Last week, the Globe and Mail published an editorial discussing Ontario’s fiscal challenges, which badly misses the mark.
The editorial argues that the Ford government needn’t concern itself with its stated objective of balancing the budget.
Instead, it argues for shrinking the deficit somewhat, to around $6 billion or less, which the Globe says would be sufficient to allow the province’s debt-to-GDP ratio to fall gradually.
Indeed, the authors credit former Premier Kathleen Wynne for achieving this target in her final years in office.
The Globe’s implicit endorsement of permanent deficits is problematic for several reasons.
First, it fails to engage with the fact that Ontario’s debt-to-GDP ratio (the best measure of the sustainability of a government’s debt burden) is at an all-time high of 40.7%.
This is actually slightly up from, for example, 2015/16 when the ratio sat at 40.3%.
In short, no progress has been made at all.
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