Ceci meets agencies, but won’t alter course
Finance Minister Joe Ceci says the Alberta government won’t change its fiscal course despite the possibility of a further credit downgrade.
Ceci was in Toronto Monday to meet with rating agencies Standard and Poor’s, DBRS Limited and Moody’s Investors Service.
All three have previously downgraded Alberta’s credit rating, with criticisms of the NDP government’s lack of action on reducing the province’s debt and deficit.
Following the March provincial budget, which projects $10.3 billion in red ink for 2017-18, the agencies raised further concern about the province’s bottom line.
Speaking to reporters on a conference call, Ceci said the agencies gave no indication Monday that a further downgrade is coming and that each had more work to do reviewing Alberta’s books over the coming weeks.
The NDP government has vowed to maintain public services without significant spending cuts, forecasting a return to balanced budgets in 2023-24 based on longterm restraint and rebounding economic growth.
“We have a clear plan to return to balance,” said Ceci of his meetings. “We were sharing what that plan was and I was clear throughout that we will continue to have the backs of Albertans throughout this difficult time for Albertans and companies.
“They didn’t share any disagreement or disappointment with our plan ... they were asking for further elaboration to understand the fundamentals that we built our plan on.”
After two years of recession spurred by low oil prices, the government is projecting 2.6 per cent economic growth for 2017.
Last April, DBRS downgraded Alberta’s top-grade rating, as did Moody’s Investor Service, due to concerns about debt in the 2016 budget. The following month, Standard & Poor’s changed the province’s rating from AA-plus to AA. It had already taken away Alberta’s AAA rating in December 2015.
A credit downgrade raises the cost of borrowing for the province. Rachel Notley’s government has pumped up borrowing to pay both for operations and for a massive public infrastructure agenda, with the province forecasting debt to hit $71.1 billion by 2019-20.
Ceci said another credit downgrade would be “disappointing.”
“However, even with a downgrade ... we’d still have a very good credit rating and a strong balance sheet relative to the rest of the provinces in Canada,” said the Calgary-Fort MLA.
Progressive Conservative MLA Ric McIver said he fully expected another credit downgrade caused by an “incompetent” NDP administration. “They’re pushing Alberta another $10-plus billion into deficit with absolutely no plan to balance,” he told reporters at the legislature.
Ceci also met Monday with investors from CIBC Asset Management, Manulife, Sun Life, TD Asset Management, and TD Securities. On Tuesday, the minister will meet with Scotiabank and the Ontario Teachers Pension Plan.