Finance
November 14, 2016

Confidence in Fiscal Plan

DBRS Confirms Province’s Credit Rating

The Honourable Cathy Bennett, Minister of Finance and President of Treasury Board, today announced that DBRS has confirmed the province’s credit rating at A (low). The rating confirmation is based upon DBRS’s view that credible action is being taken by government to address the province’s fiscal situation.

“I am encouraged that DBRS advised us of our rate confirmation in advance of the Muskrat Falls loan guarantee being finalized. DBRS has acknowledged our commitment to our fiscal targets established in Budget 2016 and reiterated as part of the Fall Fiscal and Economic Update. Our government recognizes the challenges that remain and will continue to take the actions necessary to meet our short-term and long-term financial targets.”
- The Honourable Cathy Bennett, Minister of Finance and President of Treasury Board

DBRS noted the Fall Fiscal and Economic Update demonstrated the fiscal performance was tracking ahead of budget. DBRS listed the province’s strengths as having significant energy resources, a commitment to restoring fiscal discipline and a low reliance on federal transfers, noting that the province has not received any equalization or offshore accord payments since 2011-12.

In a comment issued on November 11, Moody’s Investor Services said that updates on the province’s 2016-17 fiscal performance, as well as preliminary details on an addition to the federal loan guarantee for Muskrat Falls were both credit positive for the province. Moody’s cautioned that while the developments are credit positive and have reduced pressure on debt accumulation, the province still faces credit challenges, including a series of elevated deficits before returning to balanced budgets.

QUICK FACTS

• DBRS has confirmed the province’s credit rating at A (low).
• The rating confirmation is based upon DBRS’s view that credible action is being taken by government to address the province’s fiscal situation.
• Government will continue to take the actions necessary to meet short-term and long-term financial targets.
• In a recent comment, Moody’s Investor Services said that updates on the province’s 2016-17 fiscal performance, as well as preliminary details on an addition to the federal loan guarantee for Muskrat Falls were both credit positive for the province.

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Media contact:

Tansy Mundon Director of Communications Department of Finance 709-729-6830, 693-1865 tansymundon@gov.nl.ca

2016 11 14                              2:45 p.m.