There’s an old saying about the chickens coming home to roost that applies to this year’s provincial books.
A few days after the budget was tabled, two credit rating agencies issued warnings that the the government’s fiscal plans will hurt Ontario’s credit reputation in the long term. Moody’s Investor Service and DBRS – both independent agencies that assess risk tolerance associated with debt – issued the warning. If this were to happen, interest repayment costs would rise higher.
As recently as November, the Ontario government had indicated the economy was on track and the budget balanced. Now, on the eve of an election, we’re told the budget will run even higher in the red, and the deficit will continue until 2025.
It turns out this year’s deficit will be $11.7 billion, not the $6.7 billion reported, contributing to an Ontario total debt of $346 billion, not $325 billion.
Spending and taxes are both up, because of a suite of expensive proposals. Total government spending is up $9 billion from last year, totalling $158.5 billion this year.
While hard-working Ontarians are doing their best to make ends meet, we have a government budget focused on the coming election— regardless of cost. This year’s spending will come in at $11,167 for each one of us in the province.
I was first elected in 1995, and in my 23 years as a MPP, I have never seen a pre-election budget quite like this one. It would appear those in charge are working tirelessly for one thing, and one thing only: their re-election.
A $346 billion debt is foolhardy and unsustainable.
Every month the government spends more than $1 billion to service its debt. This year Ontarians will pay more than $12 billion in interest. The budget for debt interest is more than any other ministry, with the exception of education, health and social services.
And just after the budget came down we heard this from Mississauga-Streetsville MPP Bob Delaney: “We have tripled (the debt) and we’re proud of it, because we can afford it. It’s the responsible thing to do. It’s the correct thing to do, it’s what people have asked us to do and I would do it again and I would do it proudly.”
Such wildly extravagant spending has made Ontario the most indebted province or state on the planet. Not only will the $346 billion debt be piled on this generation, our grandchildren will be hard taxed to pay for it.
This year’s budget confirms government feels voters can be bought with their own money. But there is a big problem with such profligate spending promises – those in charge are writing cheques they know will bounce.
We already see the administration of massive tax hikes to pay for this spending spree. These tax hikes will hit 1.8 million hard working people and over 20,000 businesses. They are designed to raise $2 billion in new revenue over the next three years.
The people of Ontario have a choice: wasting billions on political self-interests, raising taxes, making life unaffordable and driving jobs out of Ontario, or respecting tax dollars, standing up for the little guy and gal, and making Ontario open for business again.
Toby Barrett is the MPP for Haldimand-Norfolk