March 15, 2005
Dominion Bond Rating Service upgraded British Columbia’s credit rating, citing the province’s sound fiscal management and reduced debt burden, finance minister Colin Hansen announced today.
Dominion Bond Rating Service (DBRS), a major Canadian credit rating agency, increased the Province of British Columbia's credit rating to AA with a stable outlook from AA [low]. This is the first time since 1989 that DBRS has increased B.C.'s credit rating.
To support its rating upgrade, DBRS cited British Columbia’s sound financial and economic position, significant improvements in the province's debt burden, considerably improved tax-competitiveness, cost control measures, the achievement of a balanced budget and fiscal soundness going forward.
“Today’s credit upgrade from DBRS, like the upgrade we received from Standard and Poor's last November, is further validation that our plan is working and British Columbians will continue to see the benefits,” said Hansen. “Investors and rating agencies are impressed with our province's achievements and people from across North America are really excited about British Columbia's future.”
“It's a remarkable improvement from the fiscal and economic mismanagement we saw in the 1990s, which led DBRS to downgrade B.C.'s credit rating in 1999,” said Hansen.
DBRS is one of three rating agencies that regularly examine the financial health of governments in order to determine risk associated with the issuance of government bonds. The better the government's credit rating, the lower the risk, and the less government has to pay in interest costs on its debt.
“Sound fiscal management and a strong economy means British Columbians can invest more in health care and education rather than servicing the debt,” said Hansen. “As we continue to manage our debt prudently, we hope to see greater savings in the years ahead.”
Total provincial debt at the end of 2005/05 is forecast at $36.1 billion, a $1.7 billion decline from the previous year and the largest annual debt reduction in B.C. history.
