Ontario’s government is spending more than it takes in each year. This year will represent the province’s eighth consecutive budget deficit.
On Thursday, Finance Minister Charles Sousa will provide an update for Ontarians on the state of provincial government finances.
The Ontario government's strategy to eliminate the projected $8.5 billion deficit has largely hinged on hoping revenues will grow robustly and eventually catch up to spending increases. This is a risky strategy.
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The Ontario government has pledged to eliminate its budget deficit by 2017/18. However, the government’s recent record on fiscal issues casts doubt on whether it will meet this target.
The Ontario government has dug itself deep into debt and continues to spend more than the revenue it brings in each year.
Last week, Standard and Poor’s announced a downgrade to Ontario’s long-term credit rating, pointing to the province’s “very weak budgetary performance.”
Ontario’s 2015 budget, like those of years past, needed a concrete plan to get government finances on a sound footing. Yet again, the budget failed to deliver.
How governments manage their finances matters a great deal. Spend and borrow too much and the result is a spiral of increasing deficits that create ever higher debt. Then, ever-more tax dollars end up spent on debt interest—not on education, health care, administering provincial courts, or other areas in which provincial governments are involved.
There was an aura of complacency in Queen’s Park as the Ontario government released its update on the state of provincial finances.
We’ve seen this script before. Higher spending. Tax increases. Persistent deficits. Growing debt. Warnings from credit rating agencies. A government unwilling to make the tough choices to turn things around.