Late last week, bond rating firm Moody’s announced a downgrade of Ontario’s credit rating from Aa3 to Aa2, amid the province’s $14.5-billion deficit in 2018-19.
Moody’s also forecast that Ontario will continue exhibiting deficits in the next few years, mainly due to the impact of increasing debt loads and slowing revenue growth.
The agency further warned that the province will feel additional pressure from the actions taken by the current government to reduce revenue levels – a factor that the Opposition NDP decried in what has been called the Progressive Conservatives’ “economic meddling”.
“[Premier Doug] Ford is giving tax breaks to the richest corporations and cash handouts to polluters — and the rest of us will pay for it,” NDP finance critic Sandy Shaw wrote in a statement, as quoted by The Canadian Press.
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On the other hand, Finance Minister Vic Fedeli apportioned a larger part of the blame to the previous Liberal government, which he said brewed the perfect storm of instabilities that eventually culminated in the downgrade.
Moody’s also predicted that Ontario’s present troubles might be just the beginning, as the province is expected to bear the greater brunt of future interest rate hikes, possibly over the next 3 to 5 years.