Ontario Faces another Credit Downgrade
(July 13, 2015) Standard and Poor downgrade of Ontario's credit rating from AA- to A+ is indicative of the Wynne's government continued fiscal mismanagement of Ontario's finances.
It not only acknowledges that Ontario's deficit continues to grow from $9.2 billion in 2013 to $10.5 billion in 2014 to $10.9 billion in 2015 under the Kathleen Wynne government, but it further shows that the Liberals have no substantive plan to deal with the debt.
How will this affect you?
There are consequences to fiscal mismanagement. A credit downgrade means higher borrowing costs; less money available for the things Ontarians care about most, like healthcare and education; and, more debt for our children and grandchildren to worry about.
It's shameful for any government to spend beyond their means and leave it to future generations to pay for, but particularly for this government considering their track record and the ample warnings they have been given to change course. They have simply chosen not to.
In October, The Ontario Chamber of Commerce released a report highlighting the negative consequences of Ontario's debt and deficit and urging the government to take immediate action through a number of suggested approaches. They note that in 2013-14, Ontario's debt was $267.2 and the cost of servicing the debt is $10.6 billion in interest per year, or $29 million per day.
That's $29 million per day that could be going toward much needed hospitals, schools or services in Simcoe-Grey.
In her 2014 annual report, the Auditor General also warned that Ontario cannot afford to go on like this. The Auditor found that taxpayers are not getting value for the essential public services they rely on and she stated that failing to address the budget will result in "crowding out" of essential services like health care and education.
Even the credit rating agencies themselves have cautioned the Liberals to get their act together. In February, Moody's Investment Services' issued a report urging the government to rein in spending.
Under the Liberals revenues in Ontario have steadily increased from $66.5 billion in 2003 to an anticipated $124.4 billion in 2015. During this same time government spending has gone from $65.5 billion to $131.9 billion. Even basic math dictates that this is unsustainable. In fact, it goes against all common sense.
Yet, instead of listening to the experts and taking the warnings seriously to meet fiscal payments, Kathleen Wynne has continued to spend taxpayers money and now is opting to sell Ontario owned assets, like Hydro One, to help pay for it. This decision will have devastating consequences on our province and it still does not address the problem.
In order to attract investment, Ontario must remain competitive. High hydro rates, high deficits, high debt, high taxes and fees, red tape and now a credit downgrade is only deterring growth and edging out public services that people rely on most.
It's time this government listen to the experts and stop spending money that they simply don't have.