Ontario’s business advocate takes candid look at province’s $348 billion debt in latest report
Bay of Quinte, ON – Today, the Bay of Quinte Chambers of Commerce (BQCC) and the Ontario Chamber of Commerce (OCC) released their most recent report, Accounting for Ontario’s Debt, offering a thoughtful and balanced analysis of the province’s debt. Ontario’s debt currently amounts to approximately 41 percent of the provincial GDP or, when combined with the federal debt of $680 billion, represents a near 80 percent debt-to-GDP ratio for Ontarians. With talk of looming provincial debt top of mind; this timely report examines what Ontario’s debt means for the economy of today and tomorrow.
In a recent OCC survey, nearly 80 percent of respondent businesses stated they were concerned about the impact the provincial debt could have on Ontario’s economy. Managing the provincial debt has been a long-standing concern for the business community as Ontario’s fiscal health directly impacts the ability of business to remain competitive and capitalize on new opportunities.
“As the province heads into a time of economic uncertainty, coupled with the possibility of rising interest rates, we urge the government to focus on balancing continued investments in economic development with putting the province’s finances on steady footing,” said Rocco Rossi, President and CEO, Ontario Chamber of Commerce. “Paying down the debt should not be at the risk of long-term economic growth or needed investments in infrastructure and services that will have a high return on taxpayer dollars, helping to bolster industry and our economy for generations to come. Our message in advance of Budget 2019 is about balance: accounting for our province’s debt in a reasonable manner while focusing on key investments and competitive taxation is critical to a stronger Ontario and competing on the global stage.”
The report notes Ontario is in a unique situation when it comes to managing its debt. Ontario has the debt exposure of a national government yet does not have generous lending fundamentals afforded to the federal government. With a GDP of nearly $850 billion, the province accounts for nearly half of Canada’s GDP. This means Ontario cannot rely on the protection of the national government when embarking on investments which aim to drive economic growth and prosperity. That is why the Bay of Quinte Chambers of Commerce and the OCC have long called for investments in areas such as transit and transportation, broadband internet, health care, skills and education, and trade promotion. These key investments will help grow the economy and allow businesses to flourish, jobs to be created, and, ultimately, Ontario to be more competitive and prosperous.
“In a recent OCC survey, nearly 80 percent of respondent businesses stated they were concerned about the impact the provincial debt could have on Ontario’s economy,” said Suzanne Andrews, General Manager at the Quinte West Chamber of Commerce. “Ontario has been able to take advantage of the low-interest rate environment in the past, however, as evidenced by the recent credit downgrade, its borrowing habit have not gone unnoticed by investors. If we were to suffer another downgrade, the consequences could be detrimental to Ontario’s ability to rollover debt and borrow at preferred rates. We are calling on the government to continue with key investments in next week’s budget as they get Ontario’s Fiscal House in Order.”
“As discussed within the report, spending cuts must be done with the full understanding of the economic consequences associated with the failure to either maintain and build critical infrastructure, or invest in social programs and growth-supporting services,” states Jill Raycroft, CEO at the Bellevillle Chamber of Commerce. “While the amount is alarming, the government must continue to invest in infrastructure spending to ensure the economy can continue to grow. For example, focusing on paying down debt faster with higher taxes may have the unintended reverse effect – people spend and invest less while businesses suffer. The Ford administration’s greatest task will be to spend responsibly and we hope to see this reflected in the budget announcement on April 11th.”
“When discussing how to account for Ontario’s debt, our report calls on the public and government to have a frank conversation. Priority must be placed on understanding the opportunity costs stemming from deficit spending, tax increases and spending cuts. With that in mind, we ask that the government prioritize good debt maintenance by running an efficient government while also investing in growth and development,” said Lesley Lavender, Executive Director at the Prince Edward County Chamber of Commerce. “One thing is certain: government decisions in Budget 2019 regarding Ontario’s debt will have profound effects on industry and communities for years to come.”
When it comes to addressing the debt and deficit, the BQCC and OCC’s breakthrough report will act as a reference for debate and change as well as inform thoughtful, evidence-based policies with an eye towards fiscal balance and strategic spending. As the independent, voice of business, the local Chambers of Commerce and the OCC will be working with leaders in government and the business community to help develop the necessary solutions in addressing Ontario’s debt challenge to drive forward a stronger and more competitive province.
– 30 –
The Bay of Quinte Chambers of Commerce collaborates as the regional voice for the Belleville, Prince Edward County and Quinte West Chambers of Commerce. Representing over 1200 businesses of all sizes and all sectors located in the Bay of Quinte riding, this regional voice advocates for fair government policies that allow businesses to thrive and prosper. The Ontario Chamber of Commerce is Ontario’s Business Advocate.
For more information, please contact:
Lesley Lavender, Executive Director
Prince Edward County Chamber of Commerce
Suzanne Andrews, General Manager
Quinte West Chamber of Commerce
T: (613) 392-7635
Jill Raycroft, CEO
Belleville Chamber of Commerce
T: (613) 962-4597