rt_0891
June 3rd, 2005, 06:23 AM
Debt rating gives Ontario a lift
FROM CANADIAN PRESS
Dominion Bond Rating Service upgraded the long-term debt rating of Ontario to `stable' from `negative' today due to the province's progress in "restoring fiscal soundness" faster than originally anticipated, the bond rater said today.
The province's long-term rating was confirmed at AA, while its short-term rating trend remains stable and confirmed at R-1.
An improved rating makes it cheaper for the province to borrow money in financial markets to finance the budget deficit.
"While the province continues to face sizable fiscal shortfalls, appreciable progress has been made at reducing spending growth and re-introducing prudence in the budgeting process," Dominion said in a release.
"DBRS is now more confident that the province will be able to stay the course with its fiscal agenda and that the deficits foreseen for the 2005-06 and 2007-08 period, although sizable, are manageable."
Ontario ended the 2004-05 fiscal year with a deficit of $3.8 billion ? better than the original forecast of about $6 billion ? largely due to stronger-than-expected federal transfers and growth in corporate tax revenues, the firm said.
In the May budget, the government forecast a 2005-2006 deficit of about $3 billion and said it will balance its books by 2008-2009, a full year later than it had promised.
"Spending growth will remain robust in priority areas like health care, education, and social services, but restraint in most other spending areas should limit overall expenditure increase to 4.3 per cent, the slowest increase in four years," Dominion said.
FROM CANADIAN PRESS
Dominion Bond Rating Service upgraded the long-term debt rating of Ontario to `stable' from `negative' today due to the province's progress in "restoring fiscal soundness" faster than originally anticipated, the bond rater said today.
The province's long-term rating was confirmed at AA, while its short-term rating trend remains stable and confirmed at R-1.
An improved rating makes it cheaper for the province to borrow money in financial markets to finance the budget deficit.
"While the province continues to face sizable fiscal shortfalls, appreciable progress has been made at reducing spending growth and re-introducing prudence in the budgeting process," Dominion said in a release.
"DBRS is now more confident that the province will be able to stay the course with its fiscal agenda and that the deficits foreseen for the 2005-06 and 2007-08 period, although sizable, are manageable."
Ontario ended the 2004-05 fiscal year with a deficit of $3.8 billion ? better than the original forecast of about $6 billion ? largely due to stronger-than-expected federal transfers and growth in corporate tax revenues, the firm said.
In the May budget, the government forecast a 2005-2006 deficit of about $3 billion and said it will balance its books by 2008-2009, a full year later than it had promised.
"Spending growth will remain robust in priority areas like health care, education, and social services, but restraint in most other spending areas should limit overall expenditure increase to 4.3 per cent, the slowest increase in four years," Dominion said.