A nice summary of an awful situation...
Rob Shaw: Credit agencies are sounding alarms and Eby isn’t listening
Moody’s downgrade adds to mounting credit concerns as the NDP government defends record deficits and rising debt
Premier David Eby is brushing off yet another credit rating downgrade—the sixth negative action from three different financial agencies since taking over the government four years ago.
Moody’s Ratings
downgraded the province from AA2 to A1 on Thursday due to a “marked deterioration in the province’s credit fundamentals” in the wake of the Feb. 17 budget, with its projection of a $13.3-billion deficit and skyrocketing debt.
“We expect sizeable and entrenched deficits for the province over the next three fiscal years, reflecting continued spending growth in healthcare, social programs and housing affordability initiatives,” the agency wrote, adding it “indicates a protracted series of deficits could continue beyond the current fiscal plan.”
It’s the latest bad news for the Eby government stemming from last month’s disastrous provincial budget. A recent poll indicated British Columbians think it’s the
worst budget since the harmonized sales tax budget of 2010. It continues to get criticized for $1 billion in new tax hikes, cuts to affordable housing programs, and still posting the largest deficit in provincial history at $13.3 billion.
Credit rating downgrades make it more expensive for the B.C. government to borrow money and fund its debt for capital projects like hospitals, transit and schools. Annual government interest payments already sit at $6.5 billion and are set to surpass the Ministry of Social Services and Poverty Reduction as the third most expensive ministry in government, according to the budget.
Eby on Thursday blamed an “array of reasons” for an “incredibly challenging budget,” including “big pressure on our health-care system,” which currently makes up 40 per cent of all spending.
vancouversun.com
