Ontario reckons with a 15-year spending binge

Ontario’s politicians have to stop spending like drunken sailors

Jay GoldbergOntario Premier Doug Ford needs to end the province’s 15-year-long spending bonanza.

Ford continues to rule out spending cuts to help balance the budget, but he shouldn’t.

To contextualize Ontario’s history of reckless spending, take yourself back to 2007. The first-ever iPhone was just released. U.S. President George W. Bush in the White House. And the Ottawa Senators made it to the Stanley Cup Finals.

That’s the last time the province of Ontario balanced its budget. Since then, Ontario’s politicians have been spending like drunken sailors.

Over the past 15 years, government revenue in Ontario has increased by 80 per cent, or an average of 5.4 per cent per year.

With a balanced budget 15 years ago and revenue growing at such a robust level, one would think that Ontario’s finances would be in excellent shape.

Instead, they’re in shambles.

Why have Ontario’s finances gotten so out of control?

Three premiers in a row have hiked spending at unprecedented levels. While revenue growth averaged 5.4 per cent over the past 15 years, spending growth averaged a shocking 8.5 per cent.

Over 15 years, that’s a growth rate of 127 per cent.

That is not living within our means.

If Ontario’s leaders had only increased spending at the rate of inflation plus population growth over the same 15-year period, government spending this year would be $128 billion rather than the present $190 billion.

In other words, the provincial government is overspending by $62 billion this year. Ontario governments have overspent by a total of $429 billion over the last 15 years, which is a larger sum than the provincial debt.

Had Ontario’s politicians simply kept spending growth in line with inflation plus population growth, Ontario would be debt-free today.

Instead, Ontario is now the most indebted subnational unit in the entire world. We owe a stunning $400 billion. And that number keeps going up.

Given that Ontario is set to overspend by $62 billion this year, asking the Ford government to consider spending cuts to help lower the deficit should be a no-brainer.

In fact, if every government sector were to return to pre-pandemic spending levels, other than health and long-term care, Ontario could cut its record-high $21.5 billion deficit nearly in half.

Calling on the government to return to pre-pandemic spending in ministries other than health and long-term care is more than reasonable. Additional pandemic spending was meant to be temporary. But the Ford government’s fall economic update indicates that it will be anything but.

Finance Minister Peter Bethlenfalvy announced last week that every sector of government will see spending go up this year. The government hasn’t even tried to find savings.

For Ontario taxpayers, that’s simply unacceptable.

If responsible, hardworking Ontario taxpayers were getting a 5.4 per cent raise each year, they wouldn’t respond by increasing their household spending by 8.5 per cent.

Click here to downloadThe government shouldn’t either.

Ford and his team were elected on a promise to fix Ontario’s finances. Yet his Progressive Conservative government is digging the hole deeper.

When Ford declared “the party is over with the taxpayers’ money,” it seems that he only meant the Liberal party with taxpayer’s money was over.

Ford decided to throw a party of his own, and it’s even more expensive than the one he ended.

It’s time for the government to stop spending like there’s no tomorrow.

If politicians had asked Ontarians 15 years ago if they were willing to keep government spending increases to inflation plus population growth in exchange for a debt-free Ontario, taxpayers would have taken up the offer.

Instead, we face $400 billion in debt.

If Ford wants to do right by taxpayers, he needs to end the party with taxpayers’ money. That includes targeted spending cuts.

Jay Goldberg is the Interim Ontario Director for the Canadian Taxpayers Federation.

Jay is a Troy Media Thought Leader. For interview requests, click here.


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