Hamilton Chamber of Commerce Sounding Alarm on Ontario’s Debt and Deficit
· by Marily Butkovic
New report provides straightforward analysis of Ontario’s fiscal situation
Hamilton, October 29th, 2014: Ontarians should be very concerned about the province’s fiscal situation, according to a new report from the Ontario Chamber of Commerce and the Hamilton Chamber of Commerce.
The report, “How Bad Is It? What Do We Do About It?” provides a straightforward account of Ontario’s current fiscal situation. It finds that while Ontario’s fiscal situation is better than that of many other countries facing fiscal problems, the province is likely to reach a state of crisis unless it cuts spending and changes the ways it does business.
The report finds that Ontario’s history of spending is unsustainable. In only seven of the past 25 years has the government balanced its books or achieved a surplus. As a result, the province has been digging itself deeper and deeper into the red. By 2016-17, interest payments to service the provincial debt are projected to consume ten cents of every dollar the government spends.
A sustained state of poor fiscal health can hurt business confidence and makes the province a less attractive place to invest. According to a recent Ontario Chamber of Commerce survey, 93 percent of businesses in the province believe that eliminating the deficit should be a top priority for government.
“The future of Hamilton and Ontario’s economy is heavily contingent upon the decisions the current government has to undertake to manage debt and spiraling interest payments.” says Keanin Loomis, President & CEO of the Hamilton Chamber of Commerce. “These economic challenges are exacerbated by an aging population, declining labour productivity and infrastructure deficit that will become even more difficult to deal with”.
The report also offers six approaches (e.g.: Alternate Service Delivery and Asset Recycling) that the government can take to reduce its spending and move along a more fiscally sustainable path.
“By adopting models of success from other jurisdictions, we can move the province toward fiscal sustainability, while preserving valuable government programs and services,” adds Allan O’Dette, President & CEO of the Ontario Chamber of Commerce.
“While the business community is concerned with Ontario’s debt levels, we are still supportive of the business case for investing in public infrastructure proposals like the Big Move as an example of productive debt” added Loomis. “The Conference board of Canada and Metrolinx have projected significant economic returns over investment for these projects to our provincial GDP and productivity”.
Read the full report here.
Download Debt Report – Hamilton in PDF format here.
Fast Facts:
• Over the previous fiscal year, the Government of Ontario spent $10.5 billion more than it collected in revenue. This will increase to $12.5 billion in 2014-15. To attain its deficit-elimination goal of 2017-18, the government must reduce the deficit by over $4 billion per year for the next three years.
• For 18 of the past 25 years, governments in Ontario have run a budget deficit.
• Ontario’s net debt in 2013-14 was $267.2 billion. The cost of servicing this debt was $10.6 billion, or $29 million per day.
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For more information, contact:
Huzaifa Saeed Policy & Research Analyst, Hamilton Chamber of Commerce
E: h.saeed@hamiltonchamber.ca T: 905-522-1151 ext: 230 C: 905-220-3030
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