2024 Canadian Provincial Credit Outlook: Despite a Slowing Economy, Public Finances to Remain Sustainable

This commentary lays out DBRS Morningstar’s views on the outlook for Canadian provincial credit ratings for 2024.

Key highlights include:
-- We expect provincial ratings to remain largely stable, though some upside is possible.
-- Weaker economic conditions will complicate budget preparations.
-- Fiscal improvement is hard to come by, but the debt-to-GDP ratio will remain largely stable for most provinces.
-- Provincial elections in October 2024 warrant intrigue.

“The credit quality of Canadian provinces remains strong and resilient,” said Travis Shaw, Senior Vice President, Public Finance for DBRS Morningstar. “Looking ahead to 2024, there is still room for further modest improvement and limited downside for provincial ratings. Despite the current slowing economic activity, fiscal discipline is strong and any deterioration in fiscal results is likely to be modest.”