TEXT-S&P: Canadian provinces continue with small steps to recovery

Thu Dec 20, 2012 3:17pm EST

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Dec 20 - Canadian provinces made more progress in fiscal 2012 on the road to
fiscal recovery as key financial parameters continued to rebound from the Great
Recession. Although each province's performance varied, overall operating
surpluses increased and after-capital deficits declined because operating
revenues increased faster on average than expenditures did for the second
consecutive year. Most provinces appear to be on track to meet their stated
targets for returning to budgetary balance.

However, Standard & Poor's Ratings Services said in a report released today 
that it believes dimmer economic prospects in the second half of 2012, both in 
North America and around the world, will likely make it harder to keep up the 
fiscal momentum.

"The issue of rising debt burdens is also looming larger," Standard & Poor's 
credit analyst Stephen Ogilvie said in the report, entitled "Canadian 
Provinces Continue With Small Steps Toward Recovery In Fiscal 2012." Total 
tax-supported debt burdens rose again in fiscal 2012 for the fifth consecutive 
year. Some provinces have tax-supported debt burdens at levels not seen since 
the mid-1990s. "We believe that provinces will need to remain focused on cost 
containment long after they achieve fiscal balance if their tax-supported debt 
burdens are to fall again," Mr. Ogilvie added. 


The report is available to subscribers of RatingsDirect on the Global Credit 
Portal at www.globalcreditportal.com. If you are not a RatingsDirect 
subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 
or sending an e-mail to research_request@standardandpoors.com. Ratings 
information can also be found on Standard & Poor's public Web site by using 
the Ratings search box located in the left column at www.standardandpoors.com.
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