Credit rating agency Moody’s downgraded Ontario’s debt rating, citing concern that Canada’s most populous province might not be able to meet its deficit targets due to slow growth and ambitious spending plans, Reuters reports. The agency lowered its rating to Aa2 with stable outlook, from Aa1 with a negative outlook. The move, which could make borrowing more expensive for one of the world’s largest non-sovereign issuers of debt, follows negative action previously taken by credit rating agencies Standard and Poor’s and DBRS. On Wednesday, S&P changed its outlook on Ontario to “negative” from “stable,” though it maintained its “AA-” rating. DBRS downgraded the province’s rating in the fall of 2009, as the financial crisis hit Ontario’s key manufacturing sector.
As the CBC indicated, Moody is now rating Ontario’s debt on par with that of the Maritimes and Quebec. As Maclan’s noted last month, provincial and territorial debt now accounts for nearly half of Canada’s total fiscal burden, up from 34 per cent 20 years ago.