'Bankers aren't freaking': Sousa downplays Moody's negative outlook

By Antonella Artuso, Queen's Park Bureau Chief

Finance Minister Charles Sousa talks about the upcoming budget at Queens Park on July 2, 2014. (Dave Abel/Toronto Sun)

Finance Minister Charles Sousa talks about the upcoming budget at Queens Park on July 2, 2014. (Dave Abel/Toronto Sun)


Ontario has its financial challenges well under control, Finance Minister Charles Sousa says.

“The bankers aren’t freaking,” Sousa said Thursday, the day after Moody’s Investors Service changed the outlook on the province’s debt and issuer ratings to negative from stable.

The Kathleen Wynne government is balance the books by 2017-18 as planned through spending restraint and strategic investments in the economy, he said.

The province is currently spending $12.5 million more than it makes in revenue - the largest deficit by far in the country - and the overall amount owed is now about $270 billion.

The spring budget, which was rejected by opposition parties, will be re-introduced on July 14.

Sousa said it contains no funding for public sector wage increases, a strategy to maximize profits from public assets like Hydro One and funds to invest in transportation infrastructure and businesses.

“Ontario continues to attract more investment than any other jurisdiction in North America,” Sousa said.

Moody’s view of the province’s fiscal future was not so rosy.

The rating agency is concerned that the province may not be able to meet its targets to reduce the deficit.

“After several years of weak to moderate economic growth, and higher than previously anticipated deficits projected for the next two years, the province is facing a greater challenge to return to balanced outcomes than previously anticipated,” Moody’s said in a statement. “Although the province has exceeded fiscal targets in recent years, consolidated deficits have shown little change... The required revenue growth, in an environment of continued slower than average economic growth, and necessary operating expense control to achieve fiscal targets will require a considerable shift from recent trends. The province also continues to face large, ongoing capital expenditures which also places pressure on the province’s fiscal position.”

Sousa said the amount of revenue coming into the province has not met the government’s expectations but the budget responds to this challenge.

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