A credit rating agency has upgraded its scores for the Government of Alberta, September 15, 2023. (Photo: Pattison Media)

By David Opinko

Alberta Government’s credit rating upgraded to AA

Sep 15, 2023 | 9:22 AM

EDMONTON, AB – A credit rating agency is showing confidence in Alberta’s economy and the management of its provincial government.

On Thursday, September 14, 2023, DBRS Morningstar upgraded Alberta’s issuer rating and long-term debt rating to AA, increasing from AA (low).

“The first quarter results indicate that fiscal and debt metrics are consistent with the targets described above and support the improved credit ratings,” reads a statement from DBRS Morningstar. “Although Alberta faces continued economic volatility, DBRS Morningstar has increased confidence that the Province’s fiscal performance can be maintained in the coming years, supported by the new fiscal framework.”

In the province’s first quarter update, it forecasted a budget surplus of $2.4 billion in 2023-24, to be followed by surpluses of $2 billion in 2024-25 and $1.4 billion in 2025-26.

The growth in real GDP in Alberta was 5.1 per cent in 2022, which was among the fastest in the country. While that is expected to fall to three per cent in 2023, the agency remains positive.

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“Based on the current private sector consensus, this appears somewhat optimistic as recent forecasts have been revised downward in response to persistently high inflation, rising interest rates, and slowing global growth,” said DBRS Morningstar.

The agency added that Alberta’s debt-to-GDP ratio is expected to remain stable at 18.1 per cent in 2023-24, a sharp improvement from the COVID-impacted 2020-21 fiscal year of 34.6 per cent.

Alberta Finance Minister Nate Horner said he is pleased to see the decision from DBRS Morningstar.

“Alberta’s economy continues to exceed expectations. Our first-quarter fiscal update forecasts a $94-million boost in our projected surplus for 2023-24. Also, current consensus show that the province will be leading the country in economic growth this year,” said Horner.

The minister added, “The province’s improved fiscal and economic progress has also been recognized by other credit rating agencies. Since the beginning of 2023, Moody’s Investors Service upgraded its credit rating for Alberta and Fitch Ratings Inc. has upgraded its outlook for Alberta’s rating.”

Horner said he is aware that global economic challenges such as high inflation and volatile energy prices will continue to impact Alberta’s economic growth. However, he said Alberta’s future is secured as the government has committed to increasing savings and reducing debt.

The full credit upgrade report can be found on DBRS Morningstar’s website.

READ MORE: Alberta forecasts $2.4 billion surplus to end 2023-24

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