The influential U.S. bond-rating agency Moody's has restored to Quebec its superior, 1995 presovereignty-referendum rating.
Yesterday's advancement to A1 from A2 marked the first time in 15 years that New York-based Moody's Investors Service Inc. has upgraded Quebec's rating.
The promotion comes after five acrimonious years of budget cuts during which the Parti Québécois government repeatedly clashed with public-sector workers and even left-wing members of the party.
Moody's announcement marks a bittersweet vindication for former premier Lucien Bouchard, who had staked his credibility on improving Quebec's public finances but paid a huge price with his political capital.
Mr. Bouchard, who resigned in January, always maintained that Quebec had to demonstrate its ability to control its finances before gambling on another referendum to leave Canada. By the time the province got a handle on its debt, however, support for secession had deflated.
"The province's improved fiscal position and greater budgetary flexibility, along with a decline in the debt burden, [are]the primary factors in the rating upgrade," Moody's said in a statement.
"The province is now better positioned to operate in what could become less than optimal economic conditions in the near future," the agency also said.
Finance Minister Pauline Marois praised Quebec's new rating. She noted that it will make it easier for the province and its public corporations to borrow money, now that Moody's has deemed Quebec a lesser lending risk.
"This has been a very pleasant day," Ms. Marois said.
Quebec's new A1 rating is one notch below Ontario's Aa3. The best-ranking province is oil-rich Alberta, with its Aaa rate. That is the lowest possible risk assessment, four levels above Quebec's.
Although the sovereignty issue was not directly identified when Moody's lowered Quebec's rating in 1995, the agency said at the time the Parti Québécois government's "comprehensive political agenda" could distract it further from reaching its targets.
Tu Thanh Ha