October 2010 Maritime Economic Fundamentals
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Red ink set to swamp New Brunswick
OTTAWA - Newly elected New Brunswick premier David Alward received a wake-up call yesterday as Standard & Poor`s said its outlook for the province had turned negative amid a rising tide of red ink.
Mr. Alward, who is yet to be sworn into his new post, rode to victory last month on voter anger over plans to sell the provincial power utility to Quebec in an effort to pay down the province`s $8-billion-plus debt. Analysts say Mr. Alward now faces tougher choices if the province hopes to avoid a cut to its credit rating -- which would boost the cost of financing the province`s debt.
New Brunswick will not be alone, as other provinces, mostly in Central and Atlantic Canada, will too be compelled to take another look at their spending priorities as tax receipts from individuals and companies in the coming years may not be as robust in the face of a weaker-than-expected economy.
"The sluggish growth outlook means spending restraint will be absolutely required to meet the goals" provincial governments laid out in recent budgets, said Robert Kavcic, an economist at BMO Capital Markets.
S&P said yesterday it was downgrading its outlook for New Brunswick to "negative" from "stable," although it reaffirmed the ratings on New Brunswick debt.
Read the full article here.
OTTAWA - Newly elected New Brunswick premier David Alward received a wake-up call yesterday as Standard & Poor`s said its outlook for the province had turned negative amid a rising tide of red ink.
Mr. Alward, who is yet to be sworn into his new post, rode to victory last month on voter anger over plans to sell the provincial power utility to Quebec in an effort to pay down the province`s $8-billion-plus debt. Analysts say Mr. Alward now faces tougher choices if the province hopes to avoid a cut to its credit rating -- which would boost the cost of financing the province`s debt.
New Brunswick will not be alone, as other provinces, mostly in Central and Atlantic Canada, will too be compelled to take another look at their spending priorities as tax receipts from individuals and companies in the coming years may not be as robust in the face of a weaker-than-expected economy.
"The sluggish growth outlook means spending restraint will be absolutely required to meet the goals" provincial governments laid out in recent budgets, said Robert Kavcic, an economist at BMO Capital Markets.
S&P said yesterday it was downgrading its outlook for New Brunswick to "negative" from "stable," although it reaffirmed the ratings on New Brunswick debt.
Read the full article here.