A credit downgrade for Ontario could affect you

Spending in areas like healthcare and education could be impacted

Ontario's budget - it was what thrust the province into an election campaign and was ultimately what put a majority Liberal government in office.

With its high spending proposals over the first year, economists say credit rating agencies may downgrade the province, which will ultimately affect you and your kids.

TD economist Jonathan Bendiner says the lower the credit rating, the more interest the government pays on loans it takes out.

Senior Economist with BMO capital markets Robert Kavcic reveals that means less money for program spending. Which means services in healthcare and education may take a hit.

That's on top of austerity measures planned after this fiscal year to get the deficit down to zero by 2017-18.

Bendiner adds one of the challenges of the Liberals' fiscal plan is that most of the spending control they've proposed are in a couple of years, and they haven't laid out how they will achieve their goals.

Credit rating agency S&P already put a negative outlook on Ontario's economy in 2012.

Leave a comment:

showing all comments · Subscribe to comments
Comment Like
  • 12
  1. This Is What You Wanted posted on 06/16/2014 06:12 PM
    But look on the bright side: At least the 100,000 useless bureaucrats Hudak was going to cut won't go hungry!
    1. Sonny posted on 06/16/2014 06:22 PM
      @This Is What You Wanted S&P is a U$ rating agency that got domestic things wrong in 2008!
      The people have spoken; the Liberals should proceed with their proposed budget and think about raising corporate taxes on banks like TD & BMO
    2. This Is What You Wanted posted on 06/16/2014 06:36 PM
      @Sonny Absolutely, raise taxes! Businesses love to stay and create jobs in provinces where they can't make a profit, right?
    3. Paul posted on 06/16/2014 06:59 PM
      @Sonny Above statement proves that clueless people voted that do not know how the real world works. Do you know how many manufacturing jobs are gone. We are broke and baby this incompetent liberal government it's going for a great show if stupid is what stupid does.... Broke.
    4. G Man posted on 06/17/2014 08:15 AM
      @This Is What You Wanted Unless Wynne cuts the 100,000 jobs anyway. She never said she wouldn't; she just said, "Look at that Hudak, he's going to cut 100,000 jobs!"
  2. Fact Provider posted on 06/16/2014 06:53 PM
    A tempest in a tea pot ...
    A mountain from a mole hill ...

    If there is a downgrade it will land exactly where it was under the Harris regime in 2002 ...
    and the interest rate was much higher then than it is now.

    Relax ... it isn't the end of the world as we know it.
  3. Fact Provider posted on 06/16/2014 07:42 PM
    I accurately predict negative outcomes, and try to spin them thusly as positive outcomes!
  4. Fact Provider posted on 06/16/2014 08:19 PM
    Still trying to be me ??

    Good luck with that - poor uneducated Contard.
  5. Ernie posted on 06/16/2014 08:36 PM
    @ Fact Provider
    Here are REAL facts
    prior to Bob Rae taking office, Ontario' s debt was 35.4 billion

    In the 4 years Bob Rae was in power, he added 55.3 billion in debt

    In the 9 years of PC government including the Mike Harris years, the PCs added 41.9 billion in debt including the effect of his cutbacks.

    In 11 years of Liberal government led by McGuinty / Wynne, the Liberals added another $155.5 billion in debt.

    While it is true that the borrowing costs in 2014 are around 4% compared to 7% at the end of the Harris era; if you look at the total dollars borrowed and total interest paid, Ontario pays more total money to service debt now than they ever did.

    Minor changes in interest rates will now impact Ontario much harder than it ever did in the past. Hang on - Wynne is headed for a Bob Rae type rebellion within her term.

    I predict teachers will be taking Wynne days !
    1. Fact Provider posted on 06/17/2014 05:58 AM
      @Ernie Rae days - Not so much a prediction on your part as a recognition of a practice that worked well.

      I bet Hudak and the rest of the Tea Part nitwits wish they had tried that tactic instead of "I'll eliminate 100,000 jobs and create a million jobs"

      Wynne days will also work if need be.
    2. MichaelP posted on 06/17/2014 08:52 AM
      @Ernie "I predict teachers will be taking Wynne days !"

      Nice prediction, since it already happened last year.
    3. AC posted on 06/17/2014 09:49 AM
      @Ernie the federal debt has been doubled since the conservatives took power as a point also. i'm not an economist but sometimes spending and investing as Jim Flaherty proved is the right way to go and i'm not a conservative
showing all comments

Sign Up For Breaking News Alerts

Becoming a member only takes 60 seconds! Members get access to exclusive information and products that non-members do not, including concert ticket presales, trips, advance notice on upcoming entertainment events, movie screening passes, music giveaways and more!

Login with Facebook

Stay connected 24/7! Receive breaking news and programming alerts right to your inbox. CLICK HERE to sign-up.

Today's Poll

A new poll from Mainstreet Technologies has found that 64% of Canadians are in support of the CRTC's decision to move towards "pick and pay" TV. Are you in favour of the idea?

Voting is restricted to one vote every 24 hour(s) VoteResults

Top Stories