Credit rating agencies seeking more information on Alberta's financial plan
'They didn't share any disappointment or disagreement with our plan,' says Finance Minister Joe Ceci
Credit rating agencies are asking Alberta Finance Minister Joe Ceci for more information before they finalize their response to Alberta's latest budget.
Ceci was in Toronto Monday selling the province's fiscal plan to Standard & Poor's, DBRS Ltd. and Moody's Investors Service. All three agencies downgraded the province's credit rating last year.
Ceci said on a conference call with reporters that he was given no indication of whether Alberta's credit rating will be downgraded again this year.
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"There is additional work that all three of the credit agencies indicated that they were going to be taking over the next two weeks to five weeks to further assess their response," Ceci said.
"They didn't share any disappointment or disagreement with our plan," he added. "They were asking for further elaboration to understand the fundamentals that we've built our plan on."
Ceci said he talked about his plan to return to a balanced budget by cutting expenditure and keeping spending growth below population growth and inflation.
Ceci said Alberta has a strong credit rating and balance sheet compared to other Canadian provinces.
$71 billion in debt by 2020
Standard & Poor's has dropped the province's rating twice since 2015. The first downgrade in December 2015 removed the province's triple-A rating.
DBRS and Moody's downgraded Alberta's triple-A credit rating in early 2016.
DBRS dropped Alberta from triple-A to double-A the day after the government released the April 2016 provincial budget.
Moody's expressed concern with the "deep deficits and long return to balanced budgets forecasted by the province, and the resulting rapid and substantial rise of provincial debt levels."
A credit rating drop increases the cost of borrowing money.
The latest budget tabled by Ceci on March 16 projects the debt will soar to $45 billion this fiscal year.
That amount is forecast to hit $71.1 billion by 2019-20, with a debt-to-GDP ratio of 19.5 per cent. Debt servicing costs are estimated to reach $2.3 billion by then.
Ceci also met with investors from CIBC Asset Management, Manulife, Sun Life, TD Asset Management, and TD Securities on Monday.
He is scheduled to meet with Scotiabank and the Ontario Teachers' Pension Plan on Tuesday before returning to Alberta.