Don’t blame the economy for Ont.’s deficits and debt

Fraser Institute study cites government spending as the culprit.

February 18, 2016   by PLANT STAFF

spendingdeficitTORONTO — Government spending – not a weak economy and slumping revenues – is responsible for Ontario’s chronic budget deficits and massive debt, according to a study by the Fraser Institute.

The think-tank’s report, Spending is the Source of Ontario’s Deficit and Debt Problem, offers an example: between 2003-04 and 2015-16, provincial program spending increased by 71.6% to $120.9 billion from $70.4 billion. That’s faster growth than the economy as well as inflation and population growth combined.

The study shows program spending, restrained to the same rate as economic growth since 2003-04, would have resulted in a $10.7 billion surplus this fiscal year rather than a $7.5 billion deficit. Had program spending simply kept pace with inflation and population growth, the surplus would be even larger.

The Fraser Institute points out Ontario has run 10 budget deficits in the past 13 years and the province’s net debt (projected to reach $298 billion in 2015-16) has more than doubled since 2003/04.

“As policymakers at Queen’s Park prepare to table this year’s provincial budget, they should recognize the source of today’s deficit and debt problem – government spending,” said Ben Eisen, associate director of the Ontario Prosperity Initiative at the Fraser Institute and a co-author of the report.

Click here for the report.

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2 Comments » for Don’t blame the economy for Ont.’s deficits and debt
  1. Carole Rier says:

    The gov’t wonders why people aren’t saving enough for retirement, but they keep running deficits and increasing our taxes. It is time to freeze all gov’t wages for the next few years and spend only what is necessary. There is so much waste by all levels of gov’t. It is true the next generation will be smaller and can’t handle the debt.

  2. denis fournier says:

    The gov’t should understand that the provincial budget should be balance as our household. Cost saving should start by the gov’t as we try to teach our kids how to spend money. if you don’t have it then you can’t spend it. People should also realize that the more increase in salary the more we pay for all social network. It seems like everyone wants everyone else to cut but not looking in the mirror. A lot of people work hard for their money ,when they see other people paid a lot more for a lot less work. We can complain about all of things, Sometimes we just need look at how this country was built by hard work and integrity.

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