Finance
April 18, 2016

Restoring Fiscal Confidence and Responsibility

Provincial Government Responds to Recent Comments from Credit Rating Agencies

The Honourable Cathy Bennett, Minister of Finance and President of Treasury Board, today responded to recent comments from credit rating agencies following the release of Budget 2016.

"I am pleased to see that all three credit rating agencies, Standard and Poors, DBRS and Moody's recognized our government's plan to regain control of government finances. It is encouraging to see that the agencies have noted that our government is committed to taking credible action and has made the first very difficult, but necessary steps, to return to a surplus position in seven years. In particular, one agency, DBRS, has changed our credit rating, based on the strength of our long-term plan, and have upgraded our outlook to stable. We have more work to do and we will hold ourselves accountable and we will get results. Our credible plan is to be more efficient, eliminate government waste and treat the public's money responsibly in order to lay the foundation to support residents and protect future generations."
- The Honourable Cathy Bennett, Minister of Finance and President of Treasury Board

DBRS upgraded the outlook for Newfoundland and Labrador from negative to stable and changed the Issuer Rating and Long-Term Debt ratings to A(low). Both Moody's and Standard and Poors made no changes to the province's credit rating.

One important aspect of Budget 2016 is to shield this province from increasing interest rates and use the public's money on essential social programs rather than on mounting debt servicing costs.

"Budget 2016 outlined clear targets to address the unprecedented fiscal challenges facing this province and the decisive actions being taken, which will be followed by more actions in our supplemental budget in the fall and further actions in Budget 2017. We are working hard to restore fiscal confidence and accountability in our province and taking action to ensure our province remains attractive to investors and rating agencies in the face of our difficult fiscal circumstances. Our government is taking action to ensure we protect our residents from the potential financial impacts caused by the lack of planning and poor management of the previous administration."
- Minister Bennett

In just over 120 days, the Government Renewal Initiative and line-by-line review has saved $243 million in 2016-17, annualizing to $251 million. Taking into account entities and accrual adjustments, the impact on the deficit is $282 million in this fiscal year.

Details of all decisions made through Budget 2016 can be found here www.budget.gov.nl.ca/budget2016/.

QUICK FACTS

• The Provincial Government is encouraged by recent comments from credit rating agencies regarding a long-term plan to regain control of the province's finances.
• DBRS upgraded the outlook for Newfoundland and Labrador from negative to stable and changed the Issuer Rating and Long-Term Debt ratings to A(low).
• Both Moody's and Standard and Poors made no changes to the province's credit rating.
• One important aspect Budget 2016 is to shield this province from increasing interest rates and use the public's money on essential social programs rather than on mounting debt servicing costs.
• In just over 120 days, the Government Renewal Initiative and line-by-line review has saved $243 million in 2016-17, annualizing to $251 million. Taking into account entities and accrual adjustments, the impact on the deficit is $282 million in this fiscal year.

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Media contact:

Jennifer Tulk Director of Communications Department of Finance 709-729-6830, 728-4104 jennifertulk@gov.nl.ca

2016 04 18                              5:05 p.m.