S&P said Monday that while Ontario continues to beat its fiscal targets and expects to close its operating budget gap by fiscal 2018, it will still have to contend with sizable yearly after-capital deficits given its large net capital spending plans.
The rating agency said the downgrade comes with a stable outlook, reflecting its belief that Ontario will continue to make slow progress in reducing its deficit.
Ontario Finance Minister Charles Sousa said he agreed with the S&P's forecast that the province is on track to eliminate its deficit by 2018.
Sousa said he believes the S&P assessment views Ontario as having a strong, diversified economy despite recent slow growth.
But Progressive Conservative Leader Patrick Brown said the rating decline is proof that the government is mismanaging the economy.