May 18, 2007

VICTORIA – Standard & Poor’s has upgraded British Columbia’s credit rating to AAA, the agency’s highest rating, Finance Minister Carole Taylor announced today.                    

Standard & Poor’s increased the Province’s credit rating to AAA from AA+ (stable), citing strong budgetary performances, strong management culture and improved transparency for planning and reporting practices. S&P also noted an expectation that B.C.’s net tax-supported debt as a share of GDP will continue to gradually decline.

“Achieving the best possible rating from S&P is excellent news,” said Finance Minister Taylor.  “It confirms that our fiscal and economic policies are working and tells potential investors that British Columbia is a great place to invest.” 

With this upgrade, British Columbia now stands with Alberta and the Government of Canada, which are also rated AAA.

In 1999, citing concerns over the significant deterioration in the Province’s fiscal position and weak economic performance, S&P downgraded British Columbia’s credit rating to AA- from AA. In 2001, the government set out a plan to balance British Columbia’s budget and revitalize the economy. Following the successful achievement of those goals, S&P upgraded B.C.’s credit rating to AA from AA- in November 2004, and to AA+ from AA in April 2006.

S&P is one of several ratings agencies that regularly examine the financial health of governments to determine risk associated with the issuance of government bonds. Since November 2004, the Province has received seven credit rating upgrades. Most recently, Dominion Bond Rating Service upgraded B.C. to AA (high) on May 7, while Moody’s Investor Services upgraded B.C.’s credit rating to Aaa in Oct. 2006.

“British Columbia now has one of the best credit ratings in the world,” said Taylor. “It took a disciplined and prudent approach to get us here – and it is something we must keep up if we want to maintain our world-class status in the years ahead.” 

Sustained improvements in credit rating save taxpayers debt-service costs and allow for investment in other government priorities. In the fall of 2001, the Province borrowed at interest rates that were nine basis points higher than the Province of Ontario, the market benchmark among provincial issuers. Today, British Columbia’s borrowing rate is four basis points lower than Ontario’s. With each annual borrowing program, this improvement translates into interest savings of about $59 million over a 10-year average term.