The Ontario government debt consists of the liabilities of the Government of Ontario. Approximately 82% of Ontario's debt is in the form of debt securities (bonds, Treasury bills), while other liabilities include government employee pension plan obligations, loans, and accounts payable. The Ontario Financing Authority, which manages the provinces' debt, says that as of March 31, 2020 (for the 2019-20 fiscal year), the Ontario government's net debt is CDN $353.3 billion. Net debt is projected to rise to $398 billion in 2020-21. The Debt-to-GDP ratio for 2019-2020 was 39.7%, and is projected to rise to 47.1% in 2020-21. Interest on the debt in 2019-20 was CDN$12.5 billion, representing 8.0% of Ontario's revenue and its fourth-largest spending area.
Debt breakdown
As of March 31, 2018 the breakdown of Ontario's debt is as follows:
Canadian Dollar Public Bonds: $259.4B (74%) Foreign Currency Bonds: $56.4B (16%) Canadian Dollar Treasury Bills: $18.9B (5%) Canadian Dollar Non-Public Debt: $11.4B (3%) US Dollar Commercial Paper: $2.6B (1%)
The majority of the debt (83.1%) was issued in Canadian currency.
History
The government of Ontario's debt has risen under all governments since 1989.
During the 1990s recession, the Ontario New Democratic Party (NDP) government of Premier Bob Rae increased the total debt from $35.4 billion in 1989-1990 to $90.7 billion in 1994-1995.
Under the Progressive Conservative government of Premier Mike Harris the debt increased from $90.7 billion in 1994-1995 to $132.7 billion in 2002-2003, even while cutting services and downloading formerly provincially-run services onto the municipalities. In the same period, the federal Liberal government cut $7 billion total in transfers to all of the provinces. Following this, during the Harris government period, the federal government restored and actually increased support for the provinces.
The Liberal government of Premier Dalton McGuinty, increased spending on social and energy programs and uploaded services from the municipalities, doubling the total debt from $132.7 billion in 2002-2003 to $276.2 billion in 2013-2014.
The Liberal government of Premier Kathleen Wynne, in part through the sale of Hydro One shares, projected a $600-million surplus in 2017-2018 but instead posted a 3.7 billion dollar deficit.
Change of Accounting Method for Government Assets
According to The Star, a 27-page "scathing" pre-election April 2018 report by Bonnie Lysyk, the Auditor General of Ontario, which was submitted to the Ontario Legislature, said that the accounting methods used by Wynne's liberal government were "lawful" but not "right". AG Lysyk has issued opinions that the government was understating the deficit by several billion dollars, because it was not following Canadian Public Sector Accounting Standards. She was referring to about $11 billion in the government jointly sponsored pension plans (JSPPs)—Ontario Public Service Employees' Union Pension Plan and the Ontario Teachers' Pension Plan—that Wynne's government "counted toward the bottom line". Based on Lysyk's revised accounting methods, these funds are not revenue which dramatically increases the annual debt. Using these revised accounting methods, Lysyk "calculated that the deficit forecast for [2019] is $12.2 billion—not the $6.6 billion Finance Minister Sousa had predicted." For 2020-21 it would be "$12.5 billion, not $6.5 billion." She said "More money will need to be borrowed to pay for the unrecorded expenses even when the government reports an annual surplus or a balanced budget. The government's claim of a surplus was not reflected in any way in the amount of the debt.