British Columbia’s credit rating has been cut by two major agencies, with S&P Global Ratings lowering the province’s long-term issuer rating to A+ from AA- and Moody’s Ratings downgrading its baseline assessment to aa2 from aa1.
Both agencies cited the province’s deteriorating fiscal position and expanding deficit as key factors behind their decisions. This marks the fourth downgrade for BC in four years, with S&P maintaining a negative outlook that signals a one-in-three chance of further downgrades within the next two years.
“A lack of a credible medium-term plan outlining how the province will tackle its structural budgetary shortfall could cause us to weaken our financial management assessment,” S&P stated in its report.
Finance Minister Brenda Bailey’s budget forecasts a record deficit of $10.9 billion for the current fiscal year. Moody’s predicted this year’s deficit would soar to $14.3 billion, 31% higher than Bailey’s budget projection last month and 57% above last year’s deficit.
Moody’s attributed the downgrade to “structural deterioration in British Columbia’s credit profile,” pointing to rising debt as evidence of “a continued weakening in governance and fiscal and debt management.”
The province faces challenges including an “uncertain trade environment” that adds further risks to BC’s economic outlook, according to Moody’s, which maintained its negative credit outlook.
Bailey told reporters the government had anticipated the downgrades due to “complex circumstances” posed by Canada-US trade tensions. She insisted BC’s economy “remains strong and resilient,” despite the agencies’ concerns.
Opposition Conservative Leader John Rustad called the downgrades “a direct consequence of reckless spending and economic mismanagement by David Eby,” adding that “British Columbians are paying more and getting less.”
Credit rating downgrades typically make borrowing more expensive for governments. S&P cited “considerable” deficits and rapid debt accumulation with no clear strategy to reduce the fiscal gap.
S&P has also cut BC’s short-term rating to A-1 from A-1+, while Moody’s downgraded long-term issuer and senior unsecured debt ratings to Aa1 from Aaa.
When asked about the agencies’ concerns regarding the absence of a deficit reduction plan, Bailey said her budget “has just gotten started” and emphasized the government’s focus on “protecting core services for British Columbians.”
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