Ontario’s net debt expected to exceed $300 billion in Thursday’s budget

Ontario is forecasting a final 2015-16 budget deficit of $5.7 billion, $2.8 billion less than forecasted in last year’s budget.

“During this era of record low interest rates, governments in Canada have accumulated significant debt, which could pose serious risks to their budgets if interest rates begin to rise and return to normal levels, causing debt interest payments to increase”, said Jean Francois Wen, professor of economics at the University of Calgary and author of The Impact of Higher Interest Rates on the Cost of Servicing Government Debt.

Sousa stressed to reporters last Tuesday that while Queen’s Park and Ottawa “have agreed to enter into a national dialogue to enhance the Canada Pension Plan”, Ontario’s stand-alone scheme will still go ahead.

Ontario Liberal Finance Minister Charles Sousa said the new grant will help students and their families make sense of a system that is now “very complex and convoluted”.

The Liberal government has promised to dedicate the proceeds of asset sales, such as the Hydro One IPO, to the Trillium Trust, to fund their pledge of spending $134 billion over 10 years on infrastructure.

But the government will also be eliminating the Children’s Activity Tax Credit and the Ontario Home Renovation Tax Credit saving about $70 million a year.

Ignoring the expected $1.9-billion in cap-and-trade revenue allocated to a variety of projects, the big changes are an increase in expected spending of $2.3 billion, largely offset by a reduction in debt interest costs of $700 million and a $1.3-billion increase in funding from the federal government.

The province sought to provide some relief to drivers by eliminating the $30 fee on the Drive Clean program.

“We know that people who have a degree or diploma can expect to earn more than people who don’t”.

“It’s the price [Ontarians] pay” for a sustainable environment, Sousa said.

Allan O’Dette, president of the Ontario Chamber of Commerce, said he was pleased to see a path to balance, but didn’t see much of a plan to pay down the debt. And the government has raised the tobacco tax from 13.97 cents to 15.47 cents per cigarette, representing an increase of $3 in the price of a carton of 200 cigarettes. “We are in the home stretch”.

More details of the cap-and-trade plan are expected to be revealed in Thursday’s Ontario budget.

Progressive Conservative leader Patrick Brown says there remains a problem with the “credibility” of the Liberals’ budget numbers.

That was one of the “good news” headlines that came out of the 2016 provincial budget which for the most part outlined a more expensive life for middle-class Ontarians.

Meanwhile, the minimum price of a bottle of wine will go up to $7.95 over the next three years.

If you’re going to introduce carbon pricing, the most costly and least effective way for the public is to impose a cap-and-trade system that hands out free carbon credits to big polluters and is not revenue neutral.

The province is bringing in the cap-and-trade program on January 1, 2017, which will create limited tradable allowances in the carbon market.