| Fiscal Year | Net Debt (CDN$ billions) | Deficit (-) or Surplus (CDN$ billions) | |
|---|---|---|---|
| 2021-22 | 380.4 | 2.1 | |
| 2020-21 | 373.6 | -16.4 | |
| 2019-20 | 353.3 | -8.7 | |
| 2018-19 | 338.5 | -7.4 | |
| 2017-18 | 323.8 | -3.7 | |
| 2016-17 | 314.1 | -2.4 | |
| 2015-16 | 306.4 | -5.3 | |
| 2014-15 | 294.6 | -11.3 | |
| 2013-14 | 276.2 | -11.5 | |
| 2012-13 | 259.9 | -10.7 | |
| 2011-12 | 241.9 | -15.4 | |
| 2010-11 | 217.8 | -17.3 | |
| 2009-10 | 193.6 | -19.3 | |
| 2008-09 | 169.6 | -3.0 | |
| 2007-08 | 160.0 | 0.1 | |
| 2006-07 | 156.6 | 1.8 | |
| 2005-06 | 155.1 | -0.1 | |
| 2004-05 | 142.9 | -2.0 | |
| 2003-04 | 140.4 | -7.0 | |
| 2002-03 | 132.7 | 0.6 | |
| 2001-02 | 132.7 | -0.2 | |
| 2000-01 | 132.5 | 1.9 | |
| 1999-00 | 134.4 | 0.7 | |
| 1998-99 | 114.7 | -2.0 | |
| 1997-98 | 112.7 | -4.0 | |
| 1996-97 | 108.8 | -6.9 | |
| 1995-96 | 101.9 | -8.8 | |
| 1994-95 | 90.7 | -10.1 | |
| 1993-94 | 80.6 | -11.2 | |
| 1992-93 | 61.8 | -12.4 | |
| 1991-92 | 49.4 | -10.9 | |
| 1990-91 | 38.4 | -3.0 | |
| 1989-90 | 35.4 | 0.1 | |
| 1988-89 | 35.5 | -1.5 | |
| 1987-88 | 34.0 | -2.5 | |
| 1986-87 | 31.5 | -2.6 | |
| Sources: Fiscal Reference Tables (as of November 2020) [1] Contents | |||
The Ontario government debt consists of the liabilities of the Government of Ontario. Approximately 82% of Ontario's debt is in the form of debt securities (bonds, Treasury bills), while other liabilities include government employee pension plan obligations, loans, and accounts payable. [5] The Ontario Financing Authority, which manages the provinces' debt, says that as of March 31, 2020 (for the 2019-20 fiscal year), the Ontario government's net debt is CDN $353.3 billion. [3] Net debt is projected to rise to $398 billion in 2020-21. The Debt-to-GDP ratio for 2019-2020 was 39.7%, and is projected to rise to 47.1% in 2020-21. [6] Interest on the debt in 2019-20 was CDN$12.5 billion, representing 8.0% of Ontario's revenue and its fourth-largest spending area. [3] [7]
As of March 31, 2018 the breakdown of Ontario's debt is as follows: [8]
The majority of the debt (83.1%) was issued in Canadian currency.
The government of Ontario's debt has risen under all governments since 1989.
During the 1990s recession, the Ontario New Democratic Party (NDP) government of Premier Bob Rae increased the total debt from $35.4 billion in 1989-1990 to $90.7 billion in 1994-1995.
Under the Progressive Conservative government of Premier Mike Harris the debt increased from $90.7 billion in 1994-1995 to $132.7 billion in 2002-2003, even while cutting services and downloading formerly provincially-run services onto the municipalities. [9] In the same period, the federal Liberal government cut $7 billion total in transfers to all of the provinces. Following this, during the Harris government period, the federal government restored and actually increased support for the provinces. [10]
The Liberal government of Premier Dalton McGuinty, increased spending on social and energy programs and uploaded services from the municipalities, doubling the total debt from $132.7 billion in 2002-2003 to $276.2 billion in 2013-2014. [11]
The Liberal government of Premier Kathleen Wynne, in part through the sale of Hydro One shares, projected a $600-million surplus in 2017-2018 [12] [13] but instead posted a 3.7 billion dollar deficit.
Change of Accounting Method for Government Assets
According to The Star, a 27-page "scathing" pre-election April 2018 report by Bonnie Lysyk, the Auditor General of Ontario, which was submitted to the Ontario Legislature, [14] said that the accounting methods used by Wynne's liberal government were "lawful" but not "right". [14] AG Lysyk has issued opinions that the government was understating the deficit by several billion dollars, because it was not following Canadian Public Sector Accounting Standards. [15] [16] She was referring to about $11 billion in the government jointly sponsored pension plans (JSPPs)—Ontario Public Service Employees' Union Pension Plan and the Ontario Teachers' Pension Plan—that Wynne's government "counted toward the bottom line". Based on Lysyk's revised accounting methods, these funds are not revenue which dramatically increases the annual debt. Using these revised accounting methods, Lysyk "calculated that the deficit forecast for [2019] is $12.2 billion—not the $6.6 billion Finance Minister Sousa had predicted." [14] For 2020-21 it would be "$12.5 billion, not $6.5 billion." She said "More money will need to be borrowed to pay for the unrecorded expenses even when the government reports an annual surplus or a balanced budget. [14] The government's claim of a surplus was not reflected in any way in the amount of the debt.
The Independent Financial Commission of Inquiry August 30, 2018 report was tabled to "establish a budgetary baseline" and to clarify Canadian Public Sector Accounting Standards requirements that the Ontario government must follow for the Auditor General of Ontario reports. [17] The Commission recommended revising the Public Accounts of Ontario 2017–2018 to comply with the Auditor General's "accounting treatment for any net pension assets of the Ontario Teachers' Pension Plan and Ontario Public Service Employees' Union Pension Plan on a provisional basis", which would include "restatement of the prior year's figures for comparative purposes." [17] : 2 The 2018 Budget had forecast a deficit that was 2.9 percentage points lower than the October report. The Commission recommended that the government revise the "accounting treatment for global adjustment refinancing and jointly sponsored pension plans (JSPPs)...[retroactively] from 2001–02 onwards" which added a "cumulative $14.6 billion to net debt." [18] : 139 This represents a revised net debt-to-GDP ratio up from 40.5% to 40.8%. [18] : 139
The Star reported on December 5, 2018, that Cindy Veinot, who was then Ontario's provincial controller, disagreed with Minister Fedeli's $15 billion deficit figure and the "accounting decisions made by the Ford government". Veinot said that, "I believe that the consolidated financial statements of the province of Ontario as issued … materially overstate the deficit of the province for the year. [19] Veinot resigned in September 2018, "because she refused to sign off on Finance Minister Vic Fedeli's inflated $15 billion deficit", according to The Star. [19] The Star described Veinot, as a "leading expert on pension accounting who finished first among 63,000 candidates in the 1998 certified public accountants exam in the U.S. [19] Veinot contended that the government jointly sponsored pension plans (JSPPs) "holdings are an asset." Until 2015, Auditor General Lysyk and her predecessors considered the JSPPs holdings to be an asset but in 2015, she changed her mind. The previous Liberal government also held that the JSPPs were an asset but Ford's new government administration disagreed. [19]
| (billions) | Budget plan 2018-9 | Revised baseline | Impact on deficit |
|---|---|---|---|
| Revenue | 152.5 | 150.9 | (1.5) |
| Total expenses | 158.5 | 164.9 | (6.4) |
| Surplus (Deficit) Before Reserve | (6.0) | (14.0) | (8.0) |
| Reserve | 0.7 | 1.0 | (0.3) |
| Surplus / (Deficit) | (6.7) | (15.0) | (8.3) |
According to an April 11, 2019 Royal Bank of Canada (RBC) report, the revised estimate of Ontario's deficit was $11.7 billion in 2018-2019 and it was projected to decrease by $1.4 billion in 2019-2020 mainly because of "the removal of the $1 billion contingency reserve." At that time it was projected that the deficit would be "completely eliminated in 2023-2024 with a small surplus of $0.3 billion." [20]
By June 2018, Ontario had "Canada's second-highest public debt per person and a growing budget deficit", according to The Economist. [21]
The Ontario Finance Department reported in October 2018, that Ontario's public debt per person at $23,014, had surpassed that of Quebec at $21,606 in the fiscal year 2017-2018. [18] Newfoundland and Labrador public debt per capita at $27,761, was the highest in Canada. [18] : 141
The RBC said in April 2019, that the Ford government's debt target is soft, aiming to reduce the net debt-to-GDP ratio to "less than the inherited 40.8%" in the early years to "38.6% by 2023-2024." [20]
By 2019, the Ontario Chamber of Commerce reported that Ontario's debt was over $348 billion—representing about 41% of provincial GDP of almost $850 billion. Ontario's GDP is much larger than any of the other provinces and is almost half of Canada's GDP. "When combined with the federal debt (approximately $680 billion), the debt-to-GDP ratio for Ontarians nears 80 percent." [22]
A September 21, 2018 review said that the 2017-18 deficit was $3.7 billion. [23]
By way of contrast, the 2018-2019 deficit was eventually $7.4 billion, higher than the outgoing Wynne Government's projection but much lower than the incoming Ford government's $15 billion estimate in August 2018. [24]
The Ford government subsequently ran a budget deficit of $8.7 billion during the 2019-2020 fiscal year. [25] Due to record spending during the COVID-19 pandemic, the Ontario government's budget for 2020-2021 is set for $38.5 billion, setting a new record and plotting no path to balance. [26] It was reported in late 2020 that the Ford government was sitting on $12B of unspent COVID-19 contingency funding as the second wave hit, some of which was provided by the Federal government. [27]
Health and education together account for more than 50% of Ontario's spending ($61.3B and $29.1B, respectively). [28]
Tax cuts and incentives to high income earners during the 1990s reduced government revenues. [29]
The Great Recession of 2008 had a considerable impact on Ontario, particularly its manufacturing sector[ citation needed ]. Ontario's budget surplus in 2007-2008 had by 2009-2010 given way to a $19 billion deficit. [30]
Ontario government's direct subsidies to corporations average $2.7 billion per year over the five years to 2011. [31] It has been argued that business subsidies such as to the Ontario's automotive sector does not help create widespread economic growth or new jobs and instead contributes to increased debt. [31]
In 2012, Moody's Investors Service downgraded Ontario's rating from Aa1 to Aa2, citing "growing debt burden" as a major concern. [32] In April 2018, the agency changed its outlook on this rating from "stable" to "negative," stating its expectation that "spending pressure will challenge the province's ability to sustain balanced fiscal results across multiple years." [33]
In 2012, the Provincial Solvency and Federal Obligations study found that Ontario had a 42.9% probability of defaulting on its debt obligations in the following 10-20 years (higher than any other province) and a 79.3% probability of defaulting in the following 30 years. [34]
In 2012, the governing Liberal Party commissioned the Drummond Report, which outlined various measures to reduce the province's debt level.
Debt reduction was proposed by all three major provincial parties in their 2014 election platforms. The Progressive Conservative Party proposed to eliminate the deficit and reduce debt through eliminating 100,000 public sector jobs, a public sector wage freeze and benefit reduction, and service cuts to all programs except healthcare. [35] The New Democratic Party proposed to balance the budget by eliminating corporate tax "giveaways" and through the Fairness Tax on Ontario's highest income earners. [36] The Liberal Party proposed to balance the budget by 2017-2018 by establishing a committee of ministers to find $2.25B in savings over 3 years and reduce the number of government agencies by 30%. [37]
Non-governmental organizations in other Provinces such as the Fraser Institute and the Canadian Taxpayers Federation have advocated for aggressive debt reduction through spending cuts[ citation needed ]. Organizations such as the Canadian Centre for Policy Alternatives have advocated for strong stimulus programs such as infrastructure spending to aid economic recovery and growth during the Great Recession[ citation needed ]. They also advocate eliminating corporate subsidies, tax loopholes and cuts.
The national debt of the United States is the total national debt owed by the federal government of the United States to Treasury security holders. The national debt at any point in time is the face value of the then-outstanding Treasury securities that have been issued by the Treasury and other federal agencies. The terms "national deficit" and "national surplus" usually refer to the federal government budget balance from year to year, not the cumulative amount of debt. In a deficit year the national debt increases as the government needs to borrow funds to finance the deficit, while in a surplus year the debt decreases as more money is received than spent, enabling the government to reduce the debt by buying back some Treasury securities. In general, government debt increases as a result of government spending and decreases from tax or other receipts, both of which fluctuate during the course of a fiscal year. There are two components of gross national debt:
The economies of Canada and the United States are similar because both are developed countries. While both countries feature in the top ten economies in the world in 2022, the U.S. is the largest economy in the world, with US$24.8 trillion, with Canada ranking ninth at US$2.2 trillion.
In economic policy, austerity is a set of political-economic policies that aim to reduce government budget deficits through spending cuts, tax increases, or a combination of both. There are three primary types of austerity measures: higher taxes to fund spending, raising taxes while cutting spending, and lower taxes and lower government spending. Austerity measures are often used by governments that find it difficult to borrow or meet their existing obligations to pay back loans. The measures are meant to reduce the budget deficit by bringing government revenues closer to expenditures. Proponents of these measures state that this reduces the amount of borrowing required and may also demonstrate a government's fiscal discipline to creditors and credit rating agencies and make borrowing easier and cheaper as a result.
Kathleen O'Day Wynne is a former Canadian politician who served as the 25th premier of Ontario and leader of the Ontario Liberal Party from 2013 to 2018. She was member of provincial parliament (MPP) for Don Valley West from 2003 to 2022. Wynne is the first female premier of Ontario and the first openly gay premier in Canada.
Hydro One Limited is an electricity transmission and distribution utility serving the Canadian province of Ontario. Hydro One traces its history to the early 20th century and the establishment of the Hydro-Electric Power Commission of Ontario. In October 1998, the provincial legislature passed the Energy Competition Act which restructured Ontario Hydro into separate entities responsible for electrical generation, transmission/delivery, and price management with a final goal of total privatization.
PAYGO is the practice in the United States of financing expenditures with funds that are currently available rather than borrowed.
The United States budget comprises the spending and revenues of the U.S. federal government. The budget is the financial representation of the priorities of the government, reflecting historical debates and competing economic philosophies. The government primarily spends on healthcare, retirement, and defense programs. The non-partisan Congressional Budget Office provides extensive analysis of the budget and its economic effects. CBO estimated in February 2024 that Federal debt held by the public is projected to rise from 99 percent of GDP in 2024 to 116 percent in 2034 and would continue to grow if current laws generally remained unchanged. Over that period, the growth of interest costs and mandatory spending outpaces the growth of revenues and the economy, driving up debt. Those factors persist beyond 2034, pushing federal debt higher still, to 172 percent of GDP in 2054.
Fiscal conservatism or economic conservatism is a political and economic philosophy regarding fiscal policy and fiscal responsibility with an ideological basis in capitalism, individualism, limited government, and laissez-faire economics. Fiscal conservatives advocate tax cuts, reduced government spending, free markets, deregulation, privatization, free trade, and minimal government debt. Fiscal conservatism follows the same philosophical outlook as classical liberalism. This concept is derived from economic liberalism.
Anthony Charles Sousa is a Canadian politician who has served as the Member of Parliament from Mississauga-Lakeshore since December 12, 2022. He previously served as the Minister of Finance for Ontario from 2013 to 2018. A member of the Ontario Liberal Party, Sousa was elected to represent Missisuaga South in the Legislative Assembly of Ontario in 2007. He joined the provincial cabinet as the minister of labour in 2010 and became Ontario's minister of citizenship and immigration in 2011. In 2022, Sousa ran as the federal Liberal candidate in the Mississauga-Lakeshore by-election which was held on December 12, 2022. Sousa won the election, defeating 39 other candidates.
Canadian public debt, or general government debt, is the liabilities of the government sector. Government gross debt consists of liabilities that are a financial claim that requires payment of interest and/or principal in future. They consist mainly of Treasury bonds, but also include public service employee pension liabilities. Changes in debt arise primarily from new borrowing, due to government expenditures exceeding revenues.
Greece faced a sovereign debt crisis in the aftermath of the financial crisis of 2007–2008. Widely known in the country as The Crisis, it reached the populace as a series of sudden reforms and austerity measures that led to impoverishment and loss of income and property, as well as a small-scale humanitarian crisis. In all, the Greek economy suffered the longest recession of any advanced mixed economy to date. As a result, the Greek political system has been upended, social exclusion increased, and hundreds of thousands of well-educated Greeks have left the country.
The Australian government debt is the amount owed by the Australian federal government. The Australian Office of Financial Management, which is part of the Treasury Portfolio, is the agency which manages the government debt and does all the borrowing on behalf of the Australian government. Australian government borrowings are subject to limits and regulation by the Loan Council, unless the borrowing is for defence purposes or is a 'temporary' borrowing. Government debt and borrowings have national macroeconomic implications, and are also used as one of the tools available to the national government in the macroeconomic management of the national economy, enabling the government to create or dampen liquidity in financial markets, with flow on effects on the wider economy.
The United Kingdom national debt is the total quantity of money borrowed by the Government of the United Kingdom at any time through the issue of securities by the British Treasury and other government agencies.
William Francis Morneau Jr. is a Canadian businessman and former Liberal Party politician who served as minister of finance and member of Parliament (MP) for Toronto Centre from 2015 to 2020.
The Canadian federal budget for fiscal year 2016–2017 was presented to the House of Commons of Canada by Finance Minister Bill Morneau on 22 March 2016. The deficit was projected to be $29.4 billion for the fiscal year 2016–2017, however this was adjusted to $17.8 billion by end of March 2017. This was later adjusted to $19.0 billion after reflecting a change in the discount rate methodology used to determine the present value of the Government's unfunded pension obligations. The Auditor General's recommendations resulted in revisions to 10 years' worth of budget numbers. The budget also forecast that the deficit would shrink to $14.3 billion four years later.
The Canadian federal budget for fiscal year 2017–2018 was presented to the Canadian House of Commons by Finance Minister Bill Morneau on March 22, 2017. The deficit was initially projected to be $28.5 billion, including a $3 billion adjustment for risk. This was later adjusted to $19.0 billion after reflecting a change in the discount rate methodology used to determine the present value of the Government's unfunded pension obligations. The Auditor General's recommendations resulted in revisions to 10 years' worth of budget numbers, which included turning the slim surplus the previous Conservative government left in 2014-15 into a small deficit.
The Canadian federal budget for fiscal year 2018–2019 was presented to the Canadian House of Commons by Finance Minister Bill Morneau on February 27, 2018. The deficit is projected to be $18.1 billion, including a $3 billion adjustment for risk. This was later refined to $14.0 billion when the Annual Financial Report of the Government of Canada for Fiscal Year 2018–2019 was released.
The Canadian federal budget for fiscal year 2019–2020 was presented to the House of Commons by Finance Minister Bill Morneau on March 19, 2019. This was the last budget before the 2019 federal election. The deficit is projected to rise to $19.8 billion, after including a $3 billion adjustment for risk. The budget introduced $22.8 billion of new spending over six years. The budget will not make any changes to the income tax brackets for individuals or corporations. This was later refined to $39.4 billion when the Annual Financial Report of the Government of Canada for Fiscal Year 2019–2020 was released.
The Canadian federal budget for the fiscal years of 2022–23 was presented to the House of Commons by Finance Minister Chrystia Freeland on 7 April 2022.
Bonnie Lysyk served as a government official, including as the Auditor General of Ontario from 2013 to 2023. Previous to this post, she was Provincial Auditor of Saskatchewan, and Deputy Auditor General and Chief Operating Officer of Manitoba.
