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The Ford government’s spending plan is getting a nod from credit agencies.
According to a statement released by Fitch credit agency on Wednesday, the provinces credit outlook has gone from negative to stable, and it is because of the Premier’s spring budget which promises to balance the books in 2023-24.
The overall rating was held at AA-.
The rating change is not surprising as the agency previously downgraded the province’s rating due to the colossal spending budget released by the Wynne Liberals last year.
In response to the outlook upgrade Finance Minister Vic Fedeli released the following statement:
The steps our government has taken to start Ontario down the path to fiscal sustainability are starting to bear fruit.” During a meeting with Fitch officials recently, we explained our five-year path to balance, our debt burden reduction strategy, and the initiatives we have already taken to control runaway spending. At the same time, our government is creating a climate that is open for business and open for jobs by lowering taxes, providing training programs that are more focused, and the elimination of unnecessary regulations and red tape. For these and other reasons, Fitch concluded that Ontario’s risk profile was “stronger”. This comes two days after DBRS confirmed the Province of Ontario at AA (low) with trends on all ratings at Stable. DBRS stated that “The ratings are supported by the Province’s diverse and growing economy, effective debt and liquidity management practices as well as the improving direction of fiscal policy.” They further added, “The change in fiscal policy is clearly positive from a credit perspective and there appears to be a genuine and credible commitment to addressing the Province’s budget imbalances and gradually reduce the debt burden.”
While the minister’s statement puts the province in the right direction, Ontario’s taxpayers and social service users are not in the clear yet.
According to Ontario’s financial accountability watchdog, in order to balance the budget by 2023-2024, the province will need to maintain fairly low spending levels as well as find $6 billion more in potential savings.
What do you think about the province’s overall financial situation?
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