Released on May 8, 2002
After reviewing the province's 2002/03 budget, the influential Moody'sInvestors Service has upgraded Saskatchewan's credit rating from A1 to
AA3. This marks the province's 10th credit rating upgrade since 1995.
In announcing the upgrade, Moody's stated: "More significant for the
Saskatchewan upgrade is steady improvement in the province's fiscal
position - paralleling trends evident in other provinces - reflecting
prudent policies that have produced budgetary surpluses and a reduced debt
burden. This improvement strengthens the province's ability to withstand
temporary adversity in its operating environment.
"Today's rating upgrade to AA3 for the Province of Saskatchewan is
consistent with the established pattern," Moody's added, referencing its
previous credit upgrades for the province in 2000 and 1998.
Finance Minister Eric Cline noted the upgrade represents a vote of
confidence in the government's balanced approach to financial management.
"This validates the path we've been on since 1994/95 - a trend of balanced
budgets, keeping debt under control, affordable tax cuts, and increased
spending on priority areas like health and education," Cline
said. "Saskatchewan people can take satisfaction from this upgrade. It is
an independent confirmation that we're on the right track, despite the
fiscal challenges we face this year."
Moody's also noted that "over the past several years, a series of modest
surpluses combined with strong economic growth has resulted in a marked
improvement in Saskatchewan's debt profile. Saskatchewan's debt-to-GDP
ratio has fallen from over 50 per cent in 1994 to 31.8 per cent in 1998,
28.4 per cent in 2000 and to less than 25 per cent (estimated) in 2002."
Moody's also commended the Crown Investments Corporation for rationalizing
and restructuring operations and investments in the Crown corporations, and
reducing the province's guaranteed debt exposure.
Cline said the upgrade sends a clear signal to investors and potential
investors that Saskatchewan is making solid progress on the financial and
economic fronts.
"Economic growth and good money management go hand in hand," Cline said,
noting Saskatchewan posted an average annual real economic growth rate of
3.5 per cent from 1992 to 2000, the third highest among the provinces.
"When our credit rating was plummeting during the latter half of the '80s,
our economy was contracting rather than expanding. Sound financial
management has tangible benefits. Poor money management carries a price
tag."
-30-
For more information, contact:
Roy Schneider
Saskatchewan Finance
Regina
Phone: (306) 787-8109