The Canadian Taxpayers Federation is providing comments after the provincial government's credit rating was recently upgraded, February 27, 2023. (Photo: Lethbridge News Now)

By David Opinko

Taxpayers Federation says improved credit rating a good sign for Alberta

Feb 27, 2023 | 12:30 PM

EDMONTON, AB – The Canadian Taxpayers Federation (CTF) is praising the Government of Alberta’s fiscal management.

This comes after credit rating agency Moody’s recently upgraded the government’s credit rating from Aa3 to Aa2, and one day before the new provincial budget is set to be unveiled.

CTF Alberta Director Kris Sims says credit upgrades are important because they influence how much money the government needs to spend on debt interest charges.

“Alberta’s recent credit upgrade signals the province is back on track towards a time when the premier can hold a “paid in full” sign in the air again,” says Sims. “Good budgeting and taxpayer protections can ensure we get back to black and not repeat the sins of the past.”

Sims cites a Government of Alberta document that explains that the province is set to pay $2.6 billion in interest payments in 2023, averaging approximately $565 per Albertan.

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Moody’s says in an investor’s notice that Alberta’s debt situation is expected to improve over the next few years.

“Following record deficits in 2019-20 and 2020-21, the province returned to balance in 2021-22, several years ahead of its earlier projection,” says Moody’s.

The agency adds, “The stable outlook reflects Moody’s view that the fiscal improvements from continued projected surpluses and significantly lower debt levels over the next two years will allow the province to balance the key pressures from inflation and fluctuating resource prices.”

Moody’s cites sustained high oil prices that are above pre-pandemic levels as a significant factor in the province’s improved situation. However, it notes that Alberta continues to face volatility in oil revenues.

It says the government now forecasts a record surplus of 16 per cent of revenues for the 2022-23 fiscal year, and continued surpluses in 2023-24 and 2024-25, averaging 7.9 per cent of revenue.

Moody’s says revenue growth over the next two years will help to alleviate inflationary pressures in Alberta, resulting in sustained budget surpluses.

Alberta will also benefit from what Moody’s says are “highly-predictable fiscal transfers from the federal government.” Moody’s credit update was published prior to the announcement on February 27, 2023, that the Governments of Alberta and Canada had signed a new $24 billion healthcare funding deal.

READ MORE: Alberta signs $24B, 10-year health-care funding deal with Ottawa

Alberta Finance Minister Travis Toews is set to unveil the new provincial budget on Tuesday, February 28, 2023. He said last month that it would focus on investments into healthcare and school enrolment growth.

This will be the last provincial budget prior to the Alberta provincial election on May 29, 2023.

READ MORE: Alberta budget set for Feb. 28, with focus on funding for health, school growth