![\"Text](\"https:\/\/www.cbc.ca\/a\/assets\/texttospeech.svg\")
<\/p>\n<\/p>\n
Listen to this article<\/p>\n
Estimated 4 minutes<\/p>\n
The audio version of this article is generated by AI-based technology. Mispronunciations can occur. We are working with our partners to continually review and improve the results.<\/p>\n
The Nova Scotia government\u2019s credit rating was downgraded by S&P Global this week over concerns about the province\u2019s mounting deficit, which Premier Tim Houston recently said could top $1.4 billion.<\/p>\n
But the rating change still places the province in a category considered to have strong capacity to meet its financial commitments, while being \u201csomewhat more susceptible\u201d to changing conditions.<\/p>\n
S&P lowered the province\u2019s long-term issuer credit and senior unsecured debt ratings from AA- (its second-highest rating, or “very strong”) to A+ (its third-highest rating, or “strong”). <\/p>\n
The province\u2019s short-term issuer credit rating was downgraded to A-1 from A-1+, which still leaves it in the highest category, considered “extremely strong.”<\/p>\n
The outlook for the province remains negative, according to S&P.<\/p>\n
\u201cThe negative outlook reflects our expectation that, in the next two years, a higher spending base will result in operating deficits and elevated after-capital deficits persisting beyond our previous expectations,\u201d the report says.<\/p>\n
It points to a variety of challenges facing the province, including stalled population growth and the uncertainty of tariffs, along with major spending on projects and labour costs.<\/p>\n
\u201cNova Scotia\u2019s most recent forecast update has dealt a setback to its plan to return to balance by the end of fiscal 2029,\u201d the report says.<\/p>\n
The report cites higher-than-expected spending on health care services, support for seniors and long-term care as well as increased wages, and disaster relief assistance. <\/p>\n
S&P says that increased spending, combined with high capital spending commitments, is expected to put pressure on the province\u2019s borrowing needs and keep pushing up its debt burden.<\/p>\n