Ontario, the world’s most indebted sub-sovereign borrower, is ploughing ahead with Canada’s most ambitious infrastructure plan — risking the censure of Standard & Poor’s and underperformance for its $307 billion of bonds.
The nation’s most-populous province is keeping a goal of spending $130 billion over the next decade on work such as roads and mass transit in Toronto even after S&P dropped its credit grade this month to the lowest level ever. Yield spreads on some of the province’s debt reached the widest since January after the ratings move.
Ontario, with about 13.7 million residents, wants to carry out some of the projects using public-private partnerships, or P3s, an approach it used to build the athlete’s village for this month’s Pan Am Games in Toronto. While bringing in the private sector may reduce risk or speed up work, Ontario would still have to borrow for the financing.
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