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Kathleen Wynne, right, reacts to a standing ovation next to Ontario Lt.-Gov. David Onley after being officially sworn in as 25th Ontario Premier at Queen's Park in Toronto on Tuesday, June 24, 2014.
Kathleen Wynne, right, reacts to a standing ovation next to Ontario Lt.-Gov. David Onley after being officially sworn in as 25th Ontario Premier at Queen's Park in Toronto on Tuesday, June 24, 2014.
(NATHAN DENETTE/THE CANADIAN PRESS)

CHRISTOPHER RAGAN

Only higher taxes will cure Ontario’s fiscal ills

Ontario’s Premier Kathleen Wynne has a majority mandate and four years to make some serious, difficult decisions. One of her biggest challenges will be to balance her government’s books, but doing this sensibly requires understanding the nature of Ontario’s fiscal problem.

Ontario’s budget deficit is by far the largest of all the provinces, forecast to be about $12.5-billion this fiscal year. As a share of provincial gross domestic product (GDP), it is 1.7 per cent. This is considerably smaller than Ottawa’s deficit back in the late 1980s and early 1990s, but it will still require serious effort by Ms. Wynne’s government.