Alberta’s credit rating took a hit from the pandemic and lingering impacts from the 2014 drop in oil prices.
S&P Global Ratings, a major U.S.-based credit agency, said this week that Alberta’s budget was shaken harder than expected by COVID-19.
With expanding debt burden, shrinking revenue, and more government spending in this province, Alberta’s credit rating was reduced to A from a previous A-plus. And S&P warned that further downgrades are possible unless new fiscal measures are adopted to help Alberta speed up its post-pandemic recovery.
The provincial economy was among the worst in the country in 2020 and is expected to lag behind the national average growth rate in 2021. Alberta’s economy could still be behind other provinces at the end of the 2023-2024 fiscal year.
The Alberta New Democrat opposition blamed the UCP government for “completely mismanaging the pandemic and failing to protect public health or our economy.”
But Alberta Finance Minister Travis Toews said while presenting the provincial budget in February, that his government had no choice but to delay steep spending cuts in the midst of a health crisis.
Alberta is expected to finish the 2021-2022 fiscal year with a deficit of about $20 billion — nearly triple the pre-pandemic projections.