July 20, 2024
Fiscal headwinds heighten need for spending reductions in Ontario
The Ford government undoubtedly inherited serious fiscal problems.
The Ford government undoubtedly inherited serious fiscal problems.

Nobody said governing was easy.

On fiscal policy, the Ford government has learned this lesson the hard way, as it inherited a daunting budget deficit and faces headwinds that will make eliminating that deficit harder.

The scale of these problems, however, are no cause for defeatism — the Ford government can still eliminate the deficit quickly if it moves to reform and reduce provincial government spending.

First, let’s consider the challenges.

The new government has made a convincing case that its predecessors understated the size of the province’s budget deficit.

After a review of the books, the government now forecasts a $11.3 billion deficit this year — far larger than had been advertised by Premier Wynne’s government on its way out the door.

And it’s not just the size of the deficits that’s daunting — debt interest payments are forecasted to keep growing.

The last budget showed debt interest payments climbing by 4.3% annually over the course of the government’s fiscal plan.

Unfortunately, there’s not much the government can do about this in the short term (though the government’s choices could greatly influence debt interest payments in the long-term,) but this reality will certainly make it that much harder to make progress on the province’s bottom line.

There are challenges on the revenue side as well.

[…]

See Also:

(1) ‘Back office’ health agency jobs to be cut: Source

(2) Ford’s first year was bad. Here’s how he can do better

(3) Doug Ford government quietly considers raising driving fees, but expects ‘negative’ reaction

(4) Council fritters day away on nonsense

(5) Toronto could’ve done better with Raptors celebration security

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