Earlier this week, Lambton—Kent—Middlesex MPP Monte McNaughton introduced legislation that seeks to limit the amount of debt the province can assume by implementing an Ontario debt cap.
“The McGuinty-Wynne governments have failed to balance the books nine straight times. Along the way, they’ve piled up $300 billion in debt and driven Ontario’s debt to GDP ratio from 27% to over 40% – a whopping 48% increase in just nine years,” said McNaughton. “My bill would provide taxpayers some assurances that our provincial debt will not continue to grow endlessly.”
McNaughton says even with historic low rates, the interest payments on Ontario’s debt alone account for nearly $11.5 billion every year – money that could, and should, be going to pay for new investments and key programs. Only the Ministry of Health and Ministry of Education consume more tax dollars annually.
McNaughton’s bill would amend the Financial Administration Act to prevent the government from raising or borrowing money if the effect of doing so would cause Ontario’s net debt to exceed 45 per cent of its gross domestic product.
“With a $300,000,000,000 provincial debt, Ontario is the most indebted sub-national borrower in the world. It’s time we draw a line in the sand and have a serious conversation about the level of debt we want our government taking on,” said McNaughton.
If McNaughton’s bill were to pass, it would make Ontario the second province to have implemented a provincial debt cap. Alberta also has a provincial debt cap, which sits at 15% of GDP. The three territories also have debt caps of $800 million (NWT), $400 million (Yukon) and $400 million (Nunavut).
“Ontario taxpayers are demanding a credible plan to balance the books and pay down the debt and I think this is an important conversation to have. If passed, my bill will put Kathleen Wynne on a firm credit limit on behalf of Ontario taxpayers, and would help to keep things in check.”
McNaughton says the second reading of the proposed legislation will take place in May.
The bill could be implemented by the end of the year, if McNaughton can gather up the support.
In order to help do so, McNaughton is launching a province-wide “Back in the Black Ideas Tour” where he will be seeking support for the bill all across Ontario.
