Ontario Finance Minister Charles Sousa ignores Moody’s downgrading the province’s financial outlook to “negative”, focusing on its unmoved rating instead #onpoli pic.twitter.com/Mof1xCok1K
— NEWSTALK1010 (@NEWSTALK1010) April 18, 2018
A key ratings agency has downgraded its outlook on Ontario’s finances to “negative” from “stable” in light of the Liberal government’s plan to run six consecutive multibillion-dollar deficits.
Moody’s Investor Services says spending pressure will challenge the province’s ability to “sustain balanced fiscal results” over a number of years.
Moody’s also says financing requirements on the province’s debt —projected to be $325 billion in 2018-2019 — will be larger than previously believed, leading to a faster increase in interest expenses.
Premier Kathleen Wynne defended the government’s pre-election budget, which will run a $6.7-billion deficit in 2018-2019, saying Moody’s change wasn’t a credit downgrade, which would effect borrowing costs for the province.
Speaking with reporters Wednesday, Finance Minister Charles Sousa blew off questions about the darker outlook, focusing instead on the fact that the province's ratings held steady.
Moody’s maintained Ontario’s Aa2 issuer and Aa2 senior unsecured long-term debt ratings despite the change in outlook.
The opposition Progressive Conservatives criticized the government, saying interest on the province’s debt, projected at $12.5 billion this year, is already crowding out services like health care, education and infrastructure upgrades.
Ontario heads to the polls on June 7.
with files from Siobhan Morris