Fitch Downgrades Ontario Long-Term Debt, Notes Risks On Path To Balanced Budget.
TORONTO – Fitch Ratings downgraded Ontario’s long-term debt rating Friday, highlighting “risks” on the path to the Liberal government’s target of balancing the budget by 2017-18.
The rating agency cut its long-term issuer default rating to AA- from AA, saying “difficult actions” will be necessary for the province to achieve its target of eliminating the $12.5-billion deficit.
“Budget options are likely to prove more limited given the extent of actions taken to date and use of one-time actions to achieve targets, in Fitch’s opinion,” the agency said.
“The downgrade to AA- reflects Fitch’s concern that risks remain to achieving its goals and both debt burden and the accumulated deficit will remain significantly elevated.”
Ontario Finance Minister Charles Sousa said the government remains committed to eliminating the deficit by 2017-18, but the Fitch announcement underscores the challenges the province’s economy faces.
