Alberta bond rate set at 3.3%
The interest rate on Alberta Capital Bonds, to be released Feb. 16, will be 3.3 per cent, the province announced Friday.
"Alberta Capital Bonds are a safe, competitive option for Albertans looking to invest in their province," said Finance Minister Ted Morton, in a release.
The province is hoping to sell $100 million worth of the bonds, with the money raised committed to build seniors' housing. The bonds are only available to Alberta residents.
February's rate for a Canada Savings Bond is .40 per cent. They can be redeemed at any time, while the Alberta bond is for a fixed, five-year term.
The Canadian Taxpayers' Federation said the province should have no trouble selling the issue.
"I think it will entice enough people to lend them up to the $100 million mark," said Scott Hennig, executive director.
But the watchdog group is hoping Albertans ignore the bonds for political reasons.
"We're encouraging people to boycott it," Hennig said, "and send the government a message that they, "A," shouldn't be borrowing, and, "B," shouldn't be borrowing at an extremely expensive rate."
Albertans should consider the impact of the issue on the provincial budget, he said. "Since it's only Albertans who can buy these bonds and it's only going to be Albertans who are going to be able to pay back the interest on these bonds, it's really like taking some money out of your left pocket and moving it to your right, but sliding a bit to a few bankers to skim off on the way through."
The bonds will be available until March 1 unless the $100 million target is reached sooner.