by Morinville News Staff
Alberta has gone from a stable to a negative outlook according to a report issued by Moody’s Investors Service. Despite the ratings’ agency’s change in outlook, it is maintaining the province’s AAA credit rating.
Joe Ceci, President of Treasury Board and Minister of Finance, issued a statement on the matter Monday afternoon, saying he was pleased Moody’s “reaffirmed” the province’s credit rating, and stating the negative outlook was another consequence of the collapse in global oil prices.
“There is no question that Alberta’s and the broader Canadian economies are now facing serious shocks,” Ceci said i. “We are seeing these shocks play out in the stock markets, in the value of the Canadian dollar, and in the price of oil. These shocks are having a serious effect on government revenues in all energy-producing jurisdictions – including ours.”
Ceci went on to say though the Government of Alberta does not control oil prices; there are measures the government is taking to manage the shocks.
“We have stabilized budgets to protect health care and education,” he said. “We will also carefully manage spending on government programs to ensure government deficits don’t become unmanageable. All government spending programs are under review. There are many important priorities that will have to wait until our finances permit us to address them.”
The Minister of Finance went on to say the province is limiting debt to 15 per cent of GDP, which he said is half the average of Canadian provinces.
But the Wildrose opposition says Moody’s outlook change is the latest indication the NDP government must put together a more aggressive plan to reduce borrowing and program spending, something they say they cautioned the government about last October.
“Wildrose has long warned the NDP government that without taking meaningful steps to control spending, and limit borrowing, it would do damage to investors’ confidence in Alberta’s credit rating,” said Wildrose Leader Brian Jean in a media release Monday afternoon. “With the NDP delaying their royalty review, the legislature and their 2016 budget, investment confidence in Alberta will only continue to weaken until the government puts together a serious action plan.”
The opposition says interest payments on the province’s debt will soon cost more than every other department outside of health, education, post-secondary, and human services.
Ceci says the province is doing what it can within their scope and financial resources to reduce the province’s vulnerability to the current shocks by promoting economic development and diversification.
“I want to reaffirm this government’s commitment to our province and its people – we will continue to put the best interests of Albertans first as we work to build a strong and resilient community,” Ceci said. “It is during times of challenge that Albertans rally together to support one another, and that is what we are going to do.”