Ontario’s debt-to-GDP ratio (a key measure of fiscal sustainability) has climbed from 26.6 per cent to 47.0 per cent over the past 13 years and is projected to grow larger as the province runs at least two more years of deficits in the ballpark of $30 billion.
The Government of Ontario spent $12.5 billion on government debt interest in 2020/21, up from the $10.0 billion 10 years ago. That amounts to $845 per person and 8.2 per cent of provincial revenue. Money spent on debt interest is money unavailable for key priorities such as health care, education and pro-growth tax relief. All else equal, the more the provincial government borrows, the higher these costs will become.
Finally, while we can’t blame the Ford government for the global pandemic that has sideswiped its governing agenda, even before the pandemic this government planned to run deficits until 2022/23. In other words, the Ford government didn’t recognize the urgency and importance of budget balance.
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