Ontario has been hit with another credit downgrade as a New York rating house warns “difficult actions” lay ahead if Premier Kathleen Wynne is to erase a $12.5 billion deficit in four years as promised.

Fitch Ratings lowered the province to AA negative from AA, saying Friday that “budget options are likely to prove more limited . . . risks remain to achieving its goals.”

At issue for Fitch is the planned increase in the deficit this fiscal year, which is a “negative credit factor” along with a “heavy debt burden.”

Finance Minister Charles Sousa said Fitch has lowered its rating to the same level DBRS and Standard and Poor’s have had for Ontario for some time.

The announcement “underscores many of the challenges I have been working to address,” Sousa said in a statement, noting revenue growth has been lower than expected.

“Our government has been consistently clear that we must remain focused as our economy emerges from the effects of the great global recession.”

Progressive Conservative MPP Vic Fedeli (Nipissing), his party’s finance critic, said the Liberals have delayed spending restraint for too long, resulting in taxpayers footing an annual interest bill of $11 billion.

“It’s time for Kathleen Wynne to take substantial action and to start taking the consequences of the fiscal hole she’s dug us into seriously,” he said in a statement.

Sousa said the government has set savings targets of $1.25 billion over the next three years and will limit growth in program spending to 1.1 per cent as Treasury Board President Deb Matthews is tasked with controlling expenses across the government — especially public sector wages.

“We must manage compensation and we will work with our partners in the public sector to ensure that all costs are addressed within Ontario’s existing fiscal framework,” Sousa added.

“We will continue to be mindful of how we spend each dollar and are focused on eliminating the deficit while making the necessary investments to grow our economy.”

The Liberals have pledged to erase the deficit in the 2017-2018 fiscal year — with the next provincial election slated for October 2018.