By Mark Milke and Charles Lamman, includes “The latest alarm bell has been sounded by the province's auditor general. In a newly released report that chronicles the Ontario government's growing indebtedness, Bonnie Lysyk listed a raft of statistics that demonstrates the problem.
… The auditor general warns of three consequences of Ontario's existing massive indebtedness: debt interest siphons away tax dollars from social programs (currently nine cents of every dollar collected by the government goes to paying interest on debt). More debt means a higher risk from interest rates when they rise. And the potential for a credit rating downgrade would further drive up borrowing costs. The danger of Ontario's indebtedness is real.
Consider that in 2013/14 interest on the provincial debt was $10.6 billion. According to the province's fall fiscal update, that was just over half of all provincial sales tax revenue paid by Ontarians last year ($20.5 billion). So Ontarians should know that when you pay your provincial sales tax at the till, half of it flutters away just to pay your provincial government's debt interest. To compare it to expenditures, that $10.6 billion in debt interest last year also exceeded the ministry of social services' entire budget ($10 billion) and equaled 45 per cent of the education ministry's spending ($23.6 billion). …”
Read the full article on: The Hamilton Spectator (Canada)