Ontario debt

What did Ontario get for our money?

Note from Bob: I received an e-mail, of the type candidates will likely see in the next two months, from a riding resident who objected to Ontario’s investment of $22.8 million in our local hospitals, feeling that Ontario should have been putting funds of this type toward debt repayment. I thought I would share my response to this type of assertion that Ontario should never have borrowed the money the Province did during the recession, should never have invested it in the economic sectors it did, and should have settled for being ‘second-banana’ to other places.

The Ontario Budget for 2017-18 is in surplus. Ontario’s net-debt-to-GDP ratio of 39 percent is among the smallest in the G-8 and is going down. Everywhere else in the G-8, net-debt-to-GDP is going up. Ontario’s net-debt-to-GDP ratio is lower than it was under the previous government. Only two other provinces have a lower debt-to-GDP ratio. Ontario got back to a balanced budget following the recession exactly on schedule, never once missing (or failing to exceed) its deficit reduction targets in each year since running three successive budget surpluses in the fiscal years ending in 06, 07, and 08. With the 2018 surplus, that makes four budget surpluses since 2003, despite the recession and the $5.6 billion deficit the government inherited in 2003. That’s more than Harris, Davis and Robarts, combined!

When our Liberal government was elected, Ontario’s GDP (gross domestic product) was in the $550 billion range. Today it is $850 billion, and Ontario is on track to become, after California, North America’s second trillion-dollar GDP. That’s sound economic growth. That’s sound investment of Ontario’s money.

Ontario borrowed a lot of money to get through the recession. In contrast to nearly the whole world, Ontario has something to show for it: North America’s fastest-growing economy; a completely renewed electricity system; renewed road networks, hospitals and schools; a continuing $190 billion investment over ten years in essential urban infrastructure; and more incoming overseas investment than California (i.e. more than any other province or state).

  • The GTA’s financial services sector is now comparable to London in size;
  • Ontario’s renewable and green energy industry went from nothing to 50,000 high-value, export-oriented jobs in a decade through targeted investment;
  • Ontario’s life sciences sector is now on par with Switzerland, California and Massachusetts, and much of it centred in this very neighbourhood of Mississauga;
  • Meadowvale now has a booming aerospace sector, rapidly growing in value and high-skills employment year. High-value manufacturing is booming right here in Peel Region and across Ontario. Access to skilled workers is a major concern to our employers, who have challenging and rewarding careers to offer;
  • Ontario’s digital media and film production sector is now third only to California and New York in North America;
  • Ontario’s auto sector received – and repaid with interest – a handsome investment (to GM and Chrysler) during the recession, and now makes the latest-generation of cars for Ford, Chrysler, General Motors, Honda and Toyota (2 plants);
  • Since the bottom of the recession, Ontario had added nearly 800,000 net new jobs, the vast majority full-time, high-skill, high-value positions because of the type of investment that the Province has attracted.

Ontario could have starved – and lost – the auto sector after 2008, insisted on disinvestment in the name of lower overall debt, and ironically seen a higher net-debt-to-GDP ratio than we have now. Actually, that is precisely what the Conservatives urged the government to do. We would have been a less prosperous, smaller economy, content to be second fiddle to Europe or parts of America. Our government chose not to do that.

Now we are the elephant in the room: the largest economy in the Great Lakes Basin; the highest population of any Great Lakes or Midwest state or province; the most modern infrastructure; the best school and university system; the most preferred place for overseas investment in North America. Welcome to first place!

The average Canadian household is carrying 161 percent of its household income in debt, and that amount is increasing. As noted above, Ontario’s net-debt-to-GDP is a quarter of that, is decreasing, and has been completely refinanced over a period of 30 to 40 years at low and locked-in rates. Ontario is easily able to afford its ‘mortgage,’ and has, over the years, been able to reduce the principal of that debt when it ran budget surpluses.

After a decade in which ordinary people had to wait while the rich got filthy rich, and took their money outside Canada, it’s the average family’s turn for the next few years. As your MPP, investing in the future of our families and households in Lisgar, Meadowvale and Streetsville strikes me as a fair, compassionate and intelligent use of Ontario’s money.

As your MPP, I have been successful in bringing the mandate and money to build Phases II and III to Credit Valley Hospital, and to have worked to more than double GO transit service to northwest Mississauga during my time. I have worked with my colleagues to keep our health care sector growing to meet the challenges of our growing population in Mississauga. I find it astonishing that Conservatives would demand we take the very health care money mature men and women in this community need right now, and give it to bankers, when Ontario can afford to invest it in the health care resources people need right now.

The Tories want people to get their information from sloganeering repositories of ‘alternative facts,’ without any dissonance from what I post on my web site, and carefully fact-check to ensure it is the truth.

Parties and candidates owe Ontarians a detailed plan for the future in this election. The people who elect us owe themselves an open mind to have a serious discussion about our future. The Ontario Legislature’s motto, in latin, is Listen to the other side. Ontarians should keep such an open mind this spring, as we choose our future.

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