Ontario's debt rating downgraded to negative by credit agency

An international credit agency has downgraded Ontario's debt rating to negative from stable, as the provincial government gets ready to introduce their new budget.

"The expected path to balance and stabilization of the debt burden, in our opinion, faces greater challenges than before," said Michael Yake, vice president of Moody's Investors Service and lead analyst for Ontario. "Failure to redress the fiscal challenges would add further pressures to a debt burden that has worsened in recent years."

The Liberal government has not yet tabled a new budget following an election victory on June 12. However, the government promised during the run up to the election that its new financial plan will be based on the defunct budget, which was tabled on May 1.

This budget, which Moody's indicated was credit negative, was rejected by members...