Ontario debt to soar by $50 billion
over four years: FAO
TORONTO - Ontario’s debt is set to jump by $50 billion over
the next four years, the province’s financial watchdog warns.
Financial Accountability Officer Stephen LeClair says
Ontario’s net debt will reach $350 billion by 2020-21. The
FAO warns that
Ontario’s debt
burden is one of the
highest
among Canada’s
provincial
governments and an
interest rate
hike could put its credit and “fiscal flexibility” at risk.
“You do have to be cautious about the amount that you
borrow,” LeClair said. “I do recognize that the government is
borrowing to finance some of their capital build and that will
provide benefits to the province. But you still have to service
that debt, and at some point in time, interest rates may rise,
which will require a greater amount to service debt.”
As of March 31, 2016, Ontario’s debt sat at $296.1 billion.
LeClair notes that in the previous fiscal year, 2014-15,
Ontario had the highest debt burden among the country’s
major provinces, “carrying $2.40 in net debt for each dollar
of provincial revenue.”
LeClair also notes that 38% of Ontario’s current net debt
comes due in 2020. The province could “roll over” the debt,
which means taking on more debt to pay off the existing
balance.
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