The sirens are now going off south of the border that Canada’s provincial governments (namely Ontario and Quebec) are spending beyond their means and endangering their future taxpayers to a mounting tax headache.
Here is the Wall Street Journal’s news column: Canada’s Budget Watchdog Says Provincial Debt Unsustainable
The WSJ writes:
Canada’s budget watchdog Tuesday warned that the federal government’s push toward a budget balance masks a serious fiscal threat at the subnational level, where the country’s provincial governments are accumulating debt at an unsustainable pace.
The Canadian provinces’ fiscal performance has deteriorated since the onset of the global financial crisis, and the Office of the Parliamentary Budget Officer has issued other warnings on provincial government debt. But its latest report comes after major bond credit-rating firms this month downgraded their ratings on Canada’s most populous province, Ontario, and neighboring Manitoba.
In this article, WSJ identifies the largest culprits of Canadian debt.
Ontario and Quebec, the two biggest provinces by population, are carrying the biggest debt loads, with net debt-to-GDP ratios of roughly 39% and 49%, respectively. Quebec, after taking some austerity measures, projects a balanced budget this year.
Elsewhere, in Canada’s Financial Post, a headline today reads:
With twice the debt of California, Ontario is now the world’s most indebted sub-sovereign borrower
FP puts Ontario’s debt pile nightmare into context:
While Ontario’s population is about one third of California’s, its debt load is more than double that of the biggest U.S. state.
Is it not time for Ontarians to demand more of Premier Wynne and her Liberal Government than their tax-and-spend-and-spend-some-more approach to the province’s finances?
(ed. – Surely, we won’t accept that the answer is to wine and complain that the federal government must give Ontario more tax transfers? Should we not start with the notion that we begin to live within our means?)