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Low interest rates brought us a Doug Ford government in Ontario, and they would have been responsible for an NDP or Liberal win as well.

One of many things that made the Ontario election so interesting was the way three such different major party platforms converged in financial recklessness. That’s low rates in action. They dull our sense of the consequences of irresponsible money management by allowing individuals and governments to spend beyond their means at low cost.

By not pushing governments to get control of their finances, we increase the chances that drastic actions will be needed in the future to cut spending. The longer we wait, the harder the hit will be to your personal finances. Taxes or user fees could go up, services could be reduced, jobs could be lost and opportunities for career and salary gains across the economy could be limited. If you think current economic conditions aren’t floating your boat, just wait.

The Liberals set the tone for this election in a March budget that broke a promise to have a balanced budget this year. Instead, the government announced programs for seniors, women and students that put the province into deficit.

The NDP offered an election platform that relied on targeted tax increases and deficit spending to fund programs like pharmacare, dental care, $12-a-day child care and grants instead of loans for post-secondary students. The Conservatives never bothered to provide a full accounting of their plans, which included a drop in hydro rates and gasoline taxes, a cut in corporate tax rates and a reduction in the middle-income tax rate. There’s also a plan to eliminate provincial income tax on people with a low income – this would replace a scheduled increase in the provincial minimum wage next year to $15 per hour from $14.

Some of the policies in the election campaign addressed real issues. A cut in corporate taxes could make Ontario more competitive at a time when U.S. rates for business have been falling, while anger at hydro costs in the province is something that unites people of all parties. In an economy that increasingly slots young workers into temporary jobs with no benefits, it makes sense for government to support public health by covering the cost of drugs and dental visits.

But in announcing policies like these, each party made the same mistake as many households in acting like cost is no object in living your life. In a low-rate world, it seems like you never have to say no.

There are plenty of zero-debt Canadians and some provincial governments that are living within their means. But there’s a bigger picture. While people seem stressed about their finances when asked in surveys and polls, their behaviour as spenders and voters shows they are not willing to cut back.

Meantime, it’s becoming increasingly urgent for people and governments to bring their spending in line with money coming in. Interest rates on both government and individual borrowing have increased in the past 12 months and will likely go higher. As debt-carrying costs move higher, additional strain is placed on household and government budgets.

Rates are rising because the economy’s doing well enough to generate concern about rising inflation. We’re getting closer to the peak of the current economic cycle, a point where people and governments are best positioned to take control of their finances. It will only get tougher when the economy inevitably starts to slow down.

Governments under financial stress tend to chop, not trim, spending. When the federal Liberals decided to attack a ballooning deficit in the mid-1990s, they made the largest federal spending cuts in this country’s history, including health care and education transfers to the provinces.

Our aversion to that kind of cutting was evident in the Ontario election campaign. Politicians in all parties sized up the public mood and presented platforms that ignored the most basic rule of personal finance – living within your means.

It’s time to snap out of it. We need governments that challenge our willingness to live in debt, not indulge it.

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