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Finance Minister Dwight Duncan, who has said he will not seek re-election and is expected to resign his Windsor MPP seat sometime in the next few weeks, gave bookend speeches at the start and end of the Liberal leadership race won by Kathleen Wynne that warned the slate of candidates of the difficult economic picture facing the province. Even as he touted in a speech last week that Ontario’s 2012-13 deficit is now forecasted to be $11.9-billion, about $3-billion lower than expected in last spring’s budget, Mr. Duncan said Ontario will have to double its current rate of spending cuts if it is to curb the deficit by 2017-18.

But the Finance Minister also said the Liberals have avoided more drastic measures taken in states like Michigan and California, which have fired public-sector workers by the thousands while dealing with their own budget woes.

The Fraser Institute report, however, argues that from a debt perspective California is in much better shape than Ontario. It says the province “is in a worse position than California on every measure of indebtedness.” Using 2010-11 figures for bonded debt, the report says Ontario had almost $240-billion compared with $144-billion for California, even though the latter has a much larger economy and population. Once the population is factored in, California’s per capita bonded debt of $3,833 is about a fifth of Ontario’s ($17,922).

“For those Ontarians who look at California in puzzlement over its inability to solve its deficit and debt challenges, [we] strongly encourage them to look inward at the severity of their own indebtedness,” the authors note.