Ontario’s So-Called Balanced Budget Is the Diet That Makes You Fat
Canadian Taxpayers Federation
- Despite claims of a balanced budget, Ontario’s debt is set to grow by $12.6 billion over two years
- The government is promising a government subsidized drug plan for people into their mid-twenties, with no costing or policy details in the budget
TORONTO, ON: The Canadian Taxpayers Federation is slamming the Ontario government’s claims to have balanced the budget after nine years of deficits, because the budget will add $12.6 billion in debt by 2019.
“It’s like a diet that makes you fat - it’s a so-called balanced budget that makes the debt get bigger,” said CTF Ontario Director, Christine Van Geyn. “The truth is that this isn’t a balanced budget when the debt clock keeps ticking higher.”
The budget also confirmed that Ontario continues to spend over $11 billion per year on debt interest, making interest the province’s fourth largest expense. Interest on debt is expected to grow, exceeding $12 billion next year.
“The province is spending almost a billion dollars a month on credit-card interest, without doing anything to pay down the principal,” said Van Geyn. “If that was the situation in my home, I wouldn’t be bragging to everyone that I’ve balanced my cheque book.”
Program spending is growing at 2.9 per cent per year, more than the two per cent rate it grew at in last year’s budget, and nearly triple the government’s promise of two years ago to keep spending at one per cent growth until 2018. Program spending is also growing faster than GDP, which is 2.3 per cent.
“Can you tell there’s an election next year? Suddenly ‘net zero’ wage increases are gone, program spending has tripled the government’s promise, and the government has conjured money from thin air to pay for government subsidized prescription medication for people into their mid 20s,” continued Van Geyn.
The budget promises government subsidized drug benefits for Ontarians aged 24 and under. This announcement is delivered in a press release that supplements the budget, but with very little detail included in the budget itself. Government officials said the plan will cost $465 million per year for just over two years, and is part of $4.5 billion in new money for health care.
“The new government subsidized drug program is suspiciously low on detail,” said Van Geyn. “It’s frankly bizarre that the government includes no costing or details about such a massive new policy in the budget. This looks like a last minute addition to the budget without much consideration of the province’s financial bottom line.”
The budget also includes tax hikes, new taxing powers, and special credits for select groups.
“There’s an entire section of the budget dedicated to taxation without a single tax cut,” continued Van Geyn. “This budget has new hotel taxes, higher tobacco taxes, the $1.8-billion carbon tax, and special credits for a select few. But what we need to keep Ontario competitive against Donald Trump’s America is broad based tax cuts. It’s disappointing not to see any concrete actions to make Ontario more competitive.”