MONTREAL—Quebec’s corruption crisis has hit the New York rating agencies. Following the resignation of Laval’s long-time mayor on Nov. 9, Standard & Poor’s downgraded the city’s financial outlook due to “uncertain leadership.”
After 23 years as mayor of the burgeoning suburb to the north of Montreal, Gilles Vaillancourt resigned amidst a number of raids by Quebec’s permanent anti-corruption squad on his office, home and safety deposit boxes.
Vaillancourt’s political operation, Parti PRO des Lavallois, was dissolved following the mayor’s resignation. The party had gone without an opposition in council for years and had built up an iron grip on the suburb.
"The outlook revision reflects our view regarding the uncertain leadership that could delay some of council's priorities, especially regarding the 2013 budget," said S&P credit analyst Nineta Zetea on Nov. 15.
With Alexandre Duplessis appointed as interim mayor on Nov. 23 to finish Vaillancourt’s final year in office, a provincial auditor in place and a council now devoid of any political affiliations, S&P signaled alarm to the end of Laval’s “historically stable political climate.”
Downgraded from AA positive to AA stable, the rating agency maintained that the city’s economic outlook was above-average and that much of the uncertainty responsible for the downgrade would be ended by the election of a new mayor in November 2013.
In a word of warning, Zetea said that the rating could slide further if Laval’s political woes continue.
