The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
Andrea Mandel-Campbell is a former anchor at CTV’s Business News Network and author of Why Mexicans Don’t Drink Molson.
No one was really surprised when Ontario’s debt rating took another drubbing last week, adding Canada’s largest province to a long list of debt-swamped jurisdictions from Italy to Spain to be singled out by credit rating agencies for critical review.
Moody’s expressed displeasure with Ontario’s ballooning debt and dismal growth projections by lowering its outlook for the province’s debt rating to “negative.” It’s the latest in a cascade of downgrades beginning in 2009 after the province, having indulged in a massive uptick in government spending, was blindsided by the financial crisis.
Ontario’s Finance Minister Dwight Duncan promised to take the warning seriously – and the rest of Canada had better hope he means it. Ontario represents 40 per cent of the country’s GDP. As Janice MacKinnon, Saskatchewan’s former finance minister, recently pointed out, the rating agencies don’t look at Ontario in isolation, but at the country in its entirety. Ontario’s debt woes “hurt Canada as a whole,” she said.
So what should Ontario do to rein in a decade of projected budget deficits that would make an Albertan apoplectic? The governing Liberals are vowing to be “creative” in their cost-cutting, and government-hired consultants are in hot pursuit of the secret sauce. But what Ontario really needs is a reality check.
While many Ontarians are concerned about the state of the province’s finances, discussing the affordability of a pricey program like full-day kindergarten is politically taboo. As the mother of a four-year-old who just started kindergarten, I understand the appeal of “free” care. But Ontario is like the divorcee who can’t stop maxing out his credit card at Holt’s even though his alimony payments would suggest a trip to Sears.
Despite being in the worst fiscal straits of all the provinces, Ontario is embarking on the most ambitious early-learning program in the country, introducing not one but two years of full-day kindergarten for four- and five-year-olds. It also went for the gold-plated plan – using teachers instead of early childhood educators for half the day as originally envisioned. Additional cost: $500-million a year.
For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/news/opinions/opinion/ontarios-debt-canadas-woes/article2279912/