There is no change in the province’s credit rating, but S&P Global Ratings has revised its outlook for Newfoundland and Labrador from Stable to Negative based on the risk of rising deficits.

S&P says the province has “significant economic opportunities for growth” however higher healthcare costs and new affordability measures could lead to greater operating deficits, adding to the province’s “already high” and growing “debt burden.”

S&P says the negative outlook reflects its expectation that weaker fiscal outcomes in the next two years could persist despite healthy economic activities.

That includes higher operating deficits and elevated after-capital deficits of more than 10 per cent of total revenue.

The agency says the province’s credit rating could be lowered in the next two years, if “meaningful fiscal response” is not taken and operating deficits persist.

The outlook could return to stable however, if government limits its spending growth, and an agreement on the energy deal with Quebec is reached.