Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Quick now: What will be the fastest-rising cost for the Ontario government in the next three years?

Health care? K-12 education? Postsecondary education? Justice? Community services?

If you guessed any of these, you got it wrong. The fastest-rising program will be paying interest on the debt. It's going up by 5.5 per cent a year, 21/2 times faster than the health budget. It's now the third-largest item in the Ontario budget, after health care and education. Servicing the debt takes $10.6-billion a year, and heading higher.

Story continues below advertisement

Few people talk about debt. It isn't sexy, and it certainly won't win votes. In a little over two decades, from 1990-1991 to today, Ontario's debt-to-GDP ratio has tripled. If you believe the government's projections in Thursday's budget, between 2009-2010 and 2017-2018, the province will have added about $90-billion in debt. The total debt will be about $280-billion.

It doesn't matter, under these circumstances, which party forms the next government. The debt will still be there, large and growing, and very vulnerable to a hike in interest rates. Ontario, like other governments, can pile up more debt and get financing at low rates. When, inevitably, those rates rise, the burden of financing the debt will jump.

Thursday's budget, in this sense, was like the recent federal one. The media and opposition parties in Ottawa focused on all the changes. Fair enough, but the biggest, silent increase in the federal budget was money for seniors' pensions. That didn't get a whisper of attention, because the costs go up quietly.

So, too, the post-budget coverage and debate in Ontario swirled about new spending in some programs while restraint is exercised in others; whether the Liberals met the NDP's bargaining positions to get the budget passed and so remain in office; and whether the deficit will be going slightly up or down. But beneath the radar screen will be the buildup of debt, and the very real question about whether the province can manage it.

Ontario could finance its debt more easily if economic growth and accompanying government revenues grew at least as fast as debt-servicing costs. But economic growth is going to be about half the increase in costs of servicing the debt.

As the budget itself notes, Ontario's productivity lags behind that of the United States, as does business investment. The province's cost competitiveness has eroded. What the budget didn't mention is that energy costs are soaring. Programs also are rising for such items as seniors' drugs (up 5.4 per cent) and public-sector pensions (most public-sector employees have defined benefit plans, whereas private-sector employees don't). Then there are provincial arbitrators who pay no attention to a government's ability to pay, thereby driving up costs (see police, for example) by looking only at other settlements.

Premier Kathleen Wynne's government was in the tightest of spots, not a place from which to talk about difficult stuff such as the buildup of debt. Her Liberal government finds itself between Conservatives, who hound it with demands for an election, and New Democrats, who play an annual game of political extortion with their list of demands.

Story continues below advertisement

It's a terrible way to run a legislature, let alone a government, but that's the way the opposition parties wish to play their hands. So the Liberals seek what they call a "balanced approach" between Conservatives who want bigger cuts in public spending and New Democrats who instinctively want to spend lots more, with the money coming from the business sector and the better off.

In some areas, the Wynne government did the right thing: 5 per cent for community and long-term care but zero increases for hospitals; an opening of the door to special levies for transit improvements in the Greater Toronto Area; additional help for people in poverty; and continuing spending restraint across many departments. Of course, the government declared itself "absolutely committed" to balance the budget in five years, but nobody should believe fiscal projections that far down the road.

Who knows in five years, let alone one, which party or parties will govern Ontario, with all its challenges, including a debt burden that quietly grows without much attention, as Thursday's budget made clear for those who care?

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies