A local financial advisor says the provincial government will likely have to do something “substantial” to satisfy the credit rating agencies that it is serious about addressing its debt.

While there’s been no change in the province’s credit rating, S&P Global Ratings adjusted the economic outlook from stable to negative last week based on the risk of rising deficits.

Larry Short of Short Financial, a division of iA Private Wealth, says it doesn’t matter how rosy the province’s economic prospects look, the credit rating agencies want to see action on spending and debt.

“In order to satisfy the credit rating agencies, it’s going to have to be something substantial.”

Short says the highest costs involve health care and possibly government salaries.

That’s problematic for governments because the necessary decisions are not politically popular.

“It will be very difficult to keep a caucus together if there is for example, a hospital that is closed in some district. That that member standing up and saying ‘I’m not putting up with this, I’m gong to walk across the floor,’ is a distinct risk. But that is the sort of large-scale cuts that had to be done to meaningfully say that the costs are going to be reduced in some fashion.”