ALBERTA RECEIVES SIXTH CREDIT DOWNGRADE UNDER UCP
EDMONTON - Alberta has received its sixth credit downgrade under the UCP government after S&P Global Ratings cut Alberta’s credit rating from A+ to A.
As part of their rationale for the rating decision, S&P notes that Alberta’s economy performed the worst in the country in 2020 and is expected to lag the national average growth rate in 2021. It continues that, “Improving oil prices notwithstanding, we believe that Alberta's fiscal recovery will still be incomplete by the end of the 2023-2024 fiscal year.”
“The UCP have completely mismanaged the pandemic and failed to protect public health or our economy,” said NDP Finance Critic Shannon Phillips. “But even before the pandemic, the UCP failed to create jobs or grow the economy while nearly doubling the deficit. Now they’ve made a bad situation worse with no plan for an economic recovery.”
The first credit downgrade under the UCP came in December 2019 from Moody’s Investors Service, following the introduction of the UCP’s first budget that increased Alberta’s deficit from $6.7 billion to $12.1 billion. The downgrade also came just months after the UCP began cutting the province’s corporate tax rate from 12 per cent to 8 per cent over the course of their term.
During the pandemic, the UCP have accelerated the corporate tax cut and lost $1.5 billion on Keystone XL after the project was halted by President Joe Biden.
According to recently released data from Statistics Canada, Alberta had the worst performing economy in the country in 2020, with an 8.2 per cent drop in gross domestic product, and currently has the second highest unemployment rate in the country. This comes after Alberta’s economy grew by just 0.1 per cent in 2019 and 50,000 full-time jobs were lost under the UCP before the pandemic hit the province.
“In the middle of an economic crisis, the UCP have doubled down on their failed strategy to hand billions of dollars over to already profitable corporations,” said Phillips. “Instead, we need to focus on supporting Albertans and small businesses to get through this pandemic, as well as a plan that takes aggressive steps to diversify our economy so we can build a stable and long-lasting recovery.”