Ontario debt interest payments set to soar in 2023

Author: Jay Goldberg 2023/01/10

Toronto, ON: The Canadian Taxpayers Federation is sounding the alarm on soaring borrowing costs the Ford government is leaving for Ontario taxpayers.

“Years of deficits and several interest rate hikes from the Bank of Canada mean Ontario’s debt interest charges this year will be at least $2.4 billion higher than last year,” said CTF Ontario Director Jay Goldberg. “Because our politicians have been spending and borrowing like drunken sailors, billions of taxpayer dollars will be heading to Bay Street instead of staying on Main Street.”

For every one per cent interest rate hike implemented by the Bank of Canada, Ontario’s debt interest charges rise about $650 million, according to the Ford government. The Bank of Canada has hiked interest rates six times this year, increasing the overnight rate from 0.5 per cent to 4.25 per cent since March of 2022. That equates to a $2.4 billion cost increase.

“With $2.4 billion, Ontario could be building two brand new hospitals,” said Goldberg. “Instead, taxpayer dollars are lining the pockets of bond fund managers.”

Ontario is poised to spend $14.5 billion on debt interest in 2023-24. That’s more than $1 billion per month.

“With interest rates at their highest levels in several years, now is the time to be financially responsible,” said Goldberg. “The Ford government must ensure the budget remains balanced and that debt is going down, not up. Instead of spending billions on interest payments, money should be kept in the pockets of taxpayers, where it belongs.”

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