Alberta Finance Minister Nate Horner has responded to the government's credit rating upgrade. (Photo: Canadian Press)

By David Opinko

Alberta’s credit rating improves for the fourth time in one year

Jul 23, 2024 | 5:58 AM

One credit rating agency says it is becoming increasingly confident in the Government of Alberta’s fiscal management.

Moody’s Rating has upgraded its outlook on the provincial government from stable to positive.

“The positive outlook reflects our view that if Alberta adheres to the governance controls as per its fiscal framework introduced in 2023, its debt and liquidity levels could be stronger than we currently project,” reads a statement from Moody’s.

Alberta is one of only two Canadian provinces that Moody’s says is already in budgetary balance.

They say their issuing of high credit ratings reflects continued fiscal surpluses, moderate debt burden, high levels of cash and investment, a competitive economy, and a solid institutional framework.

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The positive outlook is also due to oil prices and revenues being higher-than-anticipated.

Moody’s states its appreciation for the UCP government committing 50 per cent of its annual surpluses to savings while putting the remaining half towards debt repayment.

Alberta Finance Minister Nate Horner says the credit rating upgrade is affirmation that the government is on the right track.

“I am pleased to see that Moody’s Ratings has upgraded Alberta’s credit rating outlook to positive from stable and confirmed our Aa2 standing, recognizing our commitment to balance the budget, control spending and pay down debt,” says Horner. “This is our fourth credit upgrade in the last year, and fifth in the past 18 months.”

The Alberta Government ended the 2023-24 fiscal year with a $4.3 billion surplus.

Horner says Alberta’s future is bright but the government has to continue to be responsible stewards of taxpayer dollars.

READ MORE: Alberta announces final numbers for fiscal year, including $4.3B surplus

Meantime, the Canadian Taxpayers Federation is applauding the provincial government for its latest credit rating outlook improvement.

“The province is getting this positive assessment from credit rating agencies because the government has a balanced budget and is restraining spending,” said Kris Sims, CTF Alberta Director. “Strengthening balanced budget legislation to curb spending was the right move.”

On Monday, Moody’s Ratings changed Alberta’s credit rating outlook to positive, up from stable and affirmed the province’s AA2 credit rating.

Moody’s cited the province’s balanced budget, spending restraint and debt payment rules as reasons for the improvement.

“The positive outlook reflects our view that if Alberta adheres to the governance controls as per its fiscal framework introduced in 2023, its debt and liquidity levels could be stronger than we currently project,” the report from Moody’s reads.

The CTF says it has been urging the Alberta government to keep spending increases below inflation plus population growth since the mid 1990s.

The Alberta government passed its balanced budget and spending restraint legislation last year.

The CTF says the positive outlook from Moody’s follows a recent upgrade from the credit ratings agency, Fitch.

The CTF says interest charges on the provincial government’s debt will cost taxpayers $3.1 billion this year, according to government’s year-end report.

“Credit ratings matter because Albertans pay billions of dollars on debt interest charges every year,” Sims said. “Better credit ratings could make it less expensive to make payments on the debt, and the less money we waste on interest charges, the better.”