It seems that every other jurisdiction is raising the alarm about deficit spending and the looming sovereign crisis in Europe. Conversely, Ontario would be rowing against the current of world opinion and towards a possible tipping point.
Under McGuinty’s watch, Ontario’s debt has almost doubled to $230 billion, due to massive stimulus spending as well as unrestrained growth in health care and education. And it will continue to rise despite announced plans for greater austerity. By the time a balanced budget is contemplated in 2017, the province will have added an additional $67 billion in new debt. On a per capita basis, the current provincial deficit is almost twice as large as that of its next nearest wastrel, New Brunswick. While low interest rates have made the debt burden manageable to date (about 10 cents of every dollar goes to interest), the prospect of higher rates in the future presents a dangerous worst-case scenario.
Tackling this debt problem will require far more immediate and drastic steps than the premier has revealed to date; his new minority government will make this job even tougher. But whether McGuinty gets serious about the debt or not, his past profligacy will cause suffering across Canada.
Anyway you cut it, the two headed hydra debt and deficit cannot be tackled by a Liberal NDP tag team. This problem is made more acute by the skyrocketing under- employment of Ontario’s youth. Ontario has the highest per capita unemployment rate for youth in all of Canada sitting at 15%. When you have more young people enrolled in university than out in the work force with well-paying jobs before the age of 30, it’s a major issue. Simply put, the current generation can ill afford four more years of the status quo, where politicians try to out promise and maneuver each other. First there was Generation X, then there was Generation Y and now there is a Generation growing up with the prospect of paying off Ontario’s ballooning debt .
However, if past behaviour is a predictor of future events at all, there is a grave doubt that any combination of a Liberal minority being propped up by an emboldened NDP, will confront the gloomy economic realities that Ontario might be facing. With all this talk of debt and deficit this reminds me of the old Chinese proverb, may you live in interesting times. For those who follow Ontario politics, it’s about to get a whole lot more interesting.