NEWS RELEASE · 20th May 2010
Ministry of Finance
Standard & Poor's has affirmed the Province of British Columbia's credit rating at AAA, the highest possible, noting the Province's strong fiscal management is keeping B.C. on track to balance the budget by 2014, Finance Minister Colin Hansen announced today.
"S&P is the third of the large agencies to confirm British Columbia's high credit rating," said Hansen. "As the rating agencies indicate, our sound financial management and debt reduction strategies have given us the flexibility to respond to the recession's challenges while protecting vital services such as health care and education."
S&P's report notes, "The province's debt reduction in recent years gave it an increased capacity to respond to the global recession, in our opinion. From fiscals 2004-2007, B.C. used some of its strong operating and after-capital surpluses to reduce its direct and tax-supported debt materially."
In its summation and affirmation of BC's AA (high) rating, Dominion Bond Rating Services said "... the Province's fiscal recovery plan is relatively unchanged from last year, supported by prudent spending discipline, a low debt burden and expectations for continued economic recovery... DBRS expects British Columbia to be one of the first provinces to return to balance, thanks to its strong fiscal resolve."
Moody's also recently affirmed their AAA rating of B.C. and noted "...The significant debt reduction efforts of the past few years have put British Columbia in a stronger position to face recently recorded and anticipated deficits and increases in debt burden."
Following Budget 2010, Hansen and Ministry of Finance staff consulted with the domestic and international investment community. The consultations took advantage of the momentum of the highly successful Olympic Winter Games as government looks to broaden B.C.'s investor base, encourage investors to buy B.C. bonds and to update investors on developments within the Province. These measures, combined with the Province's high credit rating, help maintain the Province's relatively low borrowing costs and strengthen investor confidence in B.C.
"We continue the hard work required to ensure British Columbia's economy recovers in the shortest time possible. The introduction of the Harmonized Sales Tax is the single most important step we can take to ensure British Columbia's long-term economic health," said Hansen. "The scrutiny from the investment community and bond rating agencies is ongoing, and we cannot afford to become complacent."
Since 2001, the Province has implemented a series of economic actions that now makes British Columbia one of the most competitive jurisdictions in the G7. These include: tax reductions; streamlined regulations for businesses; improved labour mobility between provinces; new and upgraded transportation infrastructure; new trade offices and a series of trade missions to attract investment from Asia; an Olympic hosting program; a fiscal foundation that has led to seven credit-rating upgrades; and seven new universities to train skilled workers in the modern economy.