Ontario Premier Doug Ford and Ontario Finance Minister Vic Fedeli are seen making their way through the hallway of Queen's Park to present their first budget to the legislature on April 11, 2019 Richard Lautens/Toronto Star

TORONTO—Credit rating agency Fitch is giving Ontario a stable credit outlook as a result of Premier Doug Ford’s spring budget, but held the overall rating at AA-.

The rating, released Wednesday, came on the same day the Progressive Conservative government passed its first budget.

After the former Liberal government released a big-spending budget last spring, Fitch downgraded the province’s outlook to negative. The agency said it was putting Ontario back in the stable category based on the expectation that the province will “achieve its goal of fiscal consolidation by fiscal 2024.”

The analysis was written by senior directors Marcy Block and Douglas Offerman.

The April 11 budget saw the Tories chart a path to balance over five years — one more year than Ford pledged to take during last year’s election campaign.

The budget pegs Ontario’s deficit at $10.3 billion for this year and mostly relies on the province keeping a tight leash on spending increases before revenues catch up to spending in 2023-24.

In an emailed statement, Finance Minister Vic Fedeli said Fitch’s analysis shows his government’s fiscal plan is “starting to bear fruit.

“During a meeting with Fitch officials recently, we explained our five year path to balance, our debt burden reduction strategy and the initiatives we have already taken to control runaway spending,” Fedeli said.

Fitch’s muted endorsement of Ontario’s fiscal policy comes after Moody’s downgraded the province last December to Aa3 from Aa2.

Moody’s cut Ontario’s rating after Fedeli introduced a fall economic update that pegged the province’s 2018-19 deficit at $14.5 billion. The ratings agency expected several more years of deficit spending would follow leading to a “deterioration of key financial metrics over the next 3-5 years.”

The government’s spring budget puts a damper on future revenues in part because of already enacted and planned tax cuts. In its analysis released today, Fitch noted that revenue is expected to grow at a “slow but solid” pace “even when stressed through a potential recessionary scenario.”

Ontario’s financial accountability office noted last week that in order to balance the budget by 2023-24, the government will have to keep spending growth to levels not seen since the 1990s. The office also noted that Ontario will have to find another $6 billion in savings to meet its financial goals.

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