|By Marketwired .||
|January 31, 2013 06:32 AM EST||
TORONTO, ONTARIO -- (Marketwire) -- 01/31/13 -- Ontario's debt load is higher than that of California, America's most-indebted state, and could reach 66 per cent of GDP by 2019 unless the provincial government musters the courage to rein in spending, says a new report released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
"California has been roundly criticized by news media and the financial markets for its inability to control spending and reduce deficits. Yet Ontario, with a fraction of California's population and a significantly smaller economy, is carrying a debt load almost two-thirds larger than California," said Jason Clemens, Fraser Institute executive vice-president and co-editor of The State of Ontario's Indebtedness.
"The first priority for incoming Ontario Premier Kathleen Wynne has to be taking action on the province's precarious financial situation. Ontario simply cannot continue spending money it doesn't have; otherwise it will soon be compared to Greece, not California."
The State of Ontario's Indebtedness examines Ontario's deficit and debt from three perspectives: a comparison to California, the future of Ontario's debt if current spending trends continue, and a comparison of Ontario's debt load and spending outlook to that of Greece. Combined, the three chapters detail the extent of the problem facing Ontario and paint a cautionary tale of what could happen if the Ontario government delays taking action.
"Comparisons to Greece may seem farfetched but Ontario's net debt to GDP currently sits at 37 per cent, the same as Greece in 1984," said Niels Veldhuis, Fraser Institute president and co-editor of the report.
"The 2012 Drummond report should have been a wake-up call for the Ontario government, yet the response was a collective yawn and a figurative shrug of the shoulders. Ontario's debt problem is real and unsustainable."
University of Calgary economist Ron Kneebone contributes a chapter to The State of Ontario's Indebtedness calculating that Ontario's net debt will balloon to 66 per cent of GDP by 2019-20 if it maintains the status quo in terms of spending and revenues.
"The failure of past Ontario governments to control spending has added significantly to the province's debt load and today saddles Ontario taxpayers with more than $10 billion in annual interest payments. That's money that isn't available for health care, education or other social services," Veldhuis said.
Kneebone concludes that the Ontario government could hold the debt-to-GDP ratio at roughly 40 per cent by 2019-20 if the province can dramatically slow the growth in spending in both health care and education to match the growth in the economy.
"Health and education spending grew at an average annual rate of seven per cent in the decade prior to the recession, compared to GDP growth of 4.3 per cent. Limiting the rate of growth in health and education spending will not be easy and requires significant reform of both programs," Veldhuis said.
To help put Ontario's debt in context, a second chapter in the report compares Ontario to California, which in 2009 made international headlines as a "fiscal train wreck" and appeared headed for bankruptcy. Ontario and California are measured against one another using a slightly different indicator than is normal: bonded debt. The reason for the alternative measure is that California doesn't publish data on net debt, which is the normally used measure in Canada and elsewhere.
On any comparative measure of bonded debt, Ontario fares much worse than California. Ontario's debt is almost two-thirds larger than California's even though California is much larger in both the size of its economy and its population. As a share of the economy, Ontario's debt (38.6 per cent) is more than five times larger than California's (7.7 per cent). Ontario's per-capita debt ($17,921) is more than four-and-a-half times that of California ($3,833) and Ontario spends more than three times the amount of revenues on interest costs as California.
"The frightening aspect of Ontario's debt is the lack of attention it receives, not just from politicians, but from the media, organized labour, businesses, and just about every single Ontarian," Clemens said.
"Ontario is in a worse situation than California and it will only get worse unless the provincial government finds a way to reduce spending."
The report concludes with a chapter by Lakehead University economist Livio Di Matteo comparing Ontario's fiscal situation to Greece. Di Matteo points out that Greece's net debt to GDP stood at 37 per cent in 1984, the same level as Ontario's today and increased to 66 per cent over the next decade. Since then, Greece's net public debt has spun out of control, reaching 163 per cent of GDP in 2011.
Di Matteo explains that Ontario and Greece share a common trait over the past 30 years: trends in spending and revenues diverged, meaning the long-term trend is towards larger deficits and debt accumulation rather than smaller deficits or even surpluses.
"If Ontario continues spending at its current rate, its net debt will increase to 66 per cent from 37 per cent in just seven years. It took Greece 10 years to experience a similar increase. This highlights the unsustainability of Ontario's current spending trends," Veldhuis said.
Inaction or insufficient spending reforms could mean that somewhere down the road, Ontario could experience a fiscal crisis of Greek proportions. While not there yet, the pain and severity of reform needed in Greece serves as an example to Ontarians about the benefits of proactive reform now before a crisis evolves.
"Neither Ontario nor Greece has been responsible in managing their fiscal situations. Fortunately, Ontario is in a position where it can still restore its public finances to good health without the type of fiscal trauma currently underway in Greece," Clemens said.
The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 86 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org.
Niels Veldhuis (President, Fraser Institute) will be in Toronto Jan. 31 and available for media interviews.
The Fraser Institute - Media Contact
(416) 363-6575 ext. 546 or Mobile: (604) 505-6408
The Fraser Institute - Media Contact
The Fraser Institute
Director of Communications
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
Feb. 12, 2016 03:00 PM EST
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
Feb. 12, 2016 02:15 PM EST Reads: 446
There will be new vendors providing applications, middleware, and connected devices to support the thriving IoT ecosystem. This essentially means that electronic device manufacturers will also be in the software business. Many will be new to building embedded software or robust software. This creates an increased importance on software quality, particularly within the Industrial Internet of Things where business-critical applications are becoming dependent on products controlled by software. Qua...
Feb. 12, 2016 02:15 PM EST
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...
Feb. 12, 2016 01:00 PM EST Reads: 224
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies adopt disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advanced analytics, and DevO...
Feb. 12, 2016 12:30 PM EST Reads: 259
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Avere delivers a more modern architectural approach to storage that doesn’t require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbuilding of data centers ...
Feb. 12, 2016 12:30 PM EST Reads: 105
SYS-CON Events announced today that Alert Logic, Inc., the leading provider of Security-as-a-Service solutions for the cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Alert Logic, Inc., provides Security-as-a-Service for on-premises, cloud, and hybrid infrastructures, delivering deep security insight and continuous protection for customers at a lower cost than traditional security solutions. Ful...
Feb. 12, 2016 11:45 AM EST Reads: 448
Fortunately, meaningful and tangible business cases for IoT are plentiful in a broad array of industries and vertical markets. These range from simple warranty cost reduction for capital intensive assets, to minimizing downtime for vital business tools, to creating feedback loops improving product design, to improving and enhancing enterprise customer experiences. All of these business cases, which will be briefly explored in this session, hinge on cost effectively extracting relevant data from ...
Feb. 12, 2016 11:15 AM EST Reads: 139
SYS-CON Events announced today that iDevices®, the preeminent brand in the connected home industry, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. iDevices, the preeminent brand in the connected home industry, has a growing line of HomeKit-enabled products available at the largest retailers worldwide. Through the “Designed with iDevices” co-development program and its custom-built IoT Cloud Infrastruc...
Feb. 12, 2016 10:00 AM EST Reads: 126
As enterprises work to take advantage of Big Data technologies, they frequently become distracted by product-level decisions. In most new Big Data builds this approach is completely counter-productive: it presupposes tools that may not be a fit for development teams, forces IT to take on the burden of evaluating and maintaining unfamiliar technology, and represents a major up-front expense. In his session at @BigDataExpo at @ThingsExpo, Andrew Warfield, CTO and Co-Founder of Coho Data, will dis...
Feb. 12, 2016 09:30 AM EST Reads: 215
The Quantified Economy represents the total global addressable market (TAM) for IoT that, according to a recent IDC report, will grow to an unprecedented $1.3 trillion by 2019. With this the third wave of the Internet-global proliferation of connected devices, appliances and sensors is poised to take off in 2016. In his session at @ThingsExpo, David McLauchlan, CEO and co-founder of Buddy Platform, will discuss how the ability to access and analyze the massive volume of streaming data from mil...
Feb. 12, 2016 09:00 AM EST
WebSocket is effectively a persistent and fat pipe that is compatible with a standard web infrastructure; a "TCP for the Web." If you think of WebSocket in this light, there are other more hugely interesting applications of WebSocket than just simply sending data to a browser. In his session at 18th Cloud Expo, Frank Greco, Director of Technology for Kaazing Corporation, will compare other modern web connectivity methods such as HTTP/2, HTTP Streaming, Server-Sent Events and new W3C event APIs ...
Feb. 12, 2016 09:00 AM EST
SYS-CON Events announced today that Men & Mice, the leading global provider of DNS, DHCP and IP address management overlay solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. The Men & Mice Suite overlay solution is already known for its powerful application in heterogeneous operating environments, enabling enterprises to scale without fuss. Building on a solid range of diverse platform support,...
Feb. 12, 2016 06:00 AM EST Reads: 253
Eighty percent of a data scientist’s time is spent gathering and cleaning up data, and 80% of all data is unstructured and almost never analyzed. Cognitive computing, in combination with Big Data, is changing the equation by creating data reservoirs and using natural language processing to enable analysis of unstructured data sources. This is impacting every aspect of the analytics profession from how data is mined (and by whom) to how it is delivered. This is not some futuristic vision: it's ha...
Feb. 12, 2016 05:45 AM EST Reads: 460
Silver Spring Networks, Inc. (NYSE: SSNI) extended its Internet of Things technology platform with performance enhancements to Gen5 – its fifth generation critical infrastructure networking platform. Already delivering nearly 23 million devices on five continents as one of the leading networking providers in the market, Silver Spring announced it is doubling the maximum speed of its Gen5 network to up to 2.4 Mbps, increasing computational performance by 10x, supporting simultaneous mesh communic...
Feb. 12, 2016 05:00 AM EST
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, will provide an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data profes...
Feb. 12, 2016 02:30 AM EST Reads: 231
With the Apple Watch making its way onto wrists all over the world, it’s only a matter of time before it becomes a staple in the workplace. In fact, Forrester reported that 68 percent of technology and business decision-makers characterize wearables as a top priority for 2015. Recognizing their business value early on, FinancialForce.com was the first to bring ERP to wearables, helping streamline communication across front and back office functions. In his session at @ThingsExpo, Kevin Roberts...
Feb. 12, 2016 12:45 AM EST Reads: 411
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
Feb. 12, 2016 12:00 AM EST Reads: 290
One of the bewildering things about DevOps is integrating the massive toolchain including the dozens of new tools that seem to crop up every year. Part of DevOps is Continuous Delivery and having a complex toolchain can add additional integration and setup to your developer environment. In his session at @DevOpsSummit at 18th Cloud Expo, Miko Matsumura, Chief Marketing Officer of Gradle Inc., will discuss which tools to use in a developer stack, how to provision the toolchain to minimize onboa...
Feb. 11, 2016 10:00 PM EST Reads: 129
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 ad...
Feb. 11, 2016 03:45 PM EST Reads: 422