Moody’s Investors Services is again warning Ontario on its debt burden, saying it will have a more difficult time than Quebec achieving a balanced budget and paying down its debt.

The rating service did not change the credit ratings for the two provinces, but issued an information bulletin today to explain why Ontario has a negative outlook with its Aa2 rating, but Quebec has a stable outlook with the same rating.

Moody's first assigned a "negative" outlook to Ontario last July.

It’s really the “magnitude of the challenge” Ontario faces in getting its fiscal house in order that makes the difference, says Michael Yate, a senior analyst with Moody’s in Toronto.

Ontario aims to balance its provincial budget in 2017-18, but its debt has increased significantly since 2009. The province’s fall budget update again forecast program spending that will boost the debt further, Yate said.

Overly optimistic on economy

He forecast the Ontario government’s debt would amount to 244 times its total revenue by the end of this year.

Yate said he’s not seeing a negative outlook for Ontario’s economy, but does believe the province’s estimates of its revenue because of economic growth tend to be optimistic.

“In the short term, there is not any negative impact from the low price of oil and the expanding U.S. economy should support the manufacturing sector,” he told CBC News.

"But what we do know is that in the past the provinces’ forecast for GDP growth has been overly optimistic — it has come in low," Yates added.

Ontario's economy since 2009 has been hammered by a high dollar and hollowing out of its manufacturing sector.

Ontario has a "tendency to delay" expenditure restraint until the end of the period when it expects to balance its books, Yate said in his report. The province has a backlog of infrastructure spending that could further boost its expenditures.

A "prolonged high debt burden increases re-financing risks," his report says and increases the interest costs born by taxpayers.

Quebec also has experienced weaker-than-expected GDP growth in the last few years, but the downturn it experienced wasn’t as steep as Ontario’s, Yate said.

Quebec debt didn't increase substantially

Debt remained at about 190 to 200 times revenue in that period with only a modest deficit each year, he said. It also contributes to a debt retirement fund, which could help it pay down debt more quickly.

Quebec has said it expects to balance its budget in 2015-16.

Moody’s called Quebec “stable and consistent” in management of its debt.

Ontario Finance Minister Charles Sousa says the report reinforces the challenges he has been talking about for the past two years, but he insists Ontario will eliminate its $12.5-billion deficit on time.

"What we have to also recognize is that Ontario, in relative terms to other provinces, actually has a lot more flexibility by way of tools that we have yet to enact, if at all," Sousa said Monday.

"What I want to do is ensure we put our house in order by looking at our spending, looking at repurposing some of our assets to reinvest in the things that make us even more competitive long-term."