On June 2, 2009, Standard&Poor's Ratings Services revised its outlook on the Province of Ontario to negative from stable, based on our assessment of the likelihood of substantial operating deficits, short-to-medium-term revenue weakness, and the prospect of a rapid rise in debt. At the same time, Standard&Poor's affirmed its 'AA' long-term issuer credit and senior unsecured debt ratings and its 'A-1 (High)' Canada national scale and 'A-1+' global scale commercial paper ratings on the province. In our view, the following factors are Ontario's credit weaknesses: With the global economic downturn taking hold of the provincial economy, we expect Ontario's string of operating surpluses to turn to deficits as tax revenues fall. We expect that growth in
