Sta­ble fi­nances

The Guardian (Charlottetown) - - THE ISLAND - BY TERESA WRIGHT

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.

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