Bond rating agency Moody's Corp. has downgraded the province of Ontario's credit rating.
The international agency announced the downgrade from an "Aa3" to an "Aa2" rating on Thursday, citing the province's $14.5-billion deficit in 2018-2019 and projections that it will continue to post deficits for the foreseeable future.
Moody's said the combination of increased debt and slow revenue growth will result in a faster than previously anticipated increase in the province's debt burden. The agency said the province is vulnerable to the impact of interest rates increases, which it projects to jump in Canada over the next three to five years.
Ontario Finance Minister Vic Fedeli responded to the Moody’s decision by blaming the province’s previous government for creating the circumstances that led to the credit downgrade. But Moody’s said that actions taken by the current government to reduce revenue levels will add to the budgetary pressures facing the province in coming years.
