...The ratings on the Province of Ontario reflect Standard & Poor's Ratings Services' view that the province is a sustained and projected underperformer on its budgetary performance and debt burden versus domestic and international peers. Although Ontario continues to beat its fiscal targets and expects to close its operating budget gap by fiscal 2018 (year-ended March 31), it will still have to contend with sizable yearly after-capital deficits, given its large net capital spending intentions. Under our base-case scenario, we foresee Ontario's after-capital deficit remaining above 7% of total adjusted revenues over the next two years. Additional capital revenues from potential asset sales or the cap-and-trade scheme put forward but not articulated in the fiscal 2016 budget could mitigate the province's medium-term borrowing demands. In the next two years, however, we expect capital funding needs to cause Ontario's tax-supported debt to peak at 267% of consolidated operating revenues (and...
