A key ratings agency has downgraded its outlook on Ontario's finances to "negative" from "stable" in light of the Liberal government's plan to run six consecutive multibillion-dollar deficits.
Moody's Investor Services says spending pressure will challenge the province's ability to "sustain balanced fiscal results" over a number of years.
Moody's also says financing requirements on the province's debt – projected to be $325 billion in 2018-2019 – will be larger than previously believed, leading to a faster increase in interest expenses.
Premier Kathleen Wynne defended the government's pre-election budget, which will run a $6.7-billion deficit in 2018-2019, saying Moody's change wasn't a credit downgrade, which would affect borrowing costs for the province.
The opposition Progressive Conservatives criticized the government, saying interest on the province's debt, projected at $12.5 billion this year, is already crowding out services like health care, education and infrastructure upgrades.
Moody's maintained Ontario's Aa2 issuer and Aa2 senior unsecured long-term debt ratings despite the change in outlook.
Ontario heads to the polls on June 7.