The Ontario 2014-2015 Fudgit

In Ontar-I-Owe we updated the actual or total debt figure projections for 2013-14. Based on the numbers available from the Ministry of Finance, the figure was $292.8 billion (B). Looking at the 2014-15 budget released today we turn to Chapter 6 where the numbers reside. Table 3 contains the Total Debt figures which are the key ones for analyzing Ontario’s debt position. Consider Table 1 below taken from Table 6.3 of the Budget paper. The current number for the last fiscal year stands at $295.8 B.

Table 1. Total debt by fiscal year with year over year change, all in billions of dollars.

Year 2012–13 Interim 2013–14 Plan 2014–15
Total Debt 281.065 295.770 310.549
YOY Difference 23.787 14.705 14.779

The composition of this debt is shown in Chart 6.9, Total Debt Composition, which is consistent with picture of the Province’s Consolidated Debt Portfolio shown by the Ontario Financing Authority. As we have noted in past writing, the total debt or simply debt in common terms, is the amount of money that is owed third parties and the amount of money on which interest is paid. The government however will never use this figure. They prefer the lesser Net Debt which is optically better. For 2014-15, the net debt is estimated to be $289.251 B. The media will only use this number.

In Table 6.1, the government states that the 2013-14 deficit will be $11.3 B. We would be more inclined to view the year over year increase in the total debt of $14.7 B as the real deficit. It is certainly the extra borrowing the province incurred. In any case, in Table 6.2, they show a $12.5 B deficit for this fiscal year.

The Finance Minister is quoted in theStar.com: We are committed to balancing the budget in 2017. Someone needs to tell him that he has to reduce deficits to achieve this goal and not increase them, even for the purpose of buying an election.

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