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Premier says province’s credit rating won't be downgraded

Premier Dwight Ball said he is confident this week’s budget will make it easier to borrow money, and there won’t be a credit rating downgrade.
Premier Dwight Ball said he is confident this week’s budget will make it easier to borrow money, and there won’t be a credit rating downgrade.

“My prediction is Ches is going to be wrong,” Premier Dwight Ball said with a grin.

You can almost look at it like a $100-million bet between two politicians, with the province’s economic future hanging in the balance.

Ball is confident his government made the right decisions in Thursday’s provincial budget, in order to satisfy credit rating agencies and keep the province’s borrowing costs under control.

Ches Crosbie, currently the only leadership candidate for the Progressive Conservative party, posted an analysis of the provincial budget on his campaign website Wednesday, on the eve of the budget.

“I will go out on a limb and predict that the budget delivered on April 6, 2017 will result in a credit rating downgrade. We are already on a watch list, or negative outlook, with the two biggest rating agencies,” Crosbie wrote, including bolded text and underlining.

When he heard about this, Ball laughed.

“My prediction is Ches is going to be wrong. Just like NAPE was wrong in their prediction, and their Trump ads,” he said, referring to critical NAPE ads that attack Ball personally for mismanagement of the budget and the economy.

“I know we’re in a better spot. We’re working very closely with those financial institutions. The final impact on borrowing will be — I think Ches will be wrong.”

Budget making is all about balance. The government needs to weigh taxation against providing services, or cutting back. It also needs to balance different interest groups such as industry groups, unions, community non-profits, various regions and many more.

But hanging over all of it is another sort of balance, which Ball said he’s keenly aware of. On the one hand, he’s got to try to keep Newfoundlanders and Labradorians happy, but on the other hand, the province is beholden to its lenders.

Speaking to the media about this year’s budget, Finance Minister Cathy Bennett talked about signing for $4.9-billion worth of borrowing, and she meant that as a good news thing.

Ball said a year ago, the government was basically unable to borrow at all, except for short-term loans.

“Last year in January, we were facing, I can tell you, there were days it felt like, how much more can actually be piling on?” he said.

“We really couldn’t raise money.”

Ball is currently among the country’s least popular premiers, and he was the target of a huge wave of citizen anger over the past year.

In spite of this, he says he would make the same decisions again, because those decisions were necessary to get things under control and keep the lenders happy.

“There’s no other province where we are, in how we manage debt,” he said.

“When I sit with premiers, all the time they just shake their heads and say, boy, I would not want to be in your chair.”

Speaking to The Telegram on the morning after the budget, Ball seemed certain there wouldn’t be a credit rating downgrade, and borrowing costs will not get any worse.

“By the way, Ches feels that we should be laying off thousands of public-sector workers,” he added.

“Everyone has an opinion on this. We look at it and say we’ve got to find a balance looking at the economic impacts, looking at the impact on costs to deliver services.”

On Twitter, Crosbie said it will take two or three weeks for the credit rating agencies to deliver their verdict. So mark your calendar for April 27.

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