Our vision: Managing the province’s finances responsibly for today and tomorrow.
Ontarians are concerned about the province’s debt and the effects it will have on future generations. Any government focused on the well-being of citizens must take these concerns seriously.
In order to address the problems, we must address the root causes. Program spending didn’t cause Ontario’s debt; we have the lowest per-capita program spending of any province in confederation, 20% below that of the rest of Canada. Neither did Ontario’s tax system, as our per-capita tax revenue is the third highest in Canada.
The majority of Ontario’s debt is the result of the past two recessions. Ontario added 35.6% to the debt-to-GDP ratio in the few years after the 1990 recession and in the wake of the 2007-2008 financial crisis. For the past 35 years, during good economic times—apart from those recessions—Ontario’s debt-to-GDP ratio has actually gone down modestly.
We need to ensure our province can fiscally weather recessions. We also need to make sure that we’re getting fair value for our natural resources, such as water, and getting our fair share from the federal government.
Our 4-point plan:
- Commit to lowering the debt-to-GDP ratio, year-after-year, in good economic times (times other than recessions and recovery from recessions), to reduce Ontario’s debt burden on future generations.
- Conduct a fee and resource royalty review, to ensure the province is receiving fair value for its natural resources, such as freshwater.
- Work with the federal government to ensure that Ontario is receiving its fair share of federal transfers.
- We need to plan in advance for the next recession or major economic downturn—we don’t know when it will be, but we know that it will happen eventually.
Almost all of Ontario’s debt is due to two recessions: The recession of 1990, and the financial crisis of 2007-2008. To limit the fiscal damage from the next recession, whenever it occurs, we will immediately convene a panel that will proactively develop a plan to combat the next recession. That panel will examine ways to limit the fiscal damage caused by a future recession and the feasibility of alternative tools to combat and finance recessions, such as bond-financed equity purchases, an idea pioneered by UCLA economist Roger Farmer.