October 16, 2012 / 6:29 PM / in 5 years

TEXT-S&P: Province of Ontario ratings unchanged by Q2 results

Oct 16 - Standard & Poor's Ratings Services said today that the Province of
Ontario's (AA-/Negative/A-1+) second-quarter fiscal results released yesterday
revealed that it remains on track for a balanced budget in fiscal 2017-2018,
despite headwinds from a slowing global economy. Standard & Poor's considers
these results to be in line with its expectations, and views them as neutral for
both the ratings and outlook on the province. In addition, yesterday the
province's premier, Dalton McGuinty, announced the prorogation of the provincial
legislature and his own resignation. 

The fiscal update revealed that revenues and expenses together were C$400 
million better than forecast in the fiscal 2013 budget. As such, the province 
is currently on track for a lower-than-expected C$14.4 billion deficit for 
fiscal 2013. Cumulatively since the fiscal 2012 budget, Ontario has bettered 
its fiscal projections by C$2.5 billion and, as such, the results achieved to 
date remain in line with our expectations. 

The premier's resignation and prorogation of the legislature during a time of 
heightened global economic risks in our opinion introduce some uncertainty 
over the province's fiscal targets in the medium term. In our view, increased 
uncertainty within the context of a minority government may raise the prospect 
of a delay in Ontario reaching fiscal balance by its fiscal 2018 target. 
Standard & Poor's will continue to monitor the effects of these developments 
on the government's efforts to achieve its objectives for labor negotiations 
and its fiscal targets.

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