In fiscal year 2019-20, the Ontario provincial government will spend almost $13 billion on debt interest payments, according to the Fraser Institute.
And Ontarians shoulder not only provincial debt but their proportional share of federal debt. The interest costs on this combined debt equal $1,550 per Ontarian.
“Since the recession of 2008-09, Ontario’s provincial debt has more than doubled, increasing the interest costs paid by Ontario’s taxpayers,” said Jake Fuss, Fraser Institute economist and coauthor of Interest Costs and their Growing Burden on Canadians.
For example, this year the Ontario government will spend a projected $12.9 billion on interest payments on the provincial debt.
Consequently, interest payments on the provincial debt will consume 8.3 per cent of provincial revenues in 2019-20, despite historically low interest rates.
“Government interest payments divert resources away from health care, education and social services, and limit the ability of governments to provide tax relief,” Fuss said.
“In its upcoming budget, the Ontario government can address interest costs by moving purposefully towards a balanced budget by better controlling provincial spending.”
Fraser Institute is an independent, non-partisan Canadian public policy think-tank.