California has become synonymous with financial dire straits.

In recent years, when discussing the most indebted jurisdictions in the western world, some politicians often included California in the same conversation as Greece and Spain.

While that might have been a bit of a stretch, things were pretty gloomy.

Well, surprisingly — or maybe not — a new study by the Fraser Institute suggests that Canada's most populous province is actually worse off than America's most populous state.

The study, released on Tuesday, notes that by any measure, Ontario's debt level trumps California's.

"To many in the United States and Canada, California represents the epitome of irresponsible government spending coupled with poor cash management," notes the study titled Comparing the Debt Burdens of Ontario and California.

"In this context, discovering that Ontario’s financial position is far more precarious should serve as a wake-up call to Ontario policy makers and citizens alike.

[ Related: Are Canadian governments addicted to debts and deficits? ]

The study's authors compared the two jurisdictions' based on four specific measures: bonded debt (the state or province's indebtedness based on the value of bonds issued), bonded debt as percentage of GDP, bonded debt per capita and net interest expense and percentage of revenues.

If you live in Ontario, it's not a pretty picture.

California Ontario Bonded debt $144.8 billion $267.5 billion Bonded debt as % of GDP 7.6% 40.9% Bonded debt per capita $3,844 $20,166 % of revenue spent on interest 2.8% 9.2%

The story gets worse.

California's financial situation is actually improving thanks, in part, to Governor Jerry Brown's stewardship. A recent New York Times report noted that the State will have a multi-billion dollar surplus this year and is even eyeing some debt repayment.

Ontario, on the other hand, has done very little to tackle their debt: Their projected deficit for this year is approximately $11.7 billion.

"Not only does Ontario have a bonded (gross) debt more than quadruple the relative size of California’s in terms of debt to GDP, but it hasn’t even managed to stabilize its growth," notes the report.

"Policymakers in California have engaged in much more painful decisions to contain their indebtedness, even though objectively they were in a much better position than Ontario currently is."

[ Related: Conservatives accuse Premier Wynne of lying about state of Ontario's finances ]

For their part, the Ontario Liberal government aims to eliminate the deficit by 2017-18. Whether the Wynne government has the wherewithal to actually do that remains to be seen.

But the Fraser Institute claims that Ontario doesn't have enact draconian measures to turn their economy around.

"Ontario’s finances would be restored to a sound foundation if the province merely limited spending on programs (i.e., not counting interest payments) to grow

at 4 percent per year," the report's authors claim.

"Even accounting for population growth and historical rates of price inflation, this cap would still allow an increase of 0.8 percent in spending in per-capita real terms annually. We should acknowledge that currently Ontario is projected to have program spending growth rates well within this range, with growth rates that steadily decrease and even turn negative in a few years.

"If these projections became reality, of course Ontario’s debt problem would steadily improve. Yet these projections represent an extreme departure from recent trends."

Is anyone at Queen's Park listening?

(Photo courtesy of the Canadian Press)

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