Province of Ontario Issuer Credit Rating Affirmed At 'A+' Following Election; Outlook Remains Stable

OVERVIEW The Progressive Conservative Party won the June 7, 2018 Ontario general election and will take office with a strong majority on June 29, ending 15 years of Liberal government. It remains to be seen how quickly and to what extent the new government will convert its election promises of tax cuts and spending efficiencies into actual fiscal policy. However, we assume that some form of tax cuts, together with the significant time and effort needed to extract meaningful spending efficiencies, will contribute to worsening trends in Ontario's after-capital deficits and tax-supported debt. This would partly unwind the gradual improvement in credit metrics that Ontario achieved since we lowered our ratings on the province to 'A+' in June 2015. We

...OVERVIEW + The Progressive Conservative Party won the June 7, 2018 Ontario general election and will take office with a strong majority on June 29, ending 15 years of Liberal government. + It remains to be seen how quickly and to what extent the new government will convert its election promises of tax cuts and spending efficiencies into actual fiscal policy. + However, we assume that some form of tax cuts, together with the significant time and effort needed to extract meaningful spending efficiencies, will contribute to worsening trends in Ontario's after-capital deficits and tax-supported debt. This would partly unwind the gradual improvement in credit metrics that Ontario achieved since we lowered our ratings on the province to 'A+' in June 2015. + We are affirming our 'A+' long-term issuer credit and senior unsecured debt ratings and our 'A-1' short-term debt rating on Ontario. + The stable outlook reflects our expectations that, within the next two years, fiscal results will weaken...

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