ONTARIO's DEBT-TO-GDP RATIO TO HIT 48.8%

 As expected, every budget in Canada this year has been covered in red ink. The pandemic has squeezed tax revenue while governments have boosted spending to combat the public health crisis and deep recession. But after a year of social distancing and the rollout of life saving vaccinations underway, governments should start planning for the recovery and developing plans to put their finances on the path to sustainability.

Ontario is one of the provinces facing the most severe fiscal pressures, with its debt-to-GDP ratio set to hit 48.8 per cent at the end of this year after having run deficits every year since 2008/09. But while the 2009 financial crisis and COVID-19 have dealt major setbacks to fiscal plans across the country, the level of debt accumulation in Ontario over the past decade has been the result of policy choices. To illustrate this choice, consider Quebec, which despite its long-standing debt issues has quietly turned around its government finances over the past decade relative to other provinces while Ontario’s fiscal situation has deteriorated.