TORONTO, October 19, 2017 –Ontario’s Financial Accountability Office has released a Long-term Budget Outlook, which provides a projection of Ontario’s fiscal position to 2050.
“Over the next three decades, as the baby boom cohort transitions from working age to retirement and eventually into old age, Ontario will experience significant changes in its population and economy,” says The Honourable J. David Wake, Temporary Financial Accountability Officer of Ontario.
“Without government action, these demographic changes will slow revenue growth and increase spending, leading to large and rising budget deficits,” continues Wake.
The FAO projects that Ontario’s net debt-to-GDP ratio will rise to 63 per cent by 2050-51, significantly above today’s ratio of around 40 per cent, and far exceeding the government’s net debt-to-GDP target of 27 per cent.
To achieve the government’s debt-to-GDP target, the FAO estimates that the Province would need to permanently raise revenue or lower spending by at least $6.5 billion (or 0.75 per cent of GDP), leading to budget surpluses through the 2020s. Simply balancing the Provincial budget will not be sufficient to achieve a net debt-to-GDP ratio of 27 per cent by 2029-30.
If the Province delays raising revenue or reducing spending, Ontario’s net debt will continue to accumulate, making it costlier to achieve the Province’s future fiscal targets, while the burden of stabilizing Ontario’s public finances would be increasingly shifted from the baby boom generation to younger Ontarians.
Click here for the FAO’s Long-term Budget Outlook.
About the FAO
Established by the Financial Accountability Officer Act, 2013, the Financial Accountability Office (FAO) provides independent analysis on the state of the Province’s finances, trends in the provincial economy and related matters important to the Legislative Assembly of Ontario. Visit our website at http://www.fao-on.org/en/ and follow us on Twitter at https://twitter.com/InfoFAO.
For further information or to arrange interviews, please contact:
Kismet Baun l (416) 254-9232 l firstname.lastname@example.org l fao-on.org