The 2017 federal budget is positive for Canada’s credit rating picture, says Moody’s Investors Service in a new report.

The report says that Canada’s federal government debt-GDP ratio, which has been rising since 2014, is now expected to start declining as early as fiscal 2017 (which ends March 31, 2018) if the government does not utilize it $3 billion per year risk buffer. Even if the government does use the buffer, the debt trend will remain lower than projected in the 2016 budget, the report says.

The improvement is “credit positive and we expect it to occur in conjunction with general government fiscal deficits that are moderate relative to other rated sovereigns and compare favourably to some Aaa-rated peers,” the report says.

Read: Budget 2017

“These debt projections are in line with our own baseline assumption that federal debt levels will stabilize in fiscal 2017 and begin to decline thereafter,” the report adds. That scenario assumes that the government will not use the buffer, and that fiscal deficits will largely come in line with the government’s projections.

The Moody’s report also notes that the lower debt ratios are primarily due to exogenous factors, rather than government efforts at fiscal consolidation.

“These factors include lower debt charges in 2016-2017, better-than-expected financial results in the corporate sector, delayed implementation of the Canada-European Union trade agreement, changes in assumptions about the effect of the Trans-Pacific Partnership on import tariffs, and lower direct program expenses,” it says.

While the government does not foresee lower deficits over the next several years, the report says, “we do not view the persistence of fiscal deficits as credit negative.”

Among other things, the report says that Canada’s deficits “will still be moderate compared with other sovereigns,” government forecasts are based on realistic growth assumptions, and these deficits are largely due to planned infrastructure investment, which, the report says “will support growth in the coming years.”

Moody’s view is echoed in a new report from Fitch Ratings.

“Continued Canadian federal government deficits will support growth without resulting in a significant deterioration in the sovereign’s debt position,” the Fitch report says.