The provincial government will be faced with numerous spending and resource demands to address not only the immediate aftermath of the pandemic on health and education but a variety of challenges dealing with the social and economic fabric of the province ranging from housing costs to inequality to business investment which have been exacerbated by the pandemic shock. [...] In the case of sustainability, recent years have seen the provincial Auditor General and the province’s Financial Accountability Office as well as the federal Parliamentary Budget Office all noting the challenges facing the province’s finances – that is having the fiscal resources to meet the expenditure demands being made.4 At the same time, the most recent report of the federal Parliamentary Bud. [...] The challenges facing Ontario’s public finances in the wake of the pandemic are not limited to health and education but are multidimensional cutting across social and economic sectors of the province. [...] The dynamics of deficits and debt over the long term are ultimately shaped by the relationship between interest rates (r) and the growth rate of the economy (g). [...] If during the 2020s, the growth rate of the Ontario economy remains above the effective rate of interest on the net debt, it will be possible for Ontario to continue to run operating deficits and even borrow for capital projects to address some of the issues generated by the pandemic.
- Pages
- 14
- Published in
- Canada
