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Throne Speech overshadowed

by credit downgrade

By MPP Toby Barrett

Each additional point increase in Ontario’s interest rate will add another

$3 billion in interest cost on gross debt.
- Economist Jack Mintz

Ontario’s 41st Parliament commenced this July with the Speech from the Throne – delivered by outgoing Lieutenant-Governor David C. Onley, but written by the office of Premier Wynne.
However, a chill was put on the Premier’s activist agenda with the announcement the day before that Moody’s Investors Service had downgraded the outlook on the Province of Ontario’s debt from stable to negative.
As Moody’s indicated, “After several years of weak to moderate economic growth, and higher than previously indicated deficits projected for the next two years, the province is facing a greater challenge to return to balanced outcome than previously indicated.”
This credit rating downgrade could mean higher interest rates on approximately $250 billion in provincial debt securities.  If the interest rate increased to 4.9 percent, an increase of only one point, the province would need to pay roughly $14.161 billion in interest payments on the debt, an increase of $2.89 billion.
According to the 2014-2015 budget, Ontario’s net long-term debt will increase from $269 billion to $289 billion by the end of the year. The budget indicated that the government will pay $11.271 billion in annual interest on its debt.
Interest on the debt is already the third largest expenditure on the Ontario budget, after health and education. And secondly, these interest payments on the debt are the fastest-growing expense in the provincial government. During Question Period, Wellington-Halton Hills MPP Ted Arnott pointed out that over the next three years interest costs will go up eight per cent each year. Remember the average citizen does not benefit from the interest payments made by government.
On the heels of the credit rating downgrade, the Speech from the Throne touted 10 years of $130 billion public infrastructure spending as a critical element in the government’s economic plan, justifying it with a quote from former Bank of Canada Governor David Dodge, “With low interest rates, it is the right time for governments and the private sector to invest in infrastructure.”
However, according to economist Jack Mintz, “If interest rates which have been at a 20-year low levels rise, (the debt) burden would become significantly heavier,” and “if interest rates rise to (even) historical norms, each point increase in interest could add a minimum of $3-billion in annual interest payments. That would severely cripple Ontario’s ability to deliver services.”
And let’s remember David Dodge hasn’t been Bank of Canada Governor since 2008 and many are predicting the low-interest-rate bubble will burst.
As this government states in its Speech from the Throne, “Your government knows that trust is hard-earned, but easily lost.” Kathleen Wynne has promised many times over, to balance the provinces books in three years. I take her at her word although we have yet to see any specific measure that will accomplish that goal.
I will never forget the promise of her predecessor, several times over, to not raise taxes – a promise that was broken by implementing the largest income tax increase in the history of Ontario, the largest consumption tax increase in the history of Ontario, as well as many other hikes in taxes. One can judge future behavior by past behavior.
Historically, both Dalton McGuinty and Bob Rae proved you cannot tax and spend your way out of a recession. For these reasons, in part, I voted against the Speech from the Throne.

Newsroom

Barrett appointed Opposition Agriculture, Food and Rural Affairs Critic

QUEEN'S PARK - Haldimand-Norfolk MPP Toby Barrett has been appointed as the PC Opposition’s Critic for the Ontario Ministry of Agriculture, Food and Rural Affairs.

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Premier’s promise has a $30.2 billion discrepancy

Queen’s Park – Haldimand-Norfolk MPP Toby Barrett took time during Question Period today to remind Premier Wynne that in 2012 she committed to eliminate Ontario’s deficit by fiscal year 2017-18.

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Ontario credit rating outlook downgraded

QUEEN’S PARK – Moody’s Investors Service has downgraded Ontario’s credit rating outlook to negative.

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Legislature reconvenes July 2

SIMCOE – The Ontario Legislature resumes on July 2.

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Back to work at Queen’s Park in July – Barrett

Simcoe – Fresh off the campaign trail, MPPs are being called back to Queen’s Park on July 2nd.

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Lack of full-time Ag Minister reflected in less than adequate budget

SIMCOE – Haldimand-Norfolk MPP Toby Barrett is questioning how farmers are benefiting from a part-time Agriculture Minister given the low profile of farming and rural Ontario in the May 1 budget.

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Local MPP looking for input on Not-For-Profit legislation
Queen’s Park – Haldimand-Norfolk MPP Toby Barrett wants input from local not-for-profit organizations regarding the government’s Bill 85 titled, Not-for-Profit Corporations Act (ONCA).

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Barrett reiterates need for Hagersville bypass

QUEEN’S PARK – Haldimand-Norfolk MPP Toby Barrett renewed the call for a truck bypass in Hagersville during debate in the Ontario Legislature today.

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Why hasn’t Wynne proclaimed Local Food Act?

SIMCOE – Toby Barrett, Haldimand-Nofolk MPP, is questioning why the Local Food Act hasn’t been proclaimed even though it was passed six months ago. The act would increase local food in the broader public sector.

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Deadlines approaching for big game draws

HAGERSVILLE – Draw dates for big game entry draws are approaching.

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Electricity prices going up – again!

SIMCOE – May Day will be more of a distress call than a celebration this year as Ontario residents already struggling with skyrocketing electricity prices will start paying even more.

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Ontario an economic drain on Canada: study

SIMCOE – A recently-released independent study has found Ontario’s lagging economy is dragging down the rest of the country.

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Invasive species bill requires extensive consultation: Barrett

Queen’s Park – During an Ontario Legislature speech on the Invasive Species Act – Bill 167 - Haldimand-Norfolk MPP Toby Barrett reminded homeowners that not all invasive species are aquatic.

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Pull over for flashing green lights

QUEEN’S PARK – April 10 marked the 20th anniversary of the passage of legislation that provided volunteer firefighters the right to use flashing green lights when responding to a fire call.

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College of Trades one year old

QUEEN’S PARK – Haldimand-Norfolk MPP Toby Barrett joined the spirit of thousands of
apprentices across the province who noted the first anniversary of paying new fees to the
Ontario College of Trades with frustration and grief.

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Ontario’s long-term economy forecast is dismal: Barrett

QUEEN'S PARK – Ontario’s Long-Term Report on the Economy is additional proof the
McGuinty-Wynne government has no plan to create jobs or balance the budget, Haldimand-
Norfolk MPP Toby Barrett has charged.

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