One of the biggest credit rating agencies in the world is downgrading its view of the Nova Scotia government’s finances, saying higher-than-budgeted spending on seniors and health care could make it harder to balance future budgets.
S&P Global says it expects the government’s budgetary performance this year will fall short of expectations and that deficits over the next several years will be larger and last for longer.
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The New York-based firm has lowered its long-term and senior unsecured debt ratings on Nova Scotia from double-A-minus to A-plus, predicting deficits over the next two years will increase the need to borrow money.
Premier Tim Houston’s government projected a deficit of about $697 million last spring, but that has since ballooned to nearly $1.3 billion as of December.
The government says the downgrade has not lowered demand for its 10-year bonds, so there has not been an affect on the province’s cost of borrowing.
Houston’s government has never posted a budget surplus since coming to power in 2021 and S&P warns it may downgrade the province’s finances further if it doesn’t start making progress toward a balanced budget.
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