Prince Edward Island’s bond rating has been confirmed as stable by the Dominion Bond Rating Service.
DBRS has given the province a rating of R-1 for its short-term borrowing and A (low) for longterm borrowing. The province has held the same ratings since 2000-01.
The bond rating agency’s report states that P.E.I.’s economic outlook is positive and its fiscal outlook continues to improve, noting that the balanced 201718 operating budget is the most positive credit development in recent years.
The agency does note the province’s balanced operating budget translates to a DBRS-adjusted deficit of $24 million, after recognizing capital investment as spent rather than as amortized.
“The improving budgetary results and growing economy have contributed to a significant decline in the province’s debt burden,” the DBRS report states.
“A positive rating action could occur if the province demonstrates its ability to maintain a balanced budget on a sustainable basis and the DBRS-adjusted debt burden falls to 40 per cent of GDP with the expectation that it will fall further over the medium term.”
Finance Minister Allen Roach says maintaining a stable bond rating is the result of sound financial management on the part of the province.
“I would like to thank our public service for its prudent use of taxpayer dollars, which has helped our province live within its means while creating increased prosperity for Islanders.”
The two other bond rating agencies, Moody’s and Standard & Poor’s, will be releasing their ratings in the coming weeks.