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The Shocking Truth about the Ontario Debt

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By Edited Jun 12, 2016 2 4
Ontario Debt
Credit: http://www.freeukdebtadvice.com/wp-content/uploads/2012/10/wipe_our_debt.jpg

The government’s mismanagement of public money is not something that’s new. What is new is that the Ontario debt profile is not as healthy as many people think or can even fathom. Just because it’s not front page news, doesn’t mean it’s not an issue.  I predict that Ontario’s debt problems will be more widely talked about in the near future when the debt is no longer contained or when the interest rates are too high to service it meaningfully. It’s coming home to roost and all Ontarians better take heed.

Greece, California, Cyprus, Iceland, Italy, Spain, Ireland, Portugal. The one common theme of these countries/jurisdictions is that they have been on the front page news about their massive debts. You can now add Ontario to that list.

Comparing Apples to Apples

The shocking truth about Ontario’s Debt, is not just simply that Ontario is joining the ranks of that laundry list of indebted countries around the world, but that Ontario has joined the ranks. The way to look at it is by comparing the debt numbers with the same metric. In this case, let’s take a look at debt per capita (or amount of public debt owing per person).

Asides from the all the noise that’s out there about total debt and how big the debt is the size of the massive debt, comparing the debt per capita is the best measure. This means that if the debt had to be collected right now, single one of us is are on the hook for this amount.

Debt per capita serves as a great measuring stick.  It can more accurately measure each jurisdiction regardless of the total number of residents.  For example, a 5 million people region should probably have less debt than say a country with 30 million people.  More mouths to feed, more debt.

When we compare debt per capita, the total amount of debt is no longer relative as an arbitrary amount of people who used the money, it’s dividing it out evenly for exactly the amount of people living there.

Ontario's Debt Per Capita

Below is Ontario's public debt profile:

Ontario’s debt per capita:   $17,625 [1]

Now think about this for a second. This public debt means that everyone single person that lives there owes $17,625. Right off the bat, you own $17,625! Just think that you are poorly by 17,625. That’s a good chunk of money that could’ve gone for a down payment or a good part of a decent car.

Check out the Ontario Budget when you get a chance!

Now, let’s compared the debt per capita of Ontario and California.

Debt Watch: Ontario versus California

Let’s start by comparing Ontario and California because they are roughly similar in that they are both a jurisdiction of a country.

California’s debt per capita:   $3,182 [2]


Rub your eyes again and look at those numbers.  It’s not a typo, it’s not a miscalculation as these numbers are taken directly from the financial statements their own finance departments produced.  That means that Ontario’s public debt per capita is roughly 5 times more than California’s! When put in this context, we can see how grossly indebted Ontario is.

Debt Watch: Ontario versus Countries

Entire countries are a little different insofar that it has far more expenses than any one jurisdiction such as Ontario or California. Below was what I was able to find their debt profiles: 

Greece’s public debt per capita:     $38,000
Spain’s public debt per capita: $17,000
Portugal’s public debt per capita: $16,000
Iceland’s public debt per capita: $43,000
Ireland’s public debt per capita: $35,000
Italy’s public debt per capita: $38,000
U.S. Public debt per capita: $38,000



Debt management amongst the worst of the lot happen to be Iceland, Greece, Italy, Ireland and the United States. That’s who I would call the top tier debt profile countries with debts per capita over $30,000. The second tier include Spain and Portugal. And this is the group that Ontario belongs to. The reality is that it doesn’t take much to graduate to the next tier. All it takes are two things:

1. Run a deficit year over year
2. Interest Rates rise

Ontario is already set to run a deficit for the next 5 years.  Interest rates are to going to rise sometime in the next few years.  Currently it already costs taxpayers 10 billion dollars to service the debt.  That means we are paying 10 billion just in interest.

This is simply not sustainable.



Jun 9, 2013 9:51am
They need to take serious steps to fix it.
Jun 9, 2013 10:35am
Debt, to most people, is a normal situation. The borrower is slave to the lender. Debt means not being able to take breaks, not being able to quit a job, not being able to retire. Debt = slavery.
Jun 10, 2013 4:10pm
Hi Nikon,

There needs to be serious steps to avoid a train wreck. But I find that people often don't act less it is in their backyard; it's just human nature. I hope that people can start talking about and this can start a public discourse on the direction that the provincial government should take to remedy this situation before it's too late and we have to make more drastic cuts and take more draconian measures.

Thanks for your comment!
Jun 10, 2013 4:13pm
Thanks for your comment NU Law Student.

Borrowing money is something that's "normal". We all do it to pay for things like school; you're a student so you would know. There is a lot of talk out there about how charging people interest is the culprit, but I think that's extreme. Interest helps you keep your borrowing from being too overstretched. The problem sometimes is that when the borrow has no intention of paying back and happens to always stay indebted. And to be fair, it usually happens over the course of years and in this case, decades.

I think being in perpetual debt is akin to slavery.
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  1. "Ontario's Quarterly Finances 2013." Ontario Ministry of Finance. 10/05/2013 <Web >
  2. "California Financial Statements." California Finance Dept. 10/05/2013 <Web >
  3. "The World Debt Clock." The Economist. 10/05/2013 <Web >

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