 2, 5.25% in year
3, 5.50% in year 4, 5.75% in year 5, 6.00% in year 6, 6.25% in year 7,
6.50% in year 8, 7.00% in year 9 and 7.50% in the final year. In addition,
the Province entered into interest rate agreements that effectively
converted the interest rate obligation on this debt to a fixed rate of
3.51%.

102. Interest is paid quarterly at 1-month Canadian BA rate plus 0.05%,
compounded.

103. Bonds are extendible at the option of the Province on the Initial Maturity
Date of October 3, 2003 and on each Extended Maturity Date thereafter to
the final maturity date of October 3, 2009. Coupon interest is paid
semi-annually at a rate of 4.50% in years 1-2, 5.00% in year 3, 5.50% in
year 4, 5.80% in year 5, 6.00% in year 6, 6.50% in year 7 and 7.50% in the
final year. In addition, the Province entered into interest rate agreements
that effectively converted the interest rate obligation on this debt to a
fixed rate of 3.50%.

104. Bonds are extendible at the option of the Province on the Initial Maturity
Date of September 28, 2003 and on each Extended Maturity Date thereafter to
the final maturity date of September 28, 2011. Coupon interest is paid
annually at a rate of 5.00% in years 1-2, 5.05% in years 3-4, 5.10% in year
5, 6.35% in year 6, 6.50% in year 7, 6.75% in year 8 and 7.00% in the final
two years. In addition, the Province entered into interest rate agreements
that effectively converted the interest rate obligation on this debt to a
fixed rate of 3.57%.

105. Interest is paid quarterly at 3-month Canadian BA rate plus 0.03%. In
addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligation on $425 million to a
fixed rate of 4.68%

106. During the 2001-02 fiscal year, Series MZ was re-opened once, bringing the
total issue size to $1,250 million.

107. During the 2001-02 fiscal year, Series NL was re-opened once, bringing the
total issue size to $1,000 million.

108. Bonds are extendible at the option of the Province on the Initial Maturity
Date of February 12, 2004 and on each Extended Maturity Date thereafter to
the final maturity date of February 12, 2007. Coupon interest is paid
semi-annually at a rate of 4.05% in years 1-2, 4.75% in year 3, 6.00% in
year 4 and 7.25% in the final year. In addition, the Province entered into
interest rate agreements that effectively converted the interest rate
obligation on this debt to a fixed rate of 3.31%.

109. On May 31, 2001, the Province purchased for cancellation $58.5 million of
the LH Series.

110. Bonds are extendible at the option of the Investors on the Initial Maturity
Date of December 5, 2002 and on each Extended Maturity Date thereafter to
the final maturity date of December 5, 2008. Coupon interest is paid
quarterly at a rate of Canadian BA rate minus 0.05% in year 1, Canadian BA
rate minus 0.01% in year 2, Canadian BA rate plus 0.03% in year 3, Canadian
BA rate plus 0.05% in year 4, Canadian BA rate plus 0.07% in year 5 and
Canadian BA rate plus 0.08% in the final 2 years.

111. Bonds are extendible at the option of the Province only on the initial
maturity date of June 18, 2004 to the final maturity date of June 18, 2007.
Coupon interest is paid semi-annually at a rate of 4.20% in years 1-2 and
6.05% in the final 3 years, if extended. In addition, the Province entered
into interest rate agreements that effectively locked in a gain of 13 basis
points.

112. Bonds are extendible at the option of the Province on the Initial Maturity
Date of July 21, 2004. Coupon interest is paid semi-annually at a rate of
4.00% in years 1-2 and 6.00% in the final 3 years, if extended. In
addition, the Province entered into interest rate agreements that
effectively converted the interest rate obligation on this debt to a fixed
rate of 3.38%.

113. Bonds are extendible at the option of the Province on every coupon date
starting March 1, 2004, to the final maturity date of March 1, 2007. Coupon
interest is paid semi-annually at a rate of 4.10% in years 1-2, 4.50% in
year 3, 5.75% in year 4 and 7.25% in the final year. In addition, the
Province has entered into interest rate agreements that effectively
converted the interest obligations on this debt to floating 3-month
Canadian BA rate minus 0.08%.

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

III. OUTSTANDING DEBT ISSUED - Continued

114. Bonds are extendible at the option of the Province on every coupon date
starting March 4, 2004 to the final maturity date of March 4, 2010. Coupon
interest is paid at 4.30% for year 1-2, 4.5% for year 3, 5.10% for year 4,
6.0% for year 5, 6.5% for year 6, 7.0% for year 7 and 7.50% for the final
year. In addition, the Province has entered into interest rate agreements
that effectively converted the interest obligations on this debt to
floating 3-month Canadian BA rate minus 0.08%.

115. Interest is paid quarterly at a rate of 3-month Canadian BA rate plus
0.275% up to the maximum of 4.775% for the first year, 5.025% for the
second year and 5.775% for the third year. In addition, the Province has
entered into interest rate agreements that effectively converted the
interest obligation on this debt to floating 3-month Canadian BA rate minus
0.01%.

116. The issue is callable on June 1, 2005, at the option of the Province.
Interest is paid quarterly at a rate of 3-month Canadian BA rate plus 0.59%
in years 1-3 and semi-annually at a rate of 5.70% if not called. In the
event that the bond is not called, the bondholder has the right to exchange
this series for series LZ. In addition, the Province has entered into
interest rate agreements that effectively converted the interest rate
obligations on this debt to floating 3-month Canadian BA rate minus 0.03%.

117. Bonds are extendible at the option of the Province on every coupon date
starting on March 18, 2004, to the final maturity date of March 18, 2009.
Coupon interest is paid semi-annually at a rate of 4.5% in years 1-2, 4.75%
in year 3, 5.5% in year 4, 6.25% in year 5, 6.5% in year 6 and 7% in the
final year. In addition, the Province entered into interest rate agreements
that effectively converted the interest obligations on this debt to
floating 3-month Canadian BA rate minus 0.09%.

118. The amount outstanding as at March 31, 2002, in legacy currency is French
Franc 3,000,000,000. The French franc is converted to Euro using conversion
rate of one Euro equals: 6.55957 French francs in accordance with Council
Regulation (EU) No. 2866/98. In addition, the Province entered into
interest rate agreements that effectively converted the interest obligation
on this debt to a fixed rate of 5.29%.

119. The amount outstanding as at March 31, 2002, in legacy currency is Deutsche
marks 1,439,150,000. The Deutsche marks are converted to Euro using
conversion rate of one Euro equals: 1.95583 Deutsche marks in accordance
with Council Regulation (EU) No. 2866/98. In addition, the Province entered
into interest rate agreements that effectively converted the interest rate
obligation on this debt to a fixed rate of 7.71%.

120. The amount outstanding as at March 31, 2002, in legacy currency is
Netherlands guilders 400,000,000. The Netherlands guilders are converted to
Euro using conversion rate of one Euro equals: 2.20371 Netherlands guilders
in accordance with Council Regulation (EU) No. 2866/98. In addition, the
Province entered into interest rate agreements that effectively converted
the interest rate obligation on this debt to a fixed rate of 9.98%

121. The amount outstanding as at March 31, 2002, in legacy currency is French
franc 3,000,000,000. The French franc is converted to Euro using conversion
rate of one Euro equals: 6.55957 French francs in accordance with Council
Regulation (EU) No. 2866/98. In addition, the Province entered into
interest rate agreements that effectively converted the interest rate
obligation on this debt to a fixed rate of 6.6%.

122. Debt issued for investment purposes is comprised of notes payable to
Ontario Electricity Financial Corporation as a result of a debt for equity
swap between the Province and its two wholly-owned subsidiaries, Ontario
Power Generation Inc. and Hydro One Inc. The debt matures in three equal
installment on March 31, 2039, 2040 and 2041 and bears interest at 5.85 per
cent payable monthly.

123. In addition, the Province has advanced to OEFC an overnight loan in the
amount of $247,713,500 as of March 31, 2002.

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1
IV. CONTINGENT LIABILITIES - OBLIGATIONS GUARANTEED BY
THE PROVINCE OF ONTARIO

As at March 31, 2002

LOANS GUARANTEED
--------------------------------------------------- ---------------- ----------------- -------------------- ----------------
Outstanding
Year of Issue Rate of Interest March 31, 2002 References
--------------------------------------------------- ---------------- ----------------- -------------------- ----------------
% $

MINISTRY OF AGRICULTURE, FOOD AND RURAL AFFAIRS

Commodity Loan Guarantee Program 1994 Various 23,256,480
Feeder Cattle Loan Guarantee Program 1994 Various 11,911,797
FarmPlus Rural Loan Pool Program 1994 Various 7,831,285 (1)
Private Mortgage Guarantee Program 1994 Various 67,000
--------------------
--------------------

TOTAL MINISTRY OF AGRICULTURE, FOOD AND RURAL AFFAIRS 43,066,562
--------------------
--------------------

MINISTRY OF COMMUNITY AND SOCIAL SERVICES

Ontario College of Social Workers and
Social Service Workers 1999 Prime - 0.6 3,100,000 (2)
--------------------
--------------------

TOTAL MINISTRY OF COMMUNITY AND SOCIAL SERVICES 3,100,000
--------------------

MINISTRY OF ECONOMIC DEVELOPMENT AND TRADE

The Development Corporations Act
Total guarantees re various companies Various Prime+1 3,639,000
Ontario Aerospace Corporation 1995 N/A 2,480,000 (3)
Youth Entrepreneurs Program 2001-2002 Prime + 1 190,321
Young Entrepreneurs Program 1997-2001 Prime+2 192,330 (4)
--------------------
--------------------

TOTAL MINISTRY OF ECONOMIC DEVELOPMENT AND TRADE 6,501,651
--------------------
--------------------

MANAGEMENT BOARD SECRETARIAT

Mortgage Guarantees Dissolution of
Ontario Land Corporation 1971-1976 N/A 96,016 (5)
--------------------
--------------------
TOTAL MANAGEMENT BOARD SECRETARIAT 96,016
--------------------

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1
IV. CONTINGENT LIABILITIES - OBLIGATIONS GUARANTEED BY
THE PROVINCE OF ONTARIO-- Continued

As at March 31, 2002

LOANS GUARANTEED
--------------------------------------------------- ---------------- ----------------- -------------------- ----------------
--------------------------------------------------- ---------------- ----------------- -------------------- ----------------
Outstanding
Year of Issue Rate of Interest March 31, 2002 References
--------------------------------------------------- ---------------- ----------------- -------------------- ----------------
-------------------------------------------------------------------- ----------------- -------------------- ----------------
% $

MINISTRY OF MUNICIPAL AFFAIRS AND HOUSING

Ontario Housing Corporation "Homes Now"
Mortgage Financing Program 1989 Various 166,127,703 (6)
--------------------
--------------------
TOTAL MINISTRY OF MUNICIPAL AFFAIRS AND HOUSING 166,127,703
--------------------

MINISTRY OF NATURAL RESOURCES

Freshwater Fish Marketing Corporation 1969 7.14 1,000,000
--------------------
--------------------
TOTAL MINISTRY OF NATURAL RESOURCES 1,000,000
--------------------

MINISTRY OF TOURISM, CULTURE AND RECREATION
Tourism Redevelopment Guarantees Various Prime+1 250,000
--------------------
--------------------
TOTAL MINISTRY OF TOURISM, CULTURE AND RECREATION 250,000
--------------------

MINISTRY OF TRAINING, COLLEGES AND UNIVERSITIES

Ontario Student Loan Plan:
Class "A" Various Prime 667,771,891
Class "B" Various Prime+1 618,727,163
Class "C" Various Prime+1 1,144,615,346
--------------------
--------------------
TOTAL MINISTRY OF TRAINING, COLLEGES AND UNIVERSITIES 2,431,114,400
--------------------

TOTAL LOANS GUARANTEED 2,651,256,332
====================

OTHER

MINISTRY OF FINANCE

GO Transit Refinancing (TATOA) 1994 N/A 446,929,119 (7)
Ontario Municipal Improvement Corporation 1991 N/A 79,021,000 (8)
--------------------
--------------------

TOTAL MINISTRY OF FINANCE 525,950,119
--------------------
--------------------

TOTAL OTHER 525,950,119
--------------------
--------------------

TOTAL CONTINGENT LIABILITIES 3,177,206,451
====================

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1
IV. CONTINGENT LIABILITIES - OBLIGATIONS GUARANTEED BY
THE PROVINCE OF ONTARIO-- Continued

As at March 31, 2002

References:

1. The Province's maximum liability for the program is $50,000,000.

2. Amount represents loan guarantee for the Ontario College of Social Workers
and Social Service Workers from the Royal Bank of Canada up to $3,100,000
for a period ending December 31, 2006.

3. Guarantee required only in event of default by aircraft purchaser and if
sale of repossessed aircraft does not fully cover the sales financing
liability.

4. The Province guarantees 85% of both interest and principal of the
outstanding loan balance of $ 226,271.

5. The Ministry of Finance assumed the contingent liability arising from the
Mortgage Guaranty Fund of the Ontario Land Corporation, which was dissolved
on March 31, 1987.

6. Loans totaling $1,323 million taken by OHC for "Homes Now" from the Federal
Government's CPP allotment have been guaranteed by the Province. Since
1993, these loans have been refinanced from the private sector and funds
advanced to the Ministry of Finance. The total amount debentured to the
Province as at March 31, 2002 was $1,157 million which has been reduced
from the guarantee.

7. The Province has entered into a sale and conditional sale-back arrangement
of GO Transit with Asset Finance Bermuda Limited. The deal provided the
Province with about $431 million in the initial fiscal year 1993-94 with an
option of additional borrowing and to repay in year 2006. GO Transit will
maintain control over its assets and operations and provision will be made
within twelve years to buy back the asset.

8. This debt was originally borrowed by Ontario Municipal Improvement
Corporation ("OMIC") from the Canada Pension Plan Investment Fund. In
accordance with the Capital Investment Plan Act, 1993 OMIC ceased to exist
and its assets and liabilities were transferred to the Ontario Financing
Authority ("OFA").

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

V. CLAIMS AGAINST THE CROWN

As at March 31, 2002

The following are claims arising from legal action either in progress or
threatened against the Crown in respect of breach of contract, damages to
persons and property and like items. The amounts claimed have not been
specified, but in each case are expected to exceed $50 million:

1. Dudley Abbot et al. (preferred shareholders of Crown Trust).

2. The Chippewas of Sarnia, the Chippewas of Kettle Point et al. v. Ontario,
Polysar Hydrocarbons Limited et al.

3. Roy Michano et al., for themselves and on behalf of the members of the Pic
Heron Bay, Pays Plat, Rocky Bay, Whitesand, Pic Mobert, Red Rock, Sand
Point and Long Lake No. 58 Bands of Indians.

4. Clifford Meness et al., for themselves and all other members of the
Algonquins of Golden Lake Band of Indians.

5. Roger Southwind on behalf of the Lac Seul Indian Band.

6. Theriault in respect of mining leases to Hemlo Gold Mines.

7. Moose Factory First Nation et al. v. Spruce Falls Power and Paper Company
Limited.

8. New Post First Nation et al. v. Spruce Falls Power and Paper Company
Limited.

9. Beaver House First Nation v. HMQ.

10. Apotex Inc. and ACIC Limited v. Burroughs Wellcome Inc. and Attorney
General of Ontario and Ministry of Health.

11. The Chippewas of Saugeen and Nawash First Nations regarding Bruce
Peninsula.

12. Canadian Agra Corporation et al. v. Ontario Hydro, Ontario Energy
Corporation, HMQ, Minister of Energy.

13. Missanabie Cree First Nation v. Ontario and Canada.

14. Six Nations of the Grand River Band.

15. Mishkeegogamang First Nation and seventeen others.

16. Nevada Depot Inc. v. HMQ.

17. Michael McCarthy et al v. Red Cross et al.

18. Chiefs of Ontario v. HMQ.

19 Wesley Big George on behalf of seven Lake of the Woods First Nations v.
HMQ.

20. Wikwemikong Indian Band Re: aboriginal title in islands in Lake Huron and
Georgian Bay.

21. Chippewas of Sarnia Band re: aboriginal title in large tract in City of
Sarnia.

22. Nash et al. v. HMQRO and Brian Cass.

23. Doris et al. v. HMQ as represented by the Minister of Health (successor to
the Ontario Association of Radiologists action).

24. Mary Lou LaPratte, Roland LaPratte, Sheila Horrell, Arthur Horrell et al.
(proposed class proceeding).

25. Anderlis Leasing Enterprises et al.

26. Northern Diamond Gaming Services Limited and Diamond Gaming Services Inc.
et al.

27. 1191067 Ontario Inc., Silvo Di Gregorio and Tom Jones.

28. Monaghan, John Richard v. HMQ, the Attorney General and the Solicitor
General together with the OPP.

29. Alberto Docouto v. HMQ and MAG.

30. Temagami First Nation and Teme-Augoma Anishnabai re: title to large tract
of Crown land in Northern Ontario.

31. Mississauga of Alderville, Beausoleil, Chippewas of Georgia Island,
Mnjikaning (Rama), Curve Lake Hiawatha and Scugog Island First Nation.

32. Alberto Docouto v. HMQ and MAG.

33. First Class Casinos and Mr. Casino Inc. v. HMQ.

34. Jeevaratnam et al. v. Attorney General of Ontario, Director of Income
Maintenance (MCSS), Municipality of Metropolitan Toronto and the Regional
Municipality of Ottawa Carleton.

35. Somaskantharanjan et al. v. Attorney General of Ontario, Ministry of
Community and Social Services, Director of Ontario Works, Director of
Ontario Disability Support Program, the City of Toronto.

36. Robyn Wynberg et al v. HMQ.

37. Simsta Art Creations, Simona Stanculescu v. Office of the Public Trustee.

38. Jameel Mohammed v. Justice of the Peace Lavender et al.

39. Vance Hamilton Egglestone v. HMQ and Elliott Thompson Barker.

40. Arnold Guettler, Neo-Form Corporation and Neo-Form North America
Corporation v. HMQ et al.

41. Big Grassy (Mishkosiimiiniiziibing) First Nation and Ojibways of Onigaming
First Nations adjacent to the Lake of the Woods and Winnipeg River area who
are signatories to Treaty 3 and who are seeking damages on account of
flooding that occurred 1887 - 1892.

PUBLIC ACCOUNTS, 2001-2002 - VOLUME 1

V. CLAIMS AGAINST THE CROWN - Continued

As at March 31, 2002

42. Wauzhushk Onigum First Nation and Ochiichagwe'babig o'ining First Nation
and Washagamis Bay First Nations.

43. Walpole Island First Nations re: aboriginal Title to certain parts of S.
Western Ontario use of land and compensation.

44. Brett, L Brenda and Wells, C. Thomas v. HMQ.

45. Owen Mitchell v. HMQ and National Bank v. HMQ.

46. Timothy NATYSHAK v. HMQ et al.

47. The Begetikong Anishnabe First Nation (aka the Ojibways of Pic River) Chief
Roy Michano, Councillor Duncan Michano and Councillor Arthur H. Fisher,
aboriginal title to a large tract of land on the northeastern shore of Lake
Superior.

48. Whitesand First Nation Annuity Claim, Plaintiff seeking declaration that
increased annuity payable pursuant to Robinson-Superior Treaty 1850 has not
been paid.

49. Red Rock First Nation Annuity Claim, Plaintiff seeking declaration that
increased annuity payable pursuant to Robinson-Superior Treaty 1850 has not
been paid.

50. Moose Deer Point First Nation, Statement of claim for compensation for
breach of fiduciary obligation and a declaration that the plaintiffs have
existing treaty rights as set out in the address of Samuel Peters Jarvis in
1837,

51. R. Shawn A. Cantlon v. HMQ.

52. Anne and Alexander Larcade v. HMQ.

53. Pearson v. Inco Ltd., Ministry of the Environment etc.

54. Antonio Fracalanza v. HMQ.

55. Ayok, Chol v. York University.

56. Frank Defazio, et al v. HMQRO, Toronto Transit Commission, Pinchen
Environmental Consultants, et al.

57. Dumoulin v. Ontario Realty Corporation and HMQ.

58. CUPE v. Attorney General of Ontario.

59. Hamilton Kilty Hockey Club Inc. v.Ontario.

60. Tobasonakwut Kinew v. Canada and Ontario.

61. Attawapiskat First Nation v. HMQ, HMQRO re: Claim for damages as a result
of contamination of lands, groundwater and air.

62. Adrian, et al v. Canada and Ontario.

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