When you dig a hole of debt – stop digging

By MPP Toby Barrett

Ontario is in trouble. Not only is the provincial economy weaker than expected but the Ontario government now seems to be giving up completely on wasteful spending and reduction of our deficit and debt.

In the past few years, Ontario has lost its way. We have become a province of bigger government and smaller dreams – a have-not province. While our economy has limped along, government spending and debt have raced ahead.

Ontario is in the middle of one of the worst jobs and debt crisis in our history, and we need to take immediate action if we are to climb back out of this hole. We have to stop digging and certainly go beyond tinkering around the edges. But it seems this present government does not understand the magnitude of the problem it faces, let alone what is required to fix it.

Each morning in Ontario, 600,000 employable people wake up without a job. That’s equal to the population of Hamilton, plus that of Haldimand-Norfolk. The majority of students who graduate today won’t find work in their field, and our current debt ratio will bankrupt our health care and education systems if changes to protect these services aren’t made.

For close to seven years, Ontario’s unemployment rate has been above the national average. Statistics Canada reveals Ontario’s jobless rate climbed to 7.4 per cent this past October – while Canada’s rate remained at 6.9 per cent. We lost another 16,000 factory jobs last month – adding to a monthly total of more than 39,000 jobs down the drain. And we now have to count the job losses announced this month at the Heinz facility in Leamington, and further loss with next month’s official closing of our local OPG Nanticoke.

Kick-starting job growth and addressing Ontario’s debt are not separate goals. They each rely on the other. We won’t reach our economic potential as long as businesses are over-taxed and over-regulated, or while investors remain leery of our high energy costs, structural deficits, and rapidly mounting debt.

And now the Wall Street Journal is writing about Ontario’s exploding debt. California is generally held up as an example of fiscal dysfunction in the wake of the financial crisis that swept the world five years ago. But bond rater Moody’s Investor Service identifies Ontario’s situation as worse than
California’s. The bond-rating firm recently noted California’s debt burden is about 50 per cent of total revenues while Ontario’s debt is roughly 226 per cent of consolidated revenues.

According to the recently-released Fall Economic Statement, Ontario is spending $11.7 billion more this year than it is taking in. Instead of taking steps to curb this overspending, government now intends to ramp up spending even further, from $122.6 billion last year to $127.6 billion next year. Thisonly contributes to the province’s $272 billion long-term debt. The annual cost in servicing that debt comes in at $10.6 billion.

We can’t keep spending more and more every year, with no plan to pay for it. No household or business could operate like that.

Ontario can’t balance the books with out-of-control spending. Any resident of Ontario wouldn’t hesitate to address the problem if this was their personal finances. Why should the government be any different?