BALANCED BUDGETS

 

When the Ontario government spends more than it receives from tax revenues and transfers from the federal government, it borrows money and increases the provincial government's debt. As the debt gets bigger, Ontario pays more of its revenue to its lenders as interest on the provincial debt.

For at least a generation, all three parties in the Ontario legislature - the Liberals, the PCs, and the NDP - have been in favour of more borrowing. For example, echoing the Liberal governments of Dalton McGuinty and Kathleen Wynne, Ontario's PC party promised in its 2011 election platform "We will set priorities - and stick to them - to balance the budget no later than 2017-18"...in other words: 7 years, and two provincial elections, into the future.

The Liberal government engaged in a fire sale of provincial assets such as Hydro One in an effort to make the budget appear balanced in 2017. However, the fact of the matter is that the province has continued to spend more than it receives from taxes and federal transfers. As a result, Ontario is now the world's most indebted sub-sovereign borrower. Such borrowing and spending is not sustainable.

A balanced budget can be achieved within one budget cycle. In fact, in each of 2012, 2013, 2014, and 2015, the Freedom Party of Ontario submitted to the government an "Opposition Budget" that laid out a plan to balance the budget; a plan to ensure that the government stops borrowing, and spends no more money than it brings-in in tax revenues and federal transfer funds. Where there is a will, there is a way. It's just that the Liberals, PCs, and NDP lack the will.

Money spent on interest payments is money that is unavailable for important government responsibilities. A Freedom government will introduce a balanced budget in the spring of 2019, and will continue to run on a balanced budget in each year thereafter.

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