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Better financial management is needed in Ontario

Better financial management is needed in Ontario

June 15, 2024

There is a level of hypocrisy on how our Ontario government implements financial management, writes Peter Watson.

On a positive note, starting next year Ontario students must achieve 70 per cent on a financial literacy test as a requirement to graduate from high school. Education Minister Stephen Lecce said one of the skills taught will be managing a household budget.

Managing a household budget is important for every family. Managing the province’s budget is important for all Ontarians.

The recent Ontario budget forecasted our annual deficit will increase by three times to just under $10 billion. The deficit will be added to our current mountain of debt we have accumulated through financial mismanagement regardless of which party was in office.

Now for the hypocrisy.

After the budget the Ontario government announced the decision to unwind a 10-year agreement that was due to expire in 2025 allowing beer to be sold in local stores one year ahead of schedule.

The cost to the government of shortening the existing contract was reported to be $225 million, although many have argued the cost is much higher.

Please help me understand the financial logic of spending several hundreds of millions of dollars just to allow us to buy beer at a different location one year ahead of schedule.

That appears to be financial mismanagement. Was that decision politically motivated for the benefit of politicians as opposed to helping those of us who live in Ontario?

The first rule of budgeting is do not spend more money than you take in. The second rule is spending money on what is most needed.

There are more pressing issues than beer.

Items like having timely access to medical services are a much greater priority. Some families do not have a family doctor. Plus waiting lines at Ontario hospital emergency departments are often too long.

Fiscal management including good budgeting should apply to both high school students and government.

Peter Watson, of Watson Investments MBA, CFP®, R.F.P., CIM®, FCSI offers a weekly financial planning column, Dollars & Sense. He can be contacted through ACPI is a full-service investment dealer and a member of the Canadian Investor Protection Fund (“CIPF”) and the Canadian Investment Regulatory Organization (“CIRO”).  Investment services are provided through Watson Investments, an approved trade name of ACPI.  Only investment-related products and services are offered through ACPI/Watson Investments and covered by the CIPF. Financial planning services are provided through Watson Investments. Watson Investments is an independent company separate and distinct from ACPI.