Most Ontarians probably don’t know it, but their average share of the federal and provincial debt totals about $61,000 each. And that’s raises two important questions: how did we get here and how are we getting out of this?
Ontario Premier Doug Ford inherited a tough job when he became captain of Ship Ontario in 2018. After more than doubling the provincial debt through a decade of deficits, the previous government left Ford a financial boat that badly needed bailing out.
Prime Minister Justin Trudeau can’t say the same. When Trudeau took the helm in 2015, Ottawa had a budget surplus. He promised to run a few “modest” deficits and return the country to a surplus by 2019.
Instead, Trudeau never actually balanced the budget.
Before we go blaming the COVID-19 for scuttling the ship, remember that the budget books were in bad shape before the pandemic began.
And now that Canadians are beginning to see the light on the horizon after the pandemic storm, it’s time to take stock of our finances.
The Canadian Taxpayers Federation released a report outlining how dire the present financial situation is. By the end of the current fiscal year, Ontario’s debt will be nearing $450 billion, while the federal debt will have exceeded $1.2 trillion.
That’s a lot of debt.
It would take a fleet of more than 8,800 big rig trucks to transport $1.6 trillion worth of five-dollar bills.
It would take a person more than 31,000 years to count to 1.6 trillion.
What does that mean for the everyday taxpayer?
By adding the provincial and federal debts together, every Ontarian will owe about $61,000 in government debt by the end of the year.
For that money, a student could pay for four years’ worth of undergraduate tuition and residence fees; a young family could make a down payment on their first home; or a retired couple could plan to leave a nest egg for their grandchildren.
But the numbers only show us how much debt our governments have accumulated thus far.
Neither the Ford government nor the Trudeau government has presented a plan to balance the budget that isn’t based on fantasy.
That means that $61,000 debt-owing invoice could easily climb much closer to $100,000 within the next decade.
And higher levels of debt per-person also means higher interest costs.
The amount of interest Ontarians are set to pay on government debt is alarming. Interest on the provincial debt alone is expected to hit $13 billion this year.
If Ontario didn’t have to pay such a daunting interest bill, the Ford government could have used that budget room to reduce the HST by three points and saved families millions of dollars on everything from new clothes to new cars.
Unfortunately, taxpayers can’t reverse course and erase all the debt our governments have piled-up over the past several years. But we can make choices today to ensure that the whirlpool our politicians have left taxpayers in doesn’t spin any faster.
It’s time for taxpayers to demand better from our captains. The Ford and Trudeau governments owe Canadians a plan to patch up the hull and balance the budget in a reasonable timeframe. Before the loan sharks start circling, it’s time to start paying down the tab.