The provincial government received another slap for its spending habits from the world’s largest credit rating agency.
On April 8, S&P Global Ratings downgraded BC from AA to AA-minus, the third drop in a row from the firm. Shortly after, Moody’s Investors Service also lowered its rating of the province.
The downgrades increase debt servicing costs for the province, taking away from funds that could otherwise go to infrastructure or other services.
The S&P report said it could lower the rating further unless a better plan to manage provincial deficits emerges.
“We believe that the province’s commitment to fiscal discipline and stability has wavered in recent years as BC has materially increased its spending for both operations and capital investment to unparalleled levels, while economic growth is slowing,” the report said, offering some positive feedback as well. “Overall, BC’s financial planning practices are well aligned with those of domestic peers and are transparent.”
