New Brunswick

New Brunswick's A+ credit rating confirmed with caution

New Brunswick has held on to its A+ long-term credit rating from Standard & Poor's but will have to reduce and eliminate the deficit to keep it, the credit rating agency says.

Credit report comes with warning the province has to resume path to balanced budget

The province kept its A+ credit rating from Standard & Poor's. (Jacques Poitras/CBC)

New Brunswick has held on to its A+ long-term credit rating from Standard & Poor's but will have to reduce and eliminate the deficit to keep it, the credit rating agency says.

The province's credit rating "A+" is the third-highest rating the province can receive.

Standard & Poor's says the rating means the province is "somewhat more susceptible" to economic conditions but can still meet financial commitments.

Deficit reduction

Cathy Rogers announced in her budget earlier this year that the province would aim to eliminate the deficit by 2022, not 2019 as previously promised. (Gabrielle Fahmy/CBC)

The report says the rating is contingent on future governments continuing to reduce the deficit and get the debt under control.

"The next provincial election will occur in September 2018 and we expect that whichever party forms the next government will continue to work toward improving fiscal sustainability," the agency's report said.

The Liberal government had promised to eliminate the deficit by 2019 but changed its plans earlier this election year. The deficit increased and the target for balancing the budget was moved to 2022.

Standard & Poor's said the credit rating could be at risk if deficit reduction doesn't pick up again.

"We could lower the rating if, in the next two years, the government's priority shifted away from achieving fiscal sustainability, or weaker-than-expected economic performance resulted in stagnant revenue growth."

New Brunswick's accumulated debt is projected to reach $14.4 billion by the end of next April.

NB Power risk

NB Power is listed as a major potential liability for the province. (Serge Bouchard/CBC)

S&P lists public utility NB Power as the "province's largest contingent risk."

S&P cites operating costs, risks of nuclear generation and fossil fuel prices as the factors behind naming NB Power as a risk.

The agency said NB Power could become a "large liability" if it developed financial problems, since the province would likely move in to support it.

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