Debt refinancing a shadow over next budget: Alberta finance minister

The upcoming budget process for Alberta’s finance minister could mean some difficult decisions are to come in a time of financial headwinds.

Speaking to the Calgary Chamber of Commerce, Finance Minister Nate Horner said he’s looking forward to his first budget process in the position, but anticipated some challenges for the 2024 spending plan.

“Our debt refinancing obligations over the next three years are very great. We have $26.5 billion to refinance in the next three years,” Horner said.

He said the interest rates the province is facing to refinance that debt – usually held in 10-year bonds – which were previously in the low two per cent range are anticipated to be in the mid- to high-four per cent range. Horner described the increased refinancing costs as “huge” but provided no other details.

Calgary chamber president and CEO Deborah Yedlin asked Horner what sort of assistance the province might be able to give businesses who are repaying Canada Emergency Business Account (CEBA) loans from early in the COVID-19 pandemic.

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The forgiveness repayment date was extended to Jan. 18, 2024, for accounts in good standing, and the rest of the loans have to be repaid by the end of this year.

“We’ve had conversations with ATB and others, but at this point it’s unclear if we’ll be able to provide any kind of a gap vehicle to help those businesses,” the finance minister said, noting the exact number of loans and loan amounts that would need assistance remains unclear.

Horner said he anticipates the province to reinstate the provincial fuel tax on gasoline and diesel at the start of next year and anticipated the government will continue reviewing possible relief based on the average price of WTI.

“We will continue to look for ways to (help with affordability). But I think that the biggest thing I can do in this role is keep people’s taxes low. It’s the biggest, biggest cost that they pay any family plays over the course of the year.”

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Opposition finance critic Samir Kayande said families and small businesses are in an affordability crisis.

“I think that we have to use all of our levers that are available,” Kayande told reporters after Horner’s speech.

“We really need to be looking at a lot of our options in order to figure out what the right thing to do to support Alberta families is.

“First thing we need, though, we need a government that cares about them. And I think that’s what’s really missing here is we don’t have a government that cares enough to actually look at all the policy options.”

Horner said he hopes Albertans are confident that the government won’t take on more debt “if we can avoid it at five per cent.”

“We’re going to do the difficult things and run a very fiscally conservative budget that tries to address all of these challenges and make sure that our ministers and every member of government sees that it’s all about tradeoffs.”

Horner also anticipated negotiations of five “big” collective agreements to be another challenge for his portfolio in the coming year.