Credit Rating: Statement from Minister Joe Ceci

President of Treasury Board and Minister of Finance Joe Ceci issued the following statement regarding one agency’s decision to revise Alberta’s credit rating:

“Our government had a choice. Had we made deep cuts that might have satisfied some bond raters, it would have resulted in a much deeper and longer recession. We take a longer-term view of Alberta’s economy. That’s why our measures are aimed at supporting growth, creating jobs and protecting Alberta’s families.

“It’s starting to pay off. After emerging from one of the worst recessions in the province’s history, Alberta’s economy is poised to grow by 2.6 per cent this year, the highest rate in the country.

“We will not raise taxes or make reckless spending cuts in the billions of dollars when our economy is just beginning to recover. Now is not the time to reverse course.

“Employment is up by approximately 40,000 jobs since the lowest point last July, exports and manufacturing have returned to growth and drilling activity has picked up by 100 per cent over last year. Alberta continues to attract the highest levels of private sector capital investment in Canada and Albertans’ average weekly earnings are higher than those in any other province.

“Budget 2017 maps out clearly how we will cut the deficit by nearly one-third in the next three years and we will continue on our path to balance by 2023-24. Alberta’s credit rating remains among the highest across the provinces and our balance sheet is the strongest in the country with the lowest debt-to-GDP ratio. We are the lowest-taxed jurisdiction in Canada, with no sales tax, no payroll tax and no health-care premiums. Alberta remains the best place to live, work and do business.

“I believe this rating change overlooks many of the positive things happening in our province right now. Only a week ago, Moody’s affirmed its existing credit rating for the province.

“Credit-rating agencies rate risk and don’t prioritize a government’s economic recovery or growth strategy.”

What others are saying about Alberta’s actions:

TD Economics, Provincial Economic Forecast, March 27, 2017:

“The recently tabled fiscal year 2017-18 Budget was stimulative in nature, with the government continuing its commitment to investing in health care, education and social services. As such, Alberta is expected to move from the worst performing provincial economy in 2016, to the best in 2017 and 2018, with economic activity expanding by more than 2 per cent.”

ATB Financial’s Alberta Economic Outlook, May 2017:

“As summer approaches, it is clear that Alberta’s economy has turned a corner on the recession that has plagued the province for the last two years. Most economic indicators, including retail activity, housing prices, and the labour market are showing stability and gradual improvements.”

Conference Board of Canada, Metropolitan Outlook 1: Economic Insights into 13 Canadian Metropolitan Economics, Spring 2017:

“After two tough years, the bleeding in Alberta’s oil and gas industry is finally being staunched and the province’s economy is on the road to recovery with economic growth forecast to reach 2.8 per cent this year—the fastest pace among the provinces—and a further 1.9 per cent in 2018.”

“Calgary’s economy is expected to grow this year for the first time in three years, with output rising by 2.3 per cent…Employment growth is forecast to reach 8,800 jobs in 2017 and an additional 10,100 jobs in 2018.”

“Edmonton’s economy is expected to expand by 2.4 per cent in 2017 and by 2.2 per cent in 2018 as higher oil prices pull the metro area out of recession.”

Business Development Bank Chief Economist Pierre Cleroux pointed to the approval of two pipelines and rebuilding efforts in Fort McMurray that are helping to bolster the economy, saying: “Alberta is going to have better growth than Saskatchewan or Newfoundland. We are seeing more investment right now in Alberta.”
(Metro Edmonton, “Alberta economy poised for quick turnaround: report,” April 18, 2017)

Alberta is in recovery:

  • Full-time employment rose for the third straight month, reaching the highest levels in a year.
  • Alberta led the country in private sector capital investment last year and is on track to lead again.
  • The number of motor vehicles sold in Alberta increased 15.1 per cent between March 2016 and March 2017 to 22,546.
  • Alberta operators drilled 1,199 wells during the first three months of 2017 compared with 519 a year ago, a 131 per cent increase in activity, according to industry figures.
  • Exports are up 68 per cent over last year and non-energy exports reached the highest level since 2008.
  • Wholesale trade rose for the sixth month in a row and has reached the highest level since September 2015.
  • Manufacturing was up in March, reaching $5.8 billion.
  • Housing starts in the first four months of this year are up 15 per cent over last year.
  • Canadian Federation of Independent Businesses is reporting that small business confidence is up, reaching the highest levels since December 2014.
  • 2016 net cash income on farms was up eight per cent over the previous year.