EDMONTON — Alberta has been hit with another credit downgrade one day after it confirmed it remains on track for a $10.3-billion budget deficit this year.
The credit rating agency DBRS say it has downgraded Alberta’s long-term debt rating to AA from AA (high) and has adjusted or maintained other ratings indicators on a negative trend.
The agency said the downgrade reflects the high operating deficits and Alberta’s rapidly accumulating debt, which is pegged to surpass $42 billion by the spring.
It’s one of a number of credit downgrades or warnings that have resulted from the province’s fiscal direction under Premier Rachel Notley’s NDP since 2015.
Although the economy has been hammered by low oil prices, Notley’s government says it makes sense in the short term to take on debt to catch up on long-delayed infrastructure projects.
Finance Minister Joe Ceci, responding to the downgrade, says Alberta still has the strongest debt-to-GDP ratio among provinces and the province’s credit rating remains among the highest 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,” Ceci said in a statement.
“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.”