Moody's upgrades Alberta's credit rating, cites billions in debt repayment
According to the CTF, 'Debt needs are estimated to be $11 billion lower between 2022-23 and 2024-25 as the province is looking to prioritize repaying maturing debt obligations from its surpluses and cash position.'
The Canadian Taxpayers Federation (CTF) applauded the Alberta government after receiving a credit upgrade from Moody's, the international credit rating agency.
"It's encouraging to see the province's credit rating getting a boost because the Alberta government is paying down debt, keeping taxes low and saving money in the Heritage Fund," said Kris Sims, Alberta Director of the CTF.
"Credit ratings matter because Albertans already pay billions of dollars on interest payments every year, and the less money we waste to pay debt interest charges, the better."
Moody's upgraded Alberta's credit rating from AA3 to AA2 late Thursday.
"Alberta's tax regime remains highly competitive relative to most provincial peers given a lack of sales tax and favourable corporate and personal income tax rates," reads the announcement, citing debt repayment as a positive factor.
According to the CTF, "Debt needs are estimated to be $11 billion lower between 2022-23 and 2024-25 as the province is looking to prioritize repaying maturing debt obligations from its surpluses and cash position."
The province expects to rake in $28.1 billion in non-renewable resource revenue, about 70% coming from the oilsands, where several projects have reached a stage where their royalty obligations increase.
Resource-driven prosperity allowed the UCP to set aside $2.8 billion over three years to cover several affordability measures rolled out in the fall of 2022. Another $5.8 billion has been set aside in savings, its final destination to be determined later.
Even after reducing the projected surplus by $1 billion from the first-quarter estimate because of softening oil prices, Alberta is launching a $12.3 billion surplus.
The Alberta government is projected to pay down $13.4 billion of debt, which would be the largest debt repayment in the province's history. The government has committed to allocating another $10.8 billion over the next three years toward savings and debt reduction.
In 2023, the interest on the Alberta government's debt costs taxpayers $2.6 billion.
"In the face of a potential global recession, Albertans can rest assured our province is in the best position possible due to our focus on responsible fiscal management over the last three years," said Finance Minister Travis Toews at the November fiscal update. "By investing in savings and reducing debt for future generations, we continue to make Alberta the best place to live, work and raise a family."
Toews attributed Alberta's oil-fueled prosperity to the province reducing its provincial debt by $13.3 billion by the end of March to $79.8 billion.
"This is good news for Albertans," he said.
"The Alberta government is on the right track by lowering taxes, paying down the debt and saving money for the future," added Sims. "It's important for the government to ensure this fiscal discipline lasts by using balanced budget legislation and the Taxpayer Protection Act."
Don't Get Censored
Big Tech is censoring us. Sign up so we can always stay in touch.
Don't Get Censored
Big Tech is censoring us. Sign up so we can always stay in touch.