|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
The age of Digital Disruption is evolving into the next era – Digital Cohesion, an age in which applications securely self-assemble and deliver predictive services that continuously adapt to user behavior. Information from devices, sensors and applications around us will drive services seamlessly across mobile and fixed devices/infrastructure. This evolution is happening now in software defined services and secure networking. Four key drivers – Performance, Economics, Interoperability and Trust ...
Apr. 28, 2017 09:45 AM EDT Reads: 790
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software in the hope of capturing value in IoT. Although IoT is relatively new in the market, it has already gone through many promotional terms such as IoE, IoX, SDX, Edge/Fog, Mist Compute, etc. Ultimately, irrespective of the name, it is about deriving value from independent software assets participating in an ecosystem as one comprehensive solution.
Apr. 28, 2017 09:45 AM EDT Reads: 600
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
Apr. 28, 2017 09:00 AM EDT Reads: 1,087
SYS-CON Events announced today that CollabNet, a global leader in enterprise software development, release automation and DevOps solutions, will be a Bronze Sponsor of SYS-CON's 20th International Cloud Expo®, taking place from June 6-8, 2017, at the Javits Center in New York City, NY. CollabNet offers a broad range of solutions with the mission of helping modern organizations deliver quality software at speed. The company’s latest innovation, the DevOps Lifecycle Manager (DLM), supports Value S...
Apr. 28, 2017 08:00 AM EDT Reads: 1,180
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
Apr. 28, 2017 07:45 AM EDT Reads: 1,555
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
Apr. 28, 2017 06:45 AM EDT Reads: 1,561
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...
Apr. 28, 2017 06:45 AM EDT Reads: 1,107
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...
Apr. 28, 2017 06:30 AM EDT Reads: 1,403
SYS-CON Events announced today that T-Mobile will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on ...
Apr. 28, 2017 06:15 AM EDT Reads: 1,299
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in compute, storage and networking technologies, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/...
Apr. 28, 2017 05:15 AM EDT Reads: 2,397
With billions of sensors deployed worldwide, the amount of machine-generated data will soon exceed what our networks can handle. But consumers and businesses will expect seamless experiences and real-time responsiveness. What does this mean for IoT devices and the infrastructure that supports them? More of the data will need to be handled at - or closer to - the devices themselves.
Apr. 28, 2017 03:15 AM EDT Reads: 929
SYS-CON Events announced today that DatacenterDynamics has been named “Media 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. DatacenterDynamics is a brand of DCD Group, a global B2B media and publishing company that develops products to help senior professionals in the world's most ICT dependent organizations make risk-based infrastructure and capacity decisions.
Apr. 28, 2017 03:00 AM EDT Reads: 6,262
NHK, Japan Broadcasting, will feature the upcoming @ThingsExpo Silicon Valley in a special 'Internet of Things' and smart technology documentary that will be filmed on the expo floor between November 3 to 5, 2015, in Santa Clara. NHK is the sole public TV network in Japan equivalent to the BBC in the UK and the largest in Asia with many award-winning science and technology programs. Japanese TV is producing a documentary about IoT and Smart technology and will be covering @ThingsExpo Silicon Val...
Apr. 28, 2017 01:15 AM EDT Reads: 9,280
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
Apr. 28, 2017 12:45 AM EDT Reads: 1,703
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
Apr. 28, 2017 12:15 AM EDT Reads: 1,425
Grape Up is a software company, specialized in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market across the USA and Europe, we work with a variety of customers from emerging startups to Fortune 1000 companies.
Apr. 27, 2017 10:45 PM EDT Reads: 2,441
Financial Technology has become a topic of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 20th Cloud Expo at the Javits Center in New York, June 6-8, 2017, will find fresh new content in a new track called FinTech.
Apr. 27, 2017 10:30 PM EDT Reads: 2,464
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Analytic. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
Apr. 27, 2017 10:30 PM EDT Reads: 1,325
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
Apr. 27, 2017 10:15 PM EDT Reads: 1,519
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 & ...
Apr. 27, 2017 10:15 PM EDT Reads: 9,266