OP-ED: Ford needs to fix Ontario’s finances with the 2026 budget
"Ford needs to show some leadership and put an end to Ontario’s borrowing binge."
Author: Noah Jarvis
Ontario’s debt is like a frog in a pot set to low heat.
And that pot is about to boil over.
Ontario’s debt has gone up single year for two decades, no matter who’s in government.
This year, the Ford government is adding $32.7 billion to the provincial debt, ratcheting total government debt up to $459 billion.
That means that every Ontarian owes the equivalent of $28,000 in government debt.
Government debt is like your family credit card. If the province spends more money than it collects, the government pulls out the credit card and starts borrowing. But every dollar the government borrows today is a dollar plus interest that taxpayers are on the hook for down the line.
Ontarians are shelling out $16.2 billion in interest payments to service the government’s debt in 2025-26. If debt interest payments were a ministry, it would have the fourth largest budget in the province.
That’s $1.35 billion a month going to bondholders on Bay Street instead of being spent on the core services or tax cuts to put more money back in your pockets.
And the problem is set to get worse, as debt interest payments will rise 5.6 per cent per year, according to the Financial Accountability Office.
Ontarians understand that rising debt interest payments are a problem. Three quarters of Ontario residents say they are concerned with the cost of debt interest, according to a recent Leger poll.
Debt keeps going up because government is spending too much money.
Government spending has gone up by 64.3 per cent in the past decade. Does anyone really think they’re getting 64 per cent better service from the Ontario government than they were a decade ago?
Meanwhile, revenue has gone up 58.3 per cent from $141.3 billion to $223.7 billion.
You can’t run a household budget, a lemonade stand or a province for very long if your expenses keep going up faster than your revenues.
If government spending had been capped at the rate of inflation plus population growth a decade ago, the government would currently have a $12.5-billion surplus. Instead, the Ford government is currently running a $13.4-billion deficit.
All that debt has left the provincial economy floundering a tub of boiling water.
Ontario’s economy has suffered from chronically slow growth for the past two decades, suffering the worst per-person economic growth of any province from 2000-2022.
This means that the quality of life for everyday Ontarians has been stagnating relative to the rest of the country. In fact, quality of life has worsened for many Ontarians.
Food bank usage has increased by 165 per cent in the past five years. One-in-four food bank users are employed. Even with good jobs, families are having a hard time putting food on the table.
And if the government continues down this path, debt interest charges will continue to rise and force the government to cut core services or hike taxes, whether it wants to or not.
That’s exactly what happened in the 1990s, when then-premier Mike Harris made cuts to social programs. The federal government did the same thing in Paul Martin’s 1995 budget. An NDP government in Saskatchewan had to close 52 of that province’s rural hospitals in the 1990s as debt interest started eating into the health budget.
The 1990s taught us some important lessons: governments cannot endlessly pile up billions of dollars of debt and expect the numbers to balance out in the long run. Bondholders are eventually going to want their money back.
Forced spending cuts can be avoided if Ford begins exercising some spending restraint in the 2026 budget.
Ford needs to show some leadership and put an end to Ontario’s borrowing binge.
Noah Jarvis is the Ontario Director of the Canadian Taxpayers Federation.