Ontario is broke. Take a look at the debt clock http://fpm3.com/debtclock/ Those are billions ladies and gentleman with a capitol B. $276 billion is over a quarter of a trillion dollars. To put this in perspective the whole of Canada owes $617 billion. There is one big difference Canada’s budget will be balanced by fiscal 2015. Why you ask? Because if Harper wants to have a chance at beating the Shiny Pony, Justin the Anointed One, he will have to go into that election with a freshly balanced budget. So mark my words the federal budget will be balanced by 2015.
Back to Ontario. The big problem with Ontario is that the deficit at current spending levels is now structural. Do you remember last year the Drummond Report? This was a report sanctioned by then Premier Dad because Ontario’s credit rating was down graded by Moody’s. The economist Don Drummond and a 4 person panel did a complete audit of this provinces revenue and spending practices. It was released with great fanfare February 2012 and promptly thrown in the garbage can. Because it contained measures that this current provincial administration and its down town Toronto, latte sipping, limousine liberals, found completely unpalatable. Strangely enough I have read much of this report, (Get a life Nobody!!!) It contains things like scrapping all-day kindergarten or as I like to call it ‘state sponsored baby-sitting’. It also contained items such as changes to the health care system to allow more private health care options, on a pay as you go basis and recommendations to freeze public employee wages. On and on it went with recommendations some small some quite large. None of the measures recommended by Drummond were seriously considered as options for public policy. With the exception of one. Which was to renege on the original deal that brought slot machines into race tracks, which was a revenue sharing deal between the province and the horse racing industry, that has actually resulted in Ontario being the Kentucky of the North. Making the horse breeding and racing industry the largest employer in rural Ontario. How do a majority of rural Ontarians vote? Conservative of course. So the Ontario Liberals were told what medicine they had to take, but decided they would only take the medicine that affected the Conservatives of the province.
Some more perspective. Have you heard people talking about California being the debt ridden basket case of the United States? Its debt is around $100 billion more than Ontario but its population is 38 million vs. Ontario’s 13 million, so it has 3 times the population to draw on, to get its fiscal house in order. The following is part of a report from earlier this year from the Fraser Institute on this very subject:
On any comparative measure of bonded debt, Ontario fares much worse than California. Ontario’s debt is almost two-thirds larger than California’s even though California is much larger in both the size of its economy and its population. As a share of the economy, Ontario’s debt (38.6 per cent) is more than five times larger than California’s (7.7 per cent). Ontario’s per-capita debt ($17,921) is more than four-and-a-half times that of California ($3,833) and Ontario spends more than three times the amount of revenues on interest costs as California.
The other thing that worries me is that Kathleen Wynne is more of a socialist than McGuinty ever was. She is the epitomic downtown tax and spend type of socialist, that has never seen another person’s wallet that she doesn’t like. Have any of you heard her say “It’s time to tackle this debt/deficit situation?” I think the answer to that is quite evident by the fact that she caved in to the teachers and folded like a cheap suit to the LCBO workers with Smokey Thomas gloating in the background.
Obviously we are nowhere near where Greece is at right now. Our Debt to GDP ratio is at 38% a level not seen in Greece since 1984. But with this liberal government being propped up by the other socialists in town and no end in sight to the economic madness, we will continue to mortgage our children’s future for the foreseeable time to come……….
If it continues, we may well be ordering shots of ouzo to go with our feta and olives yet.