Comment 37998

By A Smith (anonymous) | Posted February 13, 2010 at 15:08:43

That's right, buy now, pay later. That's what Bob Rae did to Ontario in the early nineties and it crushed tax revenues. The fact is, increasing public debt does not lead to increased tax revenues, it decreases them.

According to the 2008 financial report pg 2-18...

(d) Total charges for the year for long term debt which are reported on the Consolidated Statement of Financial Activities are as follows:
2008 2007
Principal repayments $ 23,355 $ 19,773
Interest 14,421 13,207
$ 37,776 $ 32,980

(c) Total charges for the year for long term debt - housing corporations are as follows:
2008 2007
Principal repayments $ 2,527 $ 2,424
Interest 3,736 4,018
$ 6,263 $ 6,442

... That's $18.16M every year just on interest. In contrast, the entire 2008 transit budget was $41.3M.

If the city had chosen to save these amounts...

2008
Long term debt – Municipal Operations (Note 7) 329,026
Long term debt – Housing Corporations (Note 8) 74,168

...instead of borrowing them, it could be earning $18.16M every year on interest. That's a difference of $36.32M every single year, or roughly the amount we spend every year on transit.



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