By MPP Toby Barrett
Last year Ontario became the first province in Canada to rack up over $300 billion in debt. Worse yet, there are plans to add more debt in the future with no plans to cut taxes.
Ontario is the most indebted sub-national government in the world with each Ontarian sharing in over $22,000 of this debt – a dubious distinction unlikely to change in the April 27 budget.
A Fraser Institute study finds the Ontario government, after nine consecutive deficits, plans to add $9 billion to the debt in 2017/18, and $9.1 billion the following year. And there’s no end in sight. The province’s own Financial Accountability Office estimates Ontario’s debt will continue growing, hitting $370 billion by 2020/21.
When you keep kicking the can down the road, the lack of fiscal discipline required to pay down unacceptably high levels of public debt – or out of control electricity costs – means the debt for future generations just gets bigger and bigger.
Recently, Quebec presented its third straight balanced budget, along with a plan to meaningfully shrink its provincial debt burden between now and 2021/22. This has allowed the province to begin reducing its burdensome taxes.
Tax relief is a needed benefit of fiscal prudence, especially considering Ontario’s high and uncompetitive personal income tax rates. When governments spend within their means, and rein in debt, they can lower the tax burden on their citizens.
The provincial treasury has reaped an increase in harmonized sales tax proceeds, an increase in personal income tax collections, more money from land transfer taxes and higher corporate revenues. In total that equates to a $2.4-billion subtraction from the private sector.
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.
We also have another problem. Ontario is borrowing at historically low interest rates. If rates were to rise above the government’s projections, interest payments would grow even faster. This would require further spending to service the provincial debt. Further tax hikes for Ontario families and businesses could be the result.
But what we’re seeing from this government is an inability to pay the bills, let alone fund priorities like health care, special-needs funding, support for seniors and education. As a result, we see more school closures, longer wait times for health care, higher taxes and less take-home pay.
For these reasons, we in Ontario’s Official Opposition have called upon the government to immediately begin paying down the province’s debt and include, in the 2017 Budget, a long-term plan to get the debt under control.
As Opposition, we don’t harbour any illusions that this Ontario government will commit to reducing Ontario’s debt. People need to be made aware of the amount of debt any government is assuming on their behalf. We need action to get it under control and to begin paying it down.
This government is mortgaging the future—Ontario’s future—of a generation that doesn’t even have a running start due to fiscal mismanagement. It’s not only our children but also our grandchildren and future generations who are going to be burdened with paying off government debt through ever-increasing taxes.
To paraphrase the famous quote from Ben Franklin – in today’s Ontario, nothing can be certain except death, debt and taxes.