TORONTO, ON: The Canadian Taxpayers Federation (CTF) called for immediate action from the Wynne government following Standard & Poor’s (S&P) downgrading of Ontario’s long-term rating from AA- to A+. This is the second time S&P has downgraded Ontario’s credit rating since 2009.

Credit downgrades can be costly for taxpayers. They measure how reliable lenders believe their loan recipients are, and the likelihood of the borrower defaulting. Just like with every day Ontarians, the interest rate that the province pays on its debt is based on the province’s credit rating, and as the rating drops, the cost of borrowing rises.

“Ontario is already paying $11.4 billion this year on interest alone, which is the third largest and fastest growing expenditure of the government,” said CTF Ontario Director Christine Van Geyn. “This credit rating downgrade will drive the cost of borrowing up, and this cost will be borne by the taxpayers.”

“The Ontario government paid Don Drummond good money to tell them how to cut spending. That report is collecting dust while international credit rating agencies ring the alarms,” continued Van Geyn. “Premier Wynne needs to cut spending now or she will soon find herself governing a bankrupt province.”

S&P had previously downgraded Ontario’s rating from AA to AA- in 2009. The ratings agency has repeatedly warned the province that a downgrade was in the cards. In 2012 the province was placed on a negative credit watch, and S&P warned there was a one-in-three chance it would lower the rating.

S&P is not alone in its view of the province. The province has also previously seen credit downgrades by other credit rating agencies, Moody’s and DBRS.