Ontario’s debt burden just keeps on growing

Jeffery Simpson, Published Thursday, May. 02 2013

Quick now: What will be the fastest-rising cost for the Ontario government in the next three years?

Health care? K-12 education? Postsecondary education? Justice? Community services?

If you guessed any of these, you got it wrong. The fastest-rising program will be paying interest on the debt. It’s going up by 5.5 per cent a year, 21/2 times faster than the health

budget. It’s now the third-largest item in the Ontario budget, after health care and education. Servicing the debt takes $10.6-billion a year, and heading higher.

Few people talk about debt. It isn’t sexy, and it certainly won’t win votes. In a little over two decades, from 1990-1991 to today, Ontario’s debt-to-GDP ratio has tripled. If you believe the government’s projections in Thursday’s budget, between 2009-2010 and 2017-2018, the province will have added about $90-billion in debt. The total debt will be about $280-billion.

It doesn’t matter, under these circumstances, which party forms the next government. The debt will still be there, large and growing, and very vulnerable to a hike in interest rates. Ontario, like other governments, can pile up more debt and get financing at low rates. When, inevitably, those rates rise, the burden of financing the debt will jump….To Read More…