Ratings agency Fitch has downgraded Alberta’s credit status, citing the provincial government’s soaring borrowing in response to the economic impacts of the COVID-19 pandemic and oil slump.
In a release Tuesday, it said Alberta’s expected debt level relative to GDP is not incompatible with the previous AA rating.
“As the province has neither formally detailed the extent of its current fiscal challenges nor provided firm details on a path toward an eventual recovery, the negative outlook reflects the risk that stressors identified in Fitch’s rating case crystalize, leading to further deterioration in credit quality,” Fitch said in lowering the province’s rating to AA-.
Its risk assessment for the province remains at ‘high midrange.’
The Alberta office of the Canadian Taxpayers Federation said the downgrade is another signal the UCP government needs to rein in spending.
“It was important for the government to address its multi-billion-dollar spending problem before COVID-19 hit, and now it’s even more crucial,” Franco Terrazzano, CTF Alberta director, said in a statement.