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Sunday, June 28, 2015

Kathleen Wynne has already steered Ontario's economy into the iceberg - now sit back and watch it sink

In the 2002-03 fiscal year, Ontario posted a budget surplus of $117 million – its fourth consecutive surplus. But in 2015-16, the province will be posting its eighth consecutive deficit. This is despite the fact that government revenues will be 16.6% of GDP in 2015-16, compared to 15.3% in 2002-03. 

Ontario’s net debt, which was at $133 billion in 2002-03, is projected to hit $320 billion by 2017-18. The debt-to-GDP ratio will have increased from 27.1% in 2002-03 to almost 40% in the next fiscal year. 

One of the primary reasons is the uncontrolled expansion of the public sector. A new Fraser Institute report published yesterday showed that employment in the public sector grew in Ontario by 27.6% from 2003 to 2013. That's 5 percentage points higher than the national average, and second only to Alberta's 31.9%. The difference is that Alberta has the private sector rate growth to match it: a 29.3% increase in private sector employment in Alberta, compared to an increase of only 5.6% in Ontario.

The result is that employment growth in the public sector, relative to the private sector, is ridiculously higher in Ontario than in any other province...

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