(Bloomberg) — British Columbia lost its top credit rating from S&P Global Ratings, which said provincial debt will rise sharply over the next few years because of the economic shock of Covid-19.

Canada’s third-largest province will run a deficit this fiscal year that’s “significantly larger” than expected when the pandemic began, which will likely lengthen the time to return to fiscal balance, S&P said in a statement Wednesday explaining the one-notch downgrade to AA+. The move comes less than two weeks after Fitch Ratings took a parallel rating action.

Finance Minister Selina Robinson presented a budget in April that projected a budget deficit of C$9.7 billion ($7.8 billion) in the current fiscal year, which ends March 31, 2022, and smaller deficits for the two years after that.

All told, the province’s tax-supported debt is likely to reach C$102 billion or 172% of operating revenue by next March, rising to 195% by 2024, the rating company said.

Those numbers mean that B.C.’s key fiscal and debt metrics are no longer comparable with AAA-rated peers, S&P analysts including Stephen Ogilvie said. Before the pandemic, debt was about 123% of revenue.

“The Covid-19 pandemic’s blow to the provincial economy has turned after-capital results into large deficits and is elevating the burden of tax-supported debt,” S&P said.

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