If you are wondering why the Ontario government has been hinting at so many tax cuts as of late, unfortunately, it's time for a rude awakening when it comes to the province's financial status. With Ontario's yearly deficit prepared to hit $15 billion in this year alone to add to an already large net deficit amount, it's become imperative that the local government begins questioning every expense.
After the Conservatives handed the government over to the Liberals in 2003, Ontario has been dealing with a catastrophic amount of debt ever since. In 2017, a 125% spike in debt was recorded since 2003.
That's right, according to Moody's Investors Service, Ontario's net debt stands at a whopping 338 billion dollars and is "the highest of any sub-sovereign borrower." No, that isn't a typo, 338 billion. Meaning the current Conservative government is going to be dealing with some serious damage control for the next few years.
That 338 billion deficit is currently the largest in Canada. According to the National Post, it takes combining three provinces - Alberta, British Columbia and Quebec - to reach a similar amount of debt, $312 billion, that Ontario is facing alone.
As of right now, Doug Ford has already claimed to be "committed to balancing the books," after getting rid of a basic income program as well as social assistance. Those efforts combined with other cuts are projected to save the province up to 2 billion this year according to TD Bank. It's also been projected that halting the minimum wage hike and freezing funding for other programs could save the province another billion dollars on top of that.
While the Conservatives seem devoted to bringing down the province's debt, they didn't come into power without making some expensive promises themselves. According to TD, their campaign pledges could push the budget to as high as $18.7 billion come the 2019-2020 year. For example, the recent axing of income tax for low-income workers by Ford will be costing the province 120 million in the upcoming 2019-2020 year.
It will definitely be interesting to see how the Conservative government balances delivering on their promises while simultaneously lowering the province's massive debt. While Ontarians want the province's debt as low as possible, we can only hope that it does not come at the expense of crucial programs provided by the provincial government.