by Stephen Dafoe
The Canadian Taxpayers Federation (CTF) says the province’s credit downgrade from an A+ t an A by bond rating agency S&P Global is a sign it’s time for the province to find savings.
“The downgrade is a clear signal that it’s time for Premier Jason Kenney to take the province’s debt problem serious and find savings,” said Franco Terrazzano, Alberta Director for the CTF. “The Blue Ribbon Panel made it clear that Alberta has a huge spending problem, but so far we’ve seen a lack of effort from this government to find savings.”
The S&P report says Alberta’s operating and after-capital deficits (the largest of any local and regional government in the country the last two years) caused them to lower the stand-alone credit profile by one notch.
Alberta’s debt is expected to hit $116 billion and interest rates reaching $2.8 billion by the end of the 2021-2022 fiscal year.
“It was important for the government to find savings before COVID-19, and it’s even more important now that the government’s debt has passed the $100-billion mark,” Terrazzano said. “The credit agency singles out the big deficit and that’s a problem this government needs to take very seriously.”
CTF cites the Blue Ribbon Panel on Alberta Finances, stating Alberta could shave $10 billion annually by bringing per person spending in line with Quebec and Ontario.
“Albertans are already losing billions of dollars to pay interest charges on the debt so it’s important for the government to get a handle on the situation before things get any worse,” Terrazzano said. “Families and businesses can’t afford higher taxes, so Kenney needs to find savings to address the $100-billion debt problem.”