POLITICS

Moody's casts doubt on Ontario's plan to balance books by 2017-18

02/23/2015 01:03 EST | Updated 04/25/2015 05:59 EDT
TORONTO - Moody's says Ontario is going to have a tougher time balancing its books than Quebec, even though that province's target is earlier than Ontario's.

The credit ratings agency says in its latest report that Ontario is in a more challenged position because its debt burden has been rising since 2009 and it faces "larger ongoing deficits."

Moody's also expresses skepticism that Ontario's planned spending restraints won't be enough to return the province to balance.

Ontario, with an Aa2 negative outlook, is aiming for a balanced budget in 2017-18, while Quebec, with an Aa2 stable outlook, has a target of 2015-16.

Moody's Michael Yake says Ontario's deficits and "its tendency to delay the most significant cost-cutting measures" to the latter years of its plan for returning to balance increase the risk that its goal won't be met.

Finance Minister Charles Sousa says the report reinforces the challenges he has been talking about for the past two years, but he insists Ontario will eliminate its $12.5-billion deficit on time.

"What we have to also recognize is that Ontario, in relative terms to other provinces, actually has a lot more flexibility by way of tools that we have yet to enact, if at all," Sousa said Monday.

"What I want to do is ensure we put our house in order by looking at our spending, looking at repurposing some of our assets to reinvest in the things that make us even more competitive long-term."

He would not rule out raising taxes.