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Alberta’s Credit Rating Nosedive Demands Action


Brock Harrison

If Equifax and TransUnion called you tomorrow to tell you they’d downgraded your credit, what would you do? Probably panic first, right? You’d break into cold sweats and start concocting worst case scenarios in your head of being unable to service your debt and what that would mean for your family.

Then you’d probably make a plan to avoid that fate. You’d start by taking a hard look at your monthly spending, deciding where you can cut back, considering supplemental income possibilities, and planning for how you can start repaying what you owe.

Such corrective action is survival instinct kicking in. You do what you have to do to stay alive. Or, if you’re business, to stay afloat. Unfortunately, this seems to be an instinct our provincial government lacks.

On Nov. 29, credit rating agency DBRS announced it had downgraded Alberta’s credit rating for the second time in two years. Lest you think it was the work rogue creditors, two other major credit agencies – Standard & Poor’s and Moody’s – have also lowered Alberta’s credit score of late.

Credit downgrades have almost become quarterly rituals in Alberta. Professional creditors who analyze the financial risk of lending massive sums of cash to governments are en masse raising the red flag on debt-plagued, cash-strapped Alberta. Just like a consumer or business credit rating, these downgrades will make it more expensive for Alberta to keep borrowing.

Here is just a sample of some of the judgments these agencies have rendered on Alberta:


  • “The downgrade of Alberta’s credit rating, along with our negative outlook, reflects the province’s growing and unconstrained debt burden.” – Moody’s, April 25, 2016


  • “Alberta’s projected deficits after (capital expenditure) over the next two years are among the highest of rated non-U.S. local and regional governments and, absent other measures, our expectation is that this will lead to further rapid growth in the province’s debt burden.” – Standard and Poor’s, May 26, 2017


  • “The province has yet to demonstrate real willingness to address the weakest budget outlook among all provinces. Alberta’s fiscal outlook remains the weakest among all provinces and risks remain tilted to the downside.” – DBRS, November 29, 2017

Translating the accountant-speak into plain English, Alberta’s borrowing is out of control, it’s fiscal framework is falling apart, and it currently has no plan to fix any of it.

Whereas most families and businesses confronted with failing credit and ballooning interest payments would do something about it, the Alberta government remains steadfastly committed to an utterly hopeless fiscal policy. After each of Alberta’s four credit downgrades since 2015, Finance Minister Joe Ceci has slapped down any talk of altering his fiscal course.

Alberta’s deficit crested $10 billion this year and our debt load has reached a staggering $45 billion. By 2020, Alberta will spending $2.3 billion on debt servicing alone – which will make interest payments the fourth largest government expenditure behind only health care, education, and social services. The pile of cash we’ll be lighting on fire will exceed what we spend on tourism, energy, and economic development combined.

Credit agencies have repeatedly warned us that, at some point, this will catch up with us. Alberta is on a collision course with fiscal reality. It’s too bad our NDP government wants to accelerate the impact.