By MPP Toby Barrett
To The Haldimand Press
April 11 marks the Doug Ford government’s first budget.
Looming over this process is not only a large structural deficit, but also a massive public debt of more than one-third of a trillion dollars – that is 346 with nine zeros behind it.
Ontario is the most indebted sub-national government on the planet.
Interest payments on Ontario’s debt are the fourth largest item in the budget – after health care, education, and social services. Every dollar spent on interest, never mind the debt itself, means one less dollar going to our hospitals, schools, and vital infrastructure. Interest rates began to rise in 2017/18 and there is an increasing risk that the government will have considerably less flexibility to provide these key public services.
The Bank of Canada raised its key lending rate five times between April 1, 2017, and October 24, 2018. When the province refinances debt at a higher interest rate than that paid on maturing debt, then the average interest expense will rise. This means more money will go toward interest expense, therefore increasing the annual deficit and ultimately, the debt.