Alberta’s credit rating has been downgraded again, from AA (high) to AA.
Monitoring agency DBRS says it could continue to slide if things do not change.
Spokesperson Paul Lebane said they last downgraded Alberta’s rating in 2015, after the big slide in oil prices.
This time around, it has less to do with the price of oil, and more to do with the province’s handling of finances.
“Up until now, they’ve been signalling that their intention is to return to balance, but we haven’t seen credible action or we haven’t seen a real meaningful plan to do so, so, I think in our view, what we are looking for is a well-defined plan for the coming years about how they’ll achieve that,” Lebane said.
He said the agency also has the province trending down, meaning further downgrades could come within the next year, though Lebane doesn’t think it will be that soon.
He also points out, AA is still a very strong rating and there is still lots of debt room available for the province to use, while it figures out how to balance the books.
Finance Minister Joe Ceci released this statement about the credit rating downgrade:
“Alberta’s economy is looking up, with 70,000 new full-time jobs. With the recession behind us, we are carefully tightening our belts to balance the budget while protecting health care and education.
Alberta’s credit rating remains among the highest in the country and our balance sheet is the strongest among provinces, with the lowest debt-to-GDP ratio.
The fiscal update released yesterday (Tuesday) shows that Alberta’s economy is growing faster than forecast, the deficit is coming down, and significant cost savings are being realized.
The government will continue to take a steady and responsible approach that avoids extreme and risky cuts that would hurt families, cost jobs and damage our recovery.”
