McGuinty insists $214B debt isn't that bad
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TORONTOOntario’s debt isn’t out of control — yet — and Premier Dalton McGuinty says steps his government is taking will ensure it never is.
In the run-up to what’s expected to be a tough budget full of austerity measures to battle a $16-billion deficit, McGuinty said Ontario’s $214-billion debt, about 35% of GDP, was an acceptable level.
“You should know when the federal government acted in the early ’90s, their debt-to-GDP ratio was 67%,” he said Tuesday at Ryerson University while announcing plans to establish two birthing centres in Ontario.
“That’s when Prime Minister (Jean) Chretien and Finance Minister (Paul) Martin did what they did back then. They put on a full-court press to address their debt and deficit.
“We’re not prepared to wait until the debt level, the debt to GDP goes all the way to 67%. “We’re acting when it’s about 35%. We’re being proactive.”
Ontario set out a plan in last spring’s budget to balance its budget by 2017-18 but that plan has been criticized as inadequate by Don Drummond, the government’s handpicked economic guru.
Drummond said the 2017-18 deficit could be $30 billion and the debt soar to more than $400 billion unless spending was cut back.
In question period Tuesday, Progressive Conservative Leader Tim Hudak called out McGuinty on the issue, saying the growing speculation the budget will scrap planned corporate tax cuts to secure New Democratic Party support will further damage Ontario’s economy.
“When you get the fundamentals right, jobs follow,” Hudak said.
“All we’ve heard about is further tax increase to finance runaway spending.”