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.