President of Treasury Board and Minister of Finance Joe Ceci issued the following statement about Moody’s credit downgrade.
“Today’s credit rating downgrade is a disappointment. Around the world, companies and governments engaged in petroleum production are facing ratings downgrades. In Alberta, we are in a better position than most to manage these pressures, while we work to make Alberta less vulnerable to selling one commodity at one price.
“The bottom line is that we had a choice. We could have raised taxes, fired teachers and nurses, and made reckless cuts to social services. We could have cancelled our entire job creation and stimulus plan as some would like.
“But Albertans need jobs. That’s why our Alberta Jobs Plan supports families while investing in growing employment over the next three years through a $34.8 billion infrastructure plan and innovative business supports like our Alberta Investor Tax Credit.
“Investing in long-term care and affordable housing will also cut government operating costs in the long run, while building a fairer and more resilient Alberta. In a low interest environment, these infrastructure investments will help put Albertans to work while catching up on long-term care and school construction.
“Albertans have been clear: they want government to responsibly manage debt levels while working hard to support diversification in a growth-oriented business environment. We have the strongest balance sheet in the country and net assets of nearly $50 billion. The budget released last week clearly demonstrated our commitment to getting costs under control, especially in health care, by cutting spending growth to an average of two per cent over the next three years. This is in stark contrast to six per cent average growth in the prior six years.
“The province’s bond holders have long priced the effect of volatile resource revenue into the market. The yield on Alberta 10 year notes in May 2015 was 2.37 per cent, while today it is 2.38 per cent. This fiscal year, we expect to spend 2.4 per cent of our budget revenue on debt servicing. By comparison, British Columbia will spend 5.5 per cent and Ontario is expecting to spend nine per cent of its budget revenue on interest charges.”