TORONTO — Ontario’s Aa2 issuer and long-term debt ratings have been upgraded to stable from negative.
Moody’s Investors Service says the revised outlook reflects its prediction that Ontario’s debt burden will continue to modestly improve as the province moves towards balanced budgets and reduces its annual financing requirements.
READ MORE: Moody’s casts doubt on plan to balance Ontario budget by 2017-18
The agency had downgraded Ontario’s debt rating in July 2014 to negative from stable, expressing skepticism that the province could eliminate the deficit by 2017-18.
It now says that with the return to balanced budgets on the horizon, the debt burden is expected to show slight improvements over the medium term, helped by continued expenditure control and increasing revenues.
READ MORE: Deficit fears prompt Moody’s to change Ontario debt outlook to negative from stable
Moody’s also says that despite Ontario’s “ambitious infrastructure spending program,” the province’s debt accumulation should be such that the debt relative to revenues improves over the medium-term.
It says that though the province only expects thin surpluses in the years after the budget returns to balance, it has plans in place to ensure it meets its fiscal targets.
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