Ontario's debt risks Greek-style meltdown: Fraser Institute

Ontario's debt load is higher than California's and, if unchecked, could head towards a Greek-style meltdown, according to a Fraser Institute report released this morning.

Ontario's debt load is higher than California's and, if unchecked, could head towards a Greek-style meltdown, according to a Fraser Institute report released this morning.

"Comparisons to Greece may seem far-fetched, but Ontario's net debt to GDP currently sits at 37%, the same as Greece in 1984," said Niels Veldhuis, Fraser Institute president and co-editor of the report, The State of Ontario's Indebtedness.

The report found that, in the decade after 1984, Greece's debt increased to 66% and has since surged to 163% of GDP in 2011.

"If Ontario continues spending at its current rate, its net debt will increase to 66% from 37% in just seven years," Veldhuis said. "It took Greece 10 years to experience a similar increase. This highlights the unsustainability of Ontario's current spending trends."

The report also called out Ontario for carrying a debt load higher than California, the U.S.'s most indebted state.

"California has been roundly criticized by news media and the financial markets for its inability to control spending and reduce deficits," said Jason Clemens, Fraser Institute executive vice-president and co-editor of the report.

"Yet Ontario, with a fraction of California's population and a significantly smaller economy, is carrying a debt load almost two-thirds larger than California," Clemens added.

Clemens called on incoming Ontario Premier Kathleen Wynne to, as her first priority, take action against the province's "precarious" financial situation.

"Ontario simply cannot continue spending money it doesn't have; otherwise it will soon be compared to Greece, not California," he said.

jwagler@biv.com

@JennyWagler_BIV

comments powered by Disqus

Also Read

More From Economy

Although manufacturing in British Columbia and Alberta saw a slight dip in September, the two provinces remained the best performers in the country

Read Article

After six full months of steady increases, Canada’s gross domestic product growth was flat in July   

Read Article

Baby boomers today have disposable incomes 64% higher than millennials

Read Article

After a steep decline beginning in the 1980s, the ones that remain aren’t hurting the private sector, experts say  

Read Article

Economy

Gary Herman: Trades man

By Sept. 30, 2014, midnight

When the provincial government needed someone to help shift the focus of B.C.’s education system in favour of industrial training, it knocked on Gary Herman’s ...

Read Article

Subscribe to our mailing lists

* indicates required

Newsletters

×