Sask. gets credit rating upgrade

Saskatchewan has received an improved credit rating for what a bond-rating agency is calling "sound financial management."

On Friday, Dominion Bond Rating Service boosted the Province of Saskatchewan's rating to A (high) from A and said the long-term trend is "stable."

"It's made significant strides in reducing debt, both on a nominal basis and as a percentage of GDP," said Ryan McGaw, an analyst with DBRS.

"The only province that has managed to do something similar is Alberta."

According to DBRS, Saskatchewan's debt-to-GDP ratio is expected to reach 30.1 per cent in 2004-06, less than half the peak of 63.2 per cent reached in 1992-93.

Three provinces have credit ratings higher than Saskatchewan: Ontario (AA), Alberta (AAA) and B.C. (AA). With an A (high), Saskatchewan is tied with Manitoba and New Brunswick.

Saskatchewan's improved credit rating is important because it allows borrowing at more favourable rates. "Over the long term it should improve the cost of borrowing," McGaw said.

DRBS said it expected further reductions in the debt-to-GDP ratio in the years ahead, but further credit-rating upgrades may be harder to come by.

"Further reductions in the province's credit profile will be [slower] due to intensifying pressures for health and infrastructure as well as volatile resource revenues," the company said in a news release.