NDP budget sets the stage for more credit downgrades: Wildrose
The NDP government’s budget is already raising alarms and drawing warnings from major credit agencies, the Wildrose Official Opposition said today.
Alberta’s credit rating was downgraded three times in 2016 by agencies such as Standard & Poor’s, DBRS and Moody’s, following the release of the NDP government’s first, full budget. Now, with Alberta’s deficit projected to hit $10.3 billion in 2017-18 and debt set to skyrocket to an unprecedented $71 billion by 2019-20, significant warnings are being issued again.
“Alberta’s rapidly rising debt burden, protracted deficits and above-inflation expense growth continue to put significant pressure on its rating.” –Moody’s March 17, 2017 “
This erodes Alberta’s low debt advantage relative to provincial peers. In the absence of meaningful action to address the budget deficit and to slow debt growth, Alberta’s debt may exceed levels acceptable for the current ratings.” –DBRS March 17, 2017
“Alberta’s credit rating took a thrashing in 2016, and 2017 is already shaping up to be more of the same under the NDP’s mismanagement,” Wildrose Leader Brian Jean said. “This rapid pace of decline for our credit status will mean significant money will be pulled out of the pockets of real Albertans for decades to come. The saddest part is that the NDP doesn’t seem to care.”
Wildrose Shadow Finance Minister Derek Fildebrandt said the NDP government urgently needs to find a way to cut spending and restore Alberta’s reputation in the eyes of the international finance community.
“The NDP refuse to heed the warnings of Wildrose and credit rating agencies that its actions could lead to yet another expensive credit downgrade,” Fildebrandt said. “This government is playing Russian Roulette with the sustainability of Alberta’s finances and billions of taxpayers’ dollars.”
Under the NDP government’s current rate of spending, Alberta families are set to spend $2.3 billion per year in debt servicing costs by 2019. Any future credit downgrades will increase that number even if borrowing stays the same.