TORONTO - Ontario and its ballooning debt are on a collision course with fiscal reality, a new Fraser Institute report suggests.
The province's net debt could swell to 66% of GDP by 2019-20 if the government doesn't slow the rate of health and education spending adopted over the past decade, the report's authors conclude.
The State of Ontario's Indebtedness -- Warning Signs to Act, says the province is in far worse shape debt-wise than cash-strapped California, and could use the lessons learned from Greece to avoid a similar fiscal fate.
The report states that Ontario's total debt as of 2010-11 was $236.6 billion, compared to California's $143.9 billion.
"Ontario's bonded debt is almost two-thirds larger than California's even though California is a much larger jurisdiction in terms of both the size of its economy and its population," the report states. "Simply put, across every comparable measure available, Ontario's indebtedness is markedly worse than California's.
"For those Ontarians who look at California in puzzlement over its inability to solve its deficit and debt challenges, this ... strongly encourages them to look inward at the severity of their own indebtedness."
California differs from Ontario because it has strict limits on how much debt it can accumulate.