The Wynne government may have pledged a balanced budget by 2018, but according to a new Fraser Institute report, the Liberals are actually adding $9 billion in debt next year — to pay for transit and other infrastructure projects — with the potential of repeating it for the next few years after that.
Ben Eisen, director of the Fraser Institute’s Ontario Prosperity and co-author of Hold the Celebration: A Balanced Budget Won’t End Ontario’s Fiscal Challenges, speaks about what the impacts are of the province landing more debt.
1. What does incurring more debt mean in terms of impact to future services that people can relate to?
“One of the major concerns with government debt is all of the new debt we accumulate needs to be serviced. Just like households need to pay interest on their debt, governments need to pay interest on theirs. That takes away money that then becomes available for a wide range of priorities, including either tax relief or public services — things like health care and education — so, money that goes to debt payment services becomes unavailable for those things. And that’s one of the biggest concerns about our rising debt burden.”
2. What’s the impact on future generations — young people who are entering the workforce, for example — in terms of taxation?
“The burden to servicing that debt is passed along to future generations. It goes on the books and then that…
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