Ontario’s Financial Accountability Officer (FAO) released an assessment of Ontario’s debt and the risks it poses. Here’s a link to it. I was shocked to learn that Ontario’s debt reached $300 billion at the end of July, and it’s getting worse.
By 2020, Ontario’s debt will be $350 billion – the highest of all Canadian provinces, and the highest sub-sovereign debt in the world.
Interest payments on Ontario’s debt are the government’s third highest expenditure. This poses a serious problem. If interest rates go up even 1%, our interest payments on the debt will rise to $350 million. This is more than the budgets of some Ministries, such as Labour and Aboriginal Affairs.
Debt isn’t invisible. We can see it in government cut backs to essential services and crumbling infrastructure.
Government revenues have been growing since 2003. But borrowing and spending have been rising much faster. The solution to this debt crisis is simple: introduce better management and reduce wasteful spending. But as long as the present Government is in power, I don’t think we’ll see an end to ballooning debt.