|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 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
Nov. 28, 2014 08:00 AM EST Reads: 1,654
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
Nov. 27, 2014 04:00 PM EST Reads: 1,943
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
Nov. 27, 2014 04:00 PM EST Reads: 2,042
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...
Nov. 27, 2014 03:00 PM EST Reads: 2,207
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happens, where data lives and where the interface lies. For instance, it's a mix of architectural styles ...
Nov. 27, 2014 03:00 PM EST Reads: 2,047
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and assessments, including a decade of leading incident response and digital forensics. He is co-author of t...
Nov. 27, 2014 01:00 PM EST Reads: 2,104
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
Nov. 27, 2014 11:00 AM EST Reads: 1,910
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrategies, will examine why IT must finally fulfill its role in support of its SBUs or face a new round of...
Nov. 27, 2014 10:00 AM EST Reads: 1,927
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, described an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-device experiences grounded in people's real needs and desires.
Nov. 27, 2014 08:00 AM EST Reads: 1,885
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps, abiding by privacy concerns and making the concept a reality. These challenges can't be addressed w...
Nov. 27, 2014 07:45 AM EST Reads: 2,029
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. According to a recent IDG Research Services Survey this rate of traffic will only grow. What's driving t...
Nov. 27, 2014 07:00 AM EST Reads: 2,084
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
Nov. 27, 2014 06:45 AM EST Reads: 2,145
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
Nov. 27, 2014 06:45 AM EST Reads: 2,066
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) i...
Nov. 27, 2014 04:00 AM EST Reads: 1,734
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Nov. 27, 2014 04:00 AM EST Reads: 1,794
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
Nov. 26, 2014 02:00 PM EST Reads: 2,071
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
Nov. 24, 2014 07:00 PM EST Reads: 2,246
Bit6 today issued a challenge to the technology community implementing Web Real Time Communication (WebRTC). To leap beyond WebRTC’s significant limitations and fully leverage its underlying value to accelerate innovation, application developers need to consider the entire communications ecosystem.
Nov. 24, 2014 12:00 PM EST Reads: 2,003
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
Nov. 24, 2014 11:00 AM EST Reads: 2,354
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.
Nov. 24, 2014 09:00 AM EST Reads: 2,228