Alberta Finance Minister Joe Ceci says the province’s debt is “manageable” despite criticism from credit rating agencies following last week’s budget announcement.
Agencies including Moody’s Investor Service and DBRS Ltd. say they will review the province’s ratings, which are used to determine its cost of borrowing money, because of its growing debt levels.
FULL COVERAGE: Alberta budget 2017
In a speech to the Calgary Chamber of Commerce, Ceci says he expects Alberta revenues will grow with its economy over time to reduce the deficits.
“I certainly understand, appreciate the credit rating concerns people have, but I think if we keep care of the fundamentals in this province, which is continuing to move forward, continue to have good governance, continue to be an attractor with low taxes, and promote this province to others, we’ll take care of those other things,” he said.
“What we’ll see going forward is an expansion of the economy.”
Chamber president Adam Legge said the budget was based more on hope than being realistic and said the government must work to shrink the gap between revenue and spending.
The province expects a $10.3-billion deficit for the coming fiscal year which starts April 1 and forecasts that its debt will rise to $71.1 billion by 2020.
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“Alberta’s rapidly rising debt burden, protracted deficits and above-inflation expense growth continue to put significant pressure on its rating,” stated Adam Hardi, Moody’s assistant vice-president in a news release on Friday.
“The province’s plan to issue an additional C$38 billion in debt over the next three years to finance its operating deficits and capital plans will contribute to a rising debt burden that may approach 150 per cent of revenues by 2019-20 (on a Moody’s adjusted basis).”