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.”
Despite the talk of painful austerity, Ontario’s recent budget continues to bleed red ink. Finance Minister Charles Sousa projects a deficit this year of $8.5 billion, and doesn’t predict an actual balancing of the books until 2017-18 fiscal year.
When the federal government faced a growing debt problem in the late 1980s, then Opposition finance critic Paul Martin was initially skeptical about cutting spending.
There was an aura of complacency in Queen’s Park as the Ontario government released its update on the state of provincial finances.
A new report on provincial debts and deficits by Moody's, the international credit rating agency, is another piercing reminder of Ontario's serious fiscal challenges.
Lost in the current flurry of Ontarios election campaign is the one key issue facing the province, and indeed all of Canada: Ontarios laggard economic performance is dragging down the national economy.
The economic news coming out of Ontario in recent days has been far from positive. The province's economic and fiscal position is weak and new analysis released by the Ministry of Finance suggests its economy will remain sluggish for the foreseeable future.
With the Ontario government expected to soon introduce a new budget and the province continuing to head towards its own fiscal cliff, Premier Kathleen Wynne has a chance to make a clean break from the fiscal mismanagement of her predecessor, former Ontario Premier Dalton McGuinty. To stem the tide of rising debt, Premier Wynne needs to initiate a radical re-think of current spending and put forth a credible plan to balance the budget in the short term. Lets hope she understands and embraces the need for change.