Moody’s cites weak economy in downgrading Alberta credit rating

EDMONTON – The Alberta government’s credit rating has taken another hit.

Moody’s Investors Service has downgraded the province’s rating to Aa2 stable from Aa1 negative.

The rating service cites weakness in the provincial economy that remains concentrated and dependent on non-renewable resources mainly oil.

It says reliance on such resource revenue causes volatility in financial performance and remains pressured by a lack of sufficient pipeline capacity to transport oil efficiently.

Moody’s also says continued deficits will lead to the province’s debt burden stabilizing at higher levels.

United Conservative Finance Minister Travis Toews blamed the lower rating, which affects how much interest the government pays on borrowed money, on previous governments.

“This decision shows how previous governments’ fiscal mismanagement and inability to gain market access for Alberta’s energy continues to affect our province,” said Toews.”Over the past four years, the previous government drove Alberta into a fiscal crisis with policies that weakened growth and business competitiveness. That’s why balancing Alberta’s budget, growing the economy and creating jobs are our top priorities.”

Shannon Phillips, NDP Finance Critic, said the credit downgrade is proof that the UCP’s economic plan is not working.

“The $4.7 billion corporate giveaway has created no jobs to date, and this government’s corruption and pro-separatist rhetoric has chased away investors,” she said.

“With cuts to social programs, Jason Kenney seems content to move our province backwards while increasing the deficit by $2 billion. The UCP debt is virtually the same as the NDP, but the difference is the UCP blew a hole in the budget, has no diversification plan, has presided over thousands of job losses with no end in sight,”

(With file from The Canadian Press, Alberta Government and NDP media releases)