Ontario’s business advocate takes candid look at province’s $348 billion debt in latest report
(Milton, April 4, 2019) – Today, the Milton Chamber of Commerce (MCC) and the Ontario Chamber of Commerce (OCC) released their most recent report, Accounting for Ontario’s Debt, offering a thoughtful and balanced analysis of the province’s debt. Ontario’s debt currently amounts to approximately 41 percent of the provincial GDP or, when combined with the federal debt of $680 billion, represents a near 80 percent debt-to-GDP ratio for Ontarians. With talk of looming provincial debt top of mind, this timely report examines what Ontario’s debt means for the economy of today and tomorrow.
In a recent OCC survey, nearly 80 percent of respondent businesses stated they were concerned about the impact the provincial debt could have on Ontario’s economy. Managing the provincial debt has been a long-standing concern for the business community as Ontario’s fiscal health directly impacts the ability of business to remain competitive and capitalize on new opportunities.
“As the province heads into a time of economic uncertainty, coupled with the possibility of rising interest rates, we urge the government to focus on balancing continued investments in economic development with putting the province’s finances on steady footing,” said Rocco Rossi, President and CEO, Ontario Chamber of Commerce. “Paying down the debt should not be at the risk of long-term economic growth or needed investments in infrastructure and services that will have a high return on taxpayer dollars, helping to bolster industry and our economy for generations to come. Our message in advance of Budget 2019 is about balance: accounting for our province’s debt in a reasonable manner while focusing on key investments and competitive taxation is critical to a stronger Ontario and competing on the global stage.”
The report notes Ontario is in a unique situation when it comes to managing its debt. Ontario has the debt exposure of a national government yet does not have generous lending fundamentals afforded to the federal government. With a GDP of nearly $850 billion, the province accounts for nearly half of Canada’s GDP. This means Ontario cannot rely on the protection of the national government when embarking on investments which aim to drive economic growth and prosperity. That is why the MCC and the OCC have long called for investments in areas such as transit and transportation, broadband internet, health care, skills and education, and trade promotion. These key investments will help grow the economy and allow businesses to flourish, jobs to be created, and, ultimately, Ontario to be more competitive and prosperous.
“When discussing how to account for Ontario’s debt, our report calls on the public and government to have a frank conversation. Priority must be placed on understanding the opportunity costs stemming from deficit spending, tax increases and spending cuts. With that in mind, we ask that the government prioritize good debt maintenance by running an efficient government while also investing in growth and development,” says Scott McCammon, President & CEO of the MCC. “One thing is certain: government decisions in Budget 2019 regarding Ontario’s debt will have profound effects on industry and communities for years to come.”
When it comes to addressing the debt and deficit, the MCC and OCC’s breakthrough report will act as a reference for debate and change as well as inform thoughtful, evidence-based policies with an eye towards fiscal balance and strategic spending. As the independent, voice of business, the MCC and the OCC will be working with leaders in government and the business community to help develop the necessary solutions in addressing Ontario’s debt challenge to drive forward a stronger and more competitive province.