British Columbia will retain its AAA rating despite the defeat of the harmonized sales tax, says credit rating agency Standard & Poor's.
An AAA rating reflects "extremely strong capacity to meet financial commitments," according to S&P's website.
Regarding its decision to continue the top-level rating for B.C., the agency said the province has the solid revenue and expenditure flexibility necessary to meet its deficit targets and a moderate tax-supported debt burden.
But it said B.C. faces new challenges - the loss in revenue; the initial administrative costs of transitioning back to a PST-plus-GST tax system; plus the likelihood of having to repay $1.6 billion in HST transitional funding from the federal government.
B.C. Finance Minister Kevin Falcon welcomed S&P's statement. "I believe this is a reflection of the fiscally conservative approach we have taken over the past decade," he said in a press release. "During this time of global economic uncertainty, our credit rating is more important than ever and we will continue to manage taxpayer dollars responsibly while we focus on strengthening our economy and creating jobs."