TORONTO, ON--(Marketwired - April 27, 2017) - The Ontario government is adding billions to the provincial debt with its 2017 budget, released today, and has failed to respond adequately to the daunting fiscal challenges still facing the province, according to The Fraser Institute.
"The government may have finally presented a balanced operating budget after nine consecutive deficits, but it still plans to add billions more to the debt and the province's finances are still in trouble," said Ben Eisen, director of provincial prosperity studies at the Fraser Institute.
Today's budget calls for $34 billion in new debt over the next three years.
"A return to operating budget balance is, of course, welcome news for the most indebted subnational government in the world, but it doesn't undo all the damage that's been done to the province's finances over the past decade."
Crucially, the 2017 budget does not present a detailed plan to significantly lower the province's near historically high debt-to-GDP ratio, which is projected to be 37.5 percent this year.
The debt-to-GDP ratio is used to measure the sustainability of a jurisdiction's debt burden.
While the government has committed to lowering it back to its pre-recession level of 27 per cent, it has not yet provided an adequate detailed plan to make progress towards this goal in the years ahead.
In fact, the government's medium term fiscal plan shows the debt-to-GDP ratio falling by just 0.6 percentage points over the next three years.
What's more, as the provincial government keeps adding more debt, Ontarians will have to pay more and more interest. In 2017/18, interest on Ontario's debt is expected to cost taxpayers a staggering $11.6 billion.
"The province continues to be buried under a mountain of debt, and the money Ontarians must pay to service that growing debt is money not being spent on health care, education, tax relief and other important priorities."
MEDIA CONTACT:
Ben Eisen, Director, Provincial Prosperity Studies, Fraser Institute
To arrange media interviews or for more information, please contact:
Bryn Weese, Media Relations Specialist
Fraser Institute
604-688-0221 ext. 589
bryn.weese@fraserinstitute.org
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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org
Contact Information:
MEDIA CONTACT:
To arrange media interviews or for more information, please contact:
Bryn Weese
Media Relations Specialist
Fraser Institute
604-688-0221 ext. 589
bryn.weese@fraserinstitute.org