PREPARED BY: Finance

DATE: November 10, 2025

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Executive Summary

Mandatory and Ontario Seniors Dental Care Program (OSDCP)

Mandatory Programs and Ontario Seniors Dental Programs have a December 31, 2025 year end.

The third quarter ended September 30, 2025, both the Mandatory and Seniors Dental Programs indicates lower than budgeted expenditures:

This is due to lower than budgeted spending on:

Item	Amount
Salaries and Benefits	$906
Office and Administration Expenses	25
Supplies - Program and Corporate	381
Purchased Services - Programs and Corporate	58
Information Technology	46
Building Maintenance	37
Occupancy Cost (rent)	19
Insurance	13
Other Expenses	25
Offset Revenue	43
Total	$1,553

There was an overspent on Legal and Professional Fees of $87K

Analysis of Key Variances

The primary reason for the underbudget expenditures is within:

1. The Salaries and Benefits Expense and is due to:
   1. Several vacancies due to maternity leaves, sick leaves, resignations, retirements and terminations.
   2. Vacancies take long lead times to fill: 2-3 months on average
   3. When vacancies are filled from within, new vacancies are often triggered.
   4. Contract positions are difficult to fill as permanent positions are preferred impacting maternity leave and sick leave replacements.
   5. The budget contemplates all positions at the maximum rate for conservatism purposes. Most vacant positions being filled with either contract or permanent employees that are starting below the maximum rate.
2. Supplies – Program and corporate and is due to:
   1. A timing issue with the mosquito trapping and larvicide program which is exclusively a seasonal based program. Most of the supplies for this program are used in the second half of the year. As a result, we anticipate that this budget will be fully spent by year end.
   2. For the OSDCP Clinical supplies spending is lower than budgeted due in part to a $15K credit received from the vendor. Also, purchases made a last fiscal year-end remained in stock through a portion of Q1-Q2 resulting in no additional spending during that period. However, spending ramped up in Q3 and will continue to increase in Q4 to ensure full utilization of the budget.

The forecast for the year indicates that total expenses will be: 

We anticipate that there will be no funds remaining to be returned to the Ministry at year end as forecasted net eligible expenditures as at December 31,2025 are expected to be at or above the Ministry of Health base funding of $17,916,832.

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Healthy Babies, Healthy Children:

This program has a March 31,2026 year-end.  At the end of September (Q2), expenses are $21K lower than budget, primarily due to lower than budgeted salaries and benefits and unused Professional Development – this will be utilized in the next quarter.

September 2025 YTD HBHC expenses, budget and variances

Expenses ($000)	Budget	Actual	Variance	Variance %
Total Expense	$ 1,546	$ 1,525	$ 21	1.34%

Management is consistently reviewing the funding provided and have developed plans to ensure that the budget will be fully spent by year end.

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2. Detailed Financial Report as of September 30, 2025

a. Mandatory Programs September 30, 2025 YTD

The budgeted net expenditures for Q3 are $18,861K versus actual net expenditures of $17,793K resulting in a total of $1,068K or 5.7% underspent.

Analysis of Key Variances

1. Salaries and Benefits - $386K or 3.2% Under Budget
   Vacancies due to unfilled or partially unfilled departures and mandatory leaves of absences. YTD, there have been several maternity and sick leaves resulting in vacancies.  Each vacancy can take up to 3 months to fill.
   
   The other major reason is that all roles were budgeted at the maximum rate. When departures or leaves are filled with either a full-time permanent position or a contract position, most do not begin with earnings at the maximum rate.
   
   One-time programs are typically staffed with contract positions which are very difficult to fill resulting in pulling permanent staff to fulfill program mandates.
2. Employee Benefits $295K or 8.1% Under Budget
   Employee benefits are below budget primarily due to the OMERS pension plan.
   
   OMERS was budgeted as a percentage of salaries.  Salaries were budgeted using  maximum salary rates, there were several leaves through the year, and contract replacement staff are not included in OMERS.  As a result, the actual pension costs were below the amounts budgeted.   
3. Professional Fees – Legal, Audit, and Consulting - $87K or 62.6% Over Budget
   Legal and professional fees have exceeded the budget due to an increased labour relations issues, the negotiation of the Leamington Lease Amending Agreement and legal fees required for Phase 1 of the Facility Renewal Project.
4. Supplies -Programs and Corporate - $313K or 42.1% Under Budget
   The variance is almost completely related to a timing issue with the mosquito trapping and larvicide program which is exclusively a seasonal based program. Most of the supplies for this program are used in the second half of the year. As a result, we anticipate that this budget will be fully spent by year-end.
5. Purchased Services – Programs and Corporate - $37K or 32.2% Over Budget
   The main reason for the variance is KI Pills expenses.  The funding ended March 31, 2025; however, expenses continued beyond that date due to Canada Post Strike and as a result many of the pills we did not mail as planned.
   
   Translation expenses exceeded budget as video conferencing is the preferred choice of communication, and it is more expensive than phone.

b. Ontario Seniors Dental Care Program (OSDCP) September 30, 2025 YTD

Analysis of Key Variances

1. Salaries - $159K or 14.1% Under Budget
   Salaries are under budget primarily due to unfilled vacancies and leaves of absence.  In addition, all roles are budgeted at the maximum rate. When departures or leaves are filled with either a full-time permanent position or a contract position most do not begin with earning the maximum rate.
2. Benefits - $66K or 19.3% Under Budget
   The main reason for the benefits being under budget is the OMERS pension plan. It is under budget as this cost is budgeted as a percentage of salary costs.
3. Clinical Supplies - $68K or 39.5% Under Budget
   Clinical supplies spending is lower than budgeted due in part to a $15K credit received from the vendor. Also, purchases made a last fiscal year-end remained in stock through a portion of Q1-Q2 resulting in no additional spending during that period.  However, spending ramped up in Q3 and will continue to increase in Q4 bringing the year-end expense more closely aligned with the budget.
4. Purchased Services $95K or 18.5%
   Given the demand for this program exceeding the capacity of the department and a strategy of outsourcing to third party dental offices has been implemented to lower the current wait list. Contracts with dental offices have been signed and will impact Q4. This expense line will be more closely in line with budget by year-end.
5. Utilities, Telephone, Security - $7k or 46.8% Under Budget
   This is caused mainly due to lower fees than budgeted in security expenses. 

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3. Year End Forecast

a. 2025 Mandatory Programs - Budget Forecast

Forecasted expenditures for the twelve months ended December 31, 2025, are $24,404K against an annual budget of $25,207K resulting in a forecasted underspend of $804K or 3.2%. The underspent amount is primarily due to Salaries and Benefits - vacancies, rates budgeted at maximum and utilizing permanent staff in one-time funded programs where not enough contract employees could be hired.

b. Ontario Senior Dental Care Program (OSDCP) 2025 Forecast

Forecasted expenditures for the twelve months ended December 31, 2025, are $2,824K compared to an annual budget (Ministry of Health approved allocation) of $3,033K resulting in a forecasted underspend of $209K or 6.9%.  This is primarily due to lower than budgeted salaries, clinical supplies and purchased services partially offset by allocated costs of the Facility Renewal Project.