Victoria: Dominion Bond Rating Service (DBRS) has confirmed British Columbia’s AA (high) credit rating, praising the Province’s strong fiscal discipline and declining debt burden, Finance Minister Michael de Jong announced.
DBRS affirms that the Province’s outlook for its long- and short-term debt ratings are stable, and asserts the trends are supported by B.C.’s fiscal performance and financial flexibility.
DBRS says, “The latest budget points to a continuation of sound fiscal performance in British Columbia,” and notes, “with labour agreements in place with more than two-thirds of the civil service, this increases the likelihood that spending targets can be met.”
The agency praises B.C.’s accounting and reporting practices, saying, “The Province continues to adhere to very high accounting and reporting standards, including compliance with GAAP and early adoption of new standards, comprehensive consolidation of government entities, early budget releases, established dates for quarterly updates, full comparability of budget estimates and public accounts and no reliance on fiscal smoothing mechanisms to balance its budget.”
DBRS points out that B.C. has a low and affordable debt burden, and has one of the most-competitive tax regimes in Canada. The agency expects B.C. to remain one of Canada’s economic-growth leaders, noting the Province uses conservative assumptions and modest contingencies in its forecasts.
B.C. has been rated AA (high) with DBRS since May 2007, when the government was upgraded from AA.
Since November 2004, the Province has received seven credit rating upgrades. British Columbia continues to maintain the highest credit rating possible with Moody’s, Standard and Poor’s and Fitch. Moody’s most recently affirmed its Aaa rating in March following Budget 2015 and upgraded its outlook to stable, while Standard & Poor’s most recently affirmed its AAA rating in May 2014 following Budget 2014. Fitch affirmed the Province’s AAA rating in April 2014.
Minister of Finance Michael de Jong said, “Dominion Bond Rating Service acknowledges the hard work we’ve put into balancing our budget, and the hard work we will continue to put into maintaining our fiscal discipline. Their confidence helps reduce our borrowing costs so we can invest more in the services that British Columbians rely on.”
“Dominion Bond Rating Services recognizes how important labour stability is to controlling expenses. The fact that nearly three-quarters of the B.C. public service is now covered by ratified or tentative agreements is definitely a factor that positively affects our credit rating.”