Press Release

DBRS Morningstar Confirms Province of Ontario at AA (low) and R-1 (middle), Stable Trends

Sub-Sovereign Governments, Utilities & Independent Power
June 24, 2022

DBRS Limited (DBRS Morningstar) confirmed the Issuer Rating and the Long-Term Debt rating of the Province of Ontario (Ontario or the Province) at AA (low) and the Short-Term Debt rating at R-1 (middle). DBRS Morningstar also confirmed the Ontario Electricity Financial Corporation’s Long-Term Obligations rating at AA (low) (based on the Province's rating). All trends are Stable.

The June 2, 2022, general election saw the Progressive Conservative Party of Ontario (PC), led by Doug Ford, reelected to a strong majority, capturing 83 of 124 seats. The PC’s campaign platform "Get it Done" largely mirrored the pre-election budget, "Ontario's Plan to Build," introduced on April 28, 2022, and focused on rebuilding the economy, building highways and infrastructure, introducing modest reductions in taxes and fees, and making investments in healthcare. While a new budget has yet to be introduced, DBRS Morningstar expects it to largely mirror the pre-election budget, with minor updates. As such, DBRS Morningstar expects fiscal policy to be largely unchanged, targeting gradually declining deficits and debt. Like many provinces, Ontario's fiscal and debt outlook has improved markedly from DBRS Morningstar's previous review in June 2021 and supports the current ratings. This improvement largely reflects considerable budgetary prudence and a more robust economic recovery than previously expected.

Based on the April 2022 budget, under Ontario's baseline scenario, the Province anticipates gradually declining deficits of $19.9 billion in 2022–23, $12.3 billion in 2023–24, and $7.6 billion in 2024–25. Like previous budgets, the Province provided two alternate deficit scenarios—the faster growth scenario and the slower growth scenario. Under the faster growth scenario, a small surplus could be achieved by 2024–25, while under the slow growth scenario, the deficit would remain elevated at $15.0 billion in 2024–25. On a DBRS Morningstar-adjusted basis, the baseline scenario equates to deficits ranging between 1.4% and 2.7% of GDP.

Ontario's debt-to-GDP now appears to be on a gradual downward trend. Based on the April 2022 budget, the Province projects net debt-to-GDP to stabilize around 41.0% of GDP through 2024–25. On a DBRS Morningstar-adjusted basis, debt-to-GDP is projected to gradually decline to 42.8% by 2024–25. This is substantially above the levels reported prior to the 2008–09 financial crisis but meaningfully improved from expectations at DBRS Morningstar's last review in June 2021.

For the April 2022 budget, the Province assumed real GDP growth of 3.7% and 3.1% in 2022 and 2023, respectively. This 2022 forecast is roughly in line with the current private-sector consensus, although the 2023 growth projection appears optimistic and is subject to downside risks in light of central bank efforts to tame persistently high inflation and expectations of softening global growth.

A positive rating action, while not contemplated in the current environment, would be dependent on steadily declining deficits and debt-to-GDP approaching 35.0% or below on a sustainable basis. A negative rating action could result from a material deterioration in financial risk metrics, such as a significant and persistent widening of the deficit and material increase in the debt-to-GDP ratio.

There were no Environmental/Social/Governance (ESG) factors that had a significant or relevant effect on the credit analysis.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at

All figures are in Canadian dollars unless otherwise noted.

The principal methodologies are Rating Canadian Provincial and Territorial Governments (June 1, 2022; and the Global Methodology for Government Related Entities (May 6, 2022;, which can be found on under Methodologies & Criteria. Other applicable methodologies include the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (May 22, 2022;

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

This rating is endorsed by DBRS Ratings Limited for use in the United Kingdom, and by DBRS Ratings GmbH for use in the European Union, respectively. The following additional regulatory disclosures apply to endorsed ratings:

With respect to FCA and ESMA regulations in the United Kingdom and European Union, respectively, this is an unsolicited credit rating. This credit rating was not initiated at the request of the issuer.

With Rated Entity or Related Third Party Participation: YES
With Access to Internal Documents: YES
With Access to Management: YES

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

For further information on DBRS Morningstar historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: DBRS Morningstar understands further information on DBRS Morningstar historical default rates may be published by the Financial Conduct Authority (FCA) on its webpage:

Lead Analyst: Travis Shaw
Rating Committee Chair: Brenda Lum, Managing Director Real Estate and Public Finance
Initial Rating Date: May 15, 1987

For more information on this credit or on this industry, visit or contact us at

DBRS Limited
DBRS Tower, 181 University Avenue, Suite 700
Toronto, ON M5H 3M7 Canada
Tel. +1 416 593-5577

-- Rating Canadian Provincial and Territorial Governments (June 1, 2022;
-- Global Methodology for Government Related Entities (May 6, 2022;