Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Standard & Poor’s on Monday opted to leave the province’s rating unchanged, at AA– for long-term debt and A-1+ for short term credit with a negative outlook, sparing the Liberal government a downgrade just a week after reintroducing its budget.

The Canadian Press

A major credit-rating agency is warning Ontario must do more to either control spending or jack up revenues if it hopes to get its budget back to balance.

Standard & Poor's on Monday opted to leave the province's rating unchanged, at AA– for long-term debt and A-1+ for short term credit with a negative outlook, sparing the Liberal government a downgrade just a week after reintroducing its budget. In a note, the agency cautioned that it could lower the province's rating in the next year if it does not see progress towards the balanced budget.

"We believe Ontario's current budget plan to restore budgetary balance by fiscal 2018 may not be achievable unless the province implements additional revenue measures or takes more aggressive cost-containment initiatives in the next three fiscal years," the note read. "We expect to see these measures introduced in the coming months following the June election of a majority Liberal government."

Story continues below advertisement

The Liberal plan to erase red ink mostly involves aggressively controlling costs: the budget promises the government will find hundreds of millions of dollars in savings, and limit spending growth to just 1.1 per cent. There are few details, however, on where cuts will be made. The budget also hikes income taxes on people making over $150,000 per year and jacks up levies on airplane fuel and tobacco.

S & P's doubts that it will be possible to squeeze spending to the extent that the Liberals are promising, making a bigger tax hike necessary.

"In our opinion, it is a challenge for any province to sustain this low growth rate in spending, due to continuing pressures in health care and education. As a result, the government will likely have to look to revenue measures to bridge the gap," the note said.

Ontario's rating is the third-highest Standard & Poor's category. Among Canadian provinces, it is two notches below triple-A rated British Columbia, Alberta and Saskatchewan, and one step up from Quebec.

The province also holds the third-highest rating with Moody's. That agency two weeks ago changed its outlook on the province to "negative," warning that it must see actual progress on erasing the deficit, and not just promises.

Economists and finance experts generally agree that the province's debt is manageable. Although it is high in absolute terms – one of the largest among sub-sovereign jurisdictions – the province's debt-to-GDP ratio is in the mid-range, at 39 per cent. The province's economic growth, however, has been sluggish, meaning the government cannot rely on economic expansion to erase the deficit.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies