FREDERICTON (GNB) – The Dominion Bond Rating Service, a global credit rating agency, has changed New Brunswick’s credit rating trend to A (high) with a stable outlook from A (high) with a negative trend. The province had maintained the A (high) stable rating from 2004 to February 2018.

“This is very encouraging to see that the agency has changed our credit rating for 2019 from A (high) with a negative trend last year to a stable outlook for this year,” said Finance Minister Ernie Steeves. “Our province took a financial hit last year when our trend rating was downgraded. A downgrade this year would have meant that the government would spend millions more to borrow money and to service the debt, which now exceeds $14 billion.

“We needed to act with urgency to ensure a downgrade did not happen again. We took action with both the capital budget and ordinary budget to begin to get the province’s finances in order. We are pleased to see that the Dominion Bond Rating Service recognizes the work being done to improve our financial situation.”

The agency said the decision was based upon the government’s improvement in its fiscal outlook, as evidenced in its 2019-20 budget. The agency said that, while the economic outlook remains challenging for New Brunswick, it has greater confidence that the government will deliver on its fiscal policy commitments and that operating results will evolve as forecast. The agency also took into consideration spending reductions in the 2019-20 capital budget.

The Dominion Bond Rating Service also noted that a future downgrade of the province’s rating is always possible if the government fails to demonstrate continued improvement in its budgetary and debt outlook.

“Despite today’s very positive news, we still have a lot of work to do and we need to act with urgency,” said Steeves. “As the agency mentioned, we must continue to maintain a strong fiscal discipline through continued expenditure management and continue reducing our debt.

The Dominion Bond Rating Service is one of three credit rating agencies that rate the province. In 2018, Standard and Poor’s confirmed New Brunswick’s A+ rating with a stable outlook. Moody’s Investors Service rates the province as Aa2 with a stable trend. Updates from both agencies are expected soon.

“We must continue to send a clear message to the credit rating agencies and the financial and business community that New Brunswick is serious about getting its finances in order,” said Steeves. “That is why we announced in our 2019-20 budget our multi-year fiscal plan. Under our plan, we forecast a surplus of $23 million and plan to decrease our debt by $49 million this year. We project a surplus of $33 million next year, $63 million in 2021-22, and finally, in 2022-23, a surplus of $71 million.”