Finance Minister Ernie Steeves speaks to reporters before delivering his government's 2019-20 budget on March 19, 2019. (Submitted/Government of New Brunswick)
New Brunswick’s credit rating has improved from a negative trend to a stable outlook, according to the Dominion Bond Rating Service.
The province had maintained a high, steady rating from 2004 to 2018, but a growing debt meant it took a financial hit last year.
“This is very encouraging to see that the agency has changed our credit rating for 2019 from A (high) with a negative trend last year to a stable outlook for this year,” said Finance Minister Ernie Steeves in a release.
“Our province took a financial hit last year when our trend rating was downgraded. A downgrade this year would have meant that the government would spend millions more to borrow money and to service the debt, which now exceeds $14 billion.”
The agency said the decision to upgrade its rating was based upon the government’s improvement in its fiscal outlook, and efforts in the 2019-20 budget to reduce the net debt.
This year’s budget forecasts a surplus of $23 million and plans to decrease the debt by $49 million.
While the economic outlook remains challenging for New Brunswick, the global credit rating agency has confidence that the government will deliver on its fiscal commitments.
The agency also took into consideration spending reductions in the 2019-20 capital budget.
The Dominion Bond Rating Service notes that a future downgrade of the province’s rating is always possible if the government fails to demonstrate continued improvement resolving its debt.
“Despite…very positive news, we still have a lot of work to do and we need to act with urgency,” said Steeves. “As the agency mentioned, we must continue to maintain a strong fiscal discipline through continued expenditure management and continue reducing our debt.
