Ratings agency Moody’s on May 9 affirmed B.C.’s Aaa (stable) long-term credit rating, which is a significant because it helps the province service its debt at lower interest rates. This is the 13th year in a row that Moody's has given the province this rating.
B.C. is the only province to have the high triple-A credit rating affirmed by three international credit rating agencies: Moody’s, Fitch, and Standard & Poor’s, which last provided an update in November.
Domestic rating agency Dominion Bond Rating Service (DBRS) affirmed B.C.’s AA (high) credit rating in April 2018. B.C. is DBRS’ highest-rated province in Canada.
“While sizeable capital expenditures continue to keep B.C.’s debt burden elevated, the extended low interest rate environment has helped interest expense, and therefore debt affordability, remain manageable,” Moody’s said in its report.
It added that the province’s credit profile “reflects a diverse and strong provincial economy, prudent fiscal management and a high degree of flexibility to accommodate revenue and expenditure pressures.”
“Those positive elements enable the province’s recently elected provincial government to forecast continued, although thin, balanced budgets across its three year budget horizon to 2020/21.”
Moody’s noted that the province’s credit profile assumes that the debt burden will remain near current levels over the medium-term.
B.C. also has a Prime-1 (P-1) rating assigned to its commercial paper program.
Finance Minister Carole James was pleased with the news, saying that the Moody’s affirmation is “further validation that our plan to make life more affordable, improve services and create good jobs for people is prudent and fiscally sustainable.”
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