By CHAT News Today

DBRS reduces Alberta’s credit rating following fiscal update

Nov 29, 2017 | 2:00 PM

EDMONTON — Alberta’s credit rating has been downgraded one day after it released its second-quarter fiscal update.

Credit agency Dominion Bond Rating Service (DBRS) announced Wednesday the province’s credit rating has been downgraded from AA (high) to AA, citing the $10.3 billion deficit, and rapid debt accumulation.

“DBRS has maintained the Negative trend because the Province has yet to demonstrate any real willingness to address the weakest budget outlook among all provinces, despite high levels of per capita spending and the lowest tax burden in the country,” the agency says in a news release.

“DBRS is concerned that the plan to return to balance relies on a recovery in resource revenues, rather than fundamental adjustments to the budget. As a result, debt will continue to rise and there is no clarity as to when the credit profile will stabilize.”

The downgrade means a higher cost for taxpayers to fund the provincial debt.

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Finance Minister Joe Ceci responded to the downgrade on Wednesday, saying the province’s credit rating remains among the highest in the country and Alberta has the lowest debt-to-GDP ratio in Canada.

“The fiscal update released yesterday shows that Alberta’s economy is growing faster than forecast, the deficit is coming down, and significant cost savings are being realized,” he said in a news release.

“The government will continue to take a steady and responsible approach that avoids extreme and risky cuts that would hurt families, cost jobs and damage our recovery.”