Reality Check | B.C.'s credit rating
Over the next five weeks of the B.C. provincial election campaign, CBC’s Reality Check team will be testing the claims made by the political parties.
Moody's historical ratings
- Oct. 2006: AAA
- March 2005: AA+
- May 1997: AA
- Aug. 1989: AA+
First up — comparing the 1990s NDP to the B.C. Liberals’ first decade in office.
While the 1990s is a decade the New Democrats hope voters forget, it’s one the B.C. Liberals want them to remember.
"You know how we got six consecutive credit downgrades in the 1990s?" B.C. Liberal Leader Christy Clark said at a recent leaders’ dinner. "We got it one practical step at a time."
CBC News put that claim to the test.
In the first half of the 1990s, B.C.'s NDP government boasted the highest credit rating in Canada at a time when no province rated above AA.
But when the NDP failed to deliver a promised surplus in 1996 — amidst an Asian market collapse and the leaky condo crisis — things started to change.
DBRS historical ratings
- 2011: AA+
- 2010: AA+
- 2009: AA+
- 2008: AA+
- 2007: AA+
- 2006: AA
- 2005: AA
- 2004: AA-
- 2003: AA-
- 2002: AA-
- 2001: AA-
- 2000: AA-
- 1999: AA-
- 1998: AA
- 1997: AA
- 1996: AA
- 1995: AA
- 1994: AA
- 1993: AA
- 1992: AA
- 1991: AA
- 1990: AA
- 1989: AA
- 1988: AA-
- 1987: AA-
Rating agency Moody’s only downgraded B.C.’s long-term foreign currency credit rating once in the 1990s, in May of 1997.
At the same time, Standard and Poor’s dropped B.C. to AA from AA+.
A year later, The Canadian Bond Rating Service followed suit.
In April 1999, the CBRS, Standard and Poor’s and the Dominion Bond rating service all downgraded B.C. to AA- after the NDP delivered its eighth deficit budget.
In other words, four separate agencies lowered B.C.’s credit rating on three occasions — for the same reason — which isn’t quite the same as six consecutive credit rating downgrades.
Helmut Pastrick, chief economist at Central 1 Credit Union, says the downgrades were likely as a result of factors out of the government's control.
"Policies do matter, but I think for the most part it tends to be the state of the economy, typically external factors count more, through the commodity and trade channels, and of course the domestic economy soon follows once there is a more of an external macro economic downturn then the domestic economy follows as well."
It wasn’t until 2006, after the fallout from 9-11 and the U.S. housing crisis, that Gordon Campbell’s Liberal government earned B.C. an AAA credit rating.
CBC's Reality Check team has determined Clark's statement, while technically correct, is political spin.