NLIS 4
May 27, 2004
(Finance)

 

The following statement was issued today by Loyola Sullivan, Minister of Finance and President of Treasury Board. It was also read in the House of Assembly:

Standard & Poor�s affirms province�s credit rating

I rise today to inform my honourable colleagues that Standard & Poor�s Rating Services has affirmed our province�s credit rating. I am pleased to say that Newfoundland and Labrador�s rating remains A- and that our outlook is considered stable.

The rating reflects the province�s solid economic fundamentals and government�s plan to get its fiscal house in order. Standard & Poor�s identified that "the new Progressive Conservative Party�s stated intentions that were announced in the most recent budget to restructure the province�s finances and eliminate the province�s deficit over a four-year horizon, and thereby stabilize the debt burden in the medium term" as a factor in its current rating decision.

Government is strongly committed to improving our province�s fiscal situation, and we are taking steps to do just that. The latest credit rating from Standard & Poor�s, a leading international credit rating agency, reflects those efforts.

While Newfoundland and Labrador does have a number of positive strengths, Standard & Poor�s also noted that several areas offset these strengths. These include the province�s large unfunded pension liabilities, a declining population, and the deterioration of its budgetary performance in the past two fiscal years. Government has recognized these challenges and we are working hard to address them.

In developing the 2004 Budget, government was faced with making difficult decisions. We have stated repeatedly that without those difficult decisions, our province�s credit rating may have been in jeopardy. In issuing its rating, Standard & Poor�s has stated: "The stable outlook reflects Standard & Poor�s expectation that the government will adhere to its stated goal of eliminating its cash deficit as outlined in the current four-year fiscal plan. Any material deviation from the province�s stated plan to balance the budget in this timeframe could result in downward ratings pressure."

This government inherited a serious fiscal situation and it is this government that will take the necessary steps to fix that situation. It is encouraging that Standard & Poor�s has recognized government�s plan to put our province on sound financial footing.

2004 05 27                                        2:05 p.m.


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