Provinces credit rating remains strong: Kennedy

Staff ~ The Telegram
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The provincial government announced today that Newfoundland and Labrador's long- and short-term debt ratings have been maintained at A and R-1 (low) respectively by the Dominion Bond Rating Service (DBRS), one of three agencies who rate the province's credit worthiness.

Finance Minister Jerome Kennedy said that given the world economic downturn and its impacts on the economy and fiscal position of the province, he is satisfied with the outcome of the results of the DBRS review.

In a news released, Kennedys said he was pleased with the observation by DBRS that the fiscal discipline demonstrated by the province, its strong liquidity position and efforts to reduce debt continue to provide solid support to the credit profile.

"The stability of the province's credit rating is a significant sign and a reason for cautious optimism, particularly during a global economic recession," Kennedy said.

"DBRS recognizes the efforts of our government over the last number of years in improving our fiscal position and significantly reducing our debt which has resulted in recognition of our current fiscal challenges as being temporary.

"Our government is committed to returning to a surplus by 2011 and we are optimistic about major projects such as the Long Harbour nickel processing facility, the Hebron project and White Rose expansion."

DBRS indicated that total revenues are expected to fall from the previous year due to the impact of lower commodity prices on royalty revenues and the absence of 2005 Atlantic Accord proceeds. The company also indicated that spending for key health and education programs will continue to grow, with a large portion of the spending increase used to address the latest round of public sector labour agreements.

"We have reduced net debt by approximately 33 per cent over the last four years, and we will continue to do so in the future," Kennedy said. "When we reduce debt we improve our credit rating and lower the cost of borrowing, when it is necessary. We are committed to improving our credit rating through fiscal discipline."

Organizations: Dominion Bond Rating Service

Geographic location: Newfoundland and Labrador, Long Harbour, Hebron White Rose

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  • the butler did it
    July 02, 2010 - 13:29

    Thank God the Liberal propped the Williams lead government up with all this money before he took over! Because he certainly hasn't done anything to get revenue for Newfoundland .

  • the butler did it
    July 01, 2010 - 20:17

    Thank God the Liberal propped the Williams lead government up with all this money before he took over! Because he certainly hasn't done anything to get revenue for Newfoundland .