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TORONTO – Ontario’s Liberal government will outline a plan to eliminate its deficit and stem the growth of its massive debt in today’s provincial budget, the ninth in a row to be awash in red ink.
Low oil prices and a weaker loonie have helped Ontario lead the country in economic growth, but the province has the largest debt of any sub-national government in the world.
Premier Kathleen Wynne insists the $7.5-billion deficit will be eliminated by 2017-18 as promised, something credit rating agencies will be watching very closely.
Mike Moffatt of the Ivey Business School expects the 2016-17 deficit will be slightly lower than last year’s budget forecast of $4.8 billion, and says it’s important for the government to show bond markets it has a credible plan to get to balance.
Moffatt predicts Ontario’s debt-to-GDP ratio of almost 40 per cent will likely stay relatively flat, and he expects the net debt will crash through the psychological $300-billion mark in today’s budget.
Progressive Conservative Leader Patrick Brown says interest payments on Ontario’s debt are over $11 billion a year, and wants to see “immediate action” in the budget to reduce the debt.
