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Thursday, 26 April 2012
Moody's downgrades Ontario credit rating
Apr 26, 2012
Moody’s Investors Service has downgraded its credit rating for Ontario.
The credit rating agency announced Thursday that it downgraded the rating to AA2 with stable outlook, down from AA1 with negative outlook.
Moody’s said the government's targets for reining in spending appear "particularly ambitious" and there is a risk the province will not get rid of its $15-billion deficit as scheduled, five years from now.
“The downgrade of Ontario's rating reflects the growing debt burden and the risks surrounding the province achieving its medium-term fiscal plan given the subdued growth outlook, extended timeframe back to balance and ambitious expenditure targets,” said Jennifer Wong, the lead analyst for Ontario and an assistant vice-president at Moody’s.
It also said that there was little chance of the rating improving any time soon, though Moody's did say that if the Ontario government can meet its targets and reduce the provincial deficit that “could put upward pressure on the rating.”