Finance Minister Joe Ceci says it’s the prudent route to go, given Alberta is caught in the vise of a growing population and a declining economy. “The focus the government has brought to this project shows they are serious about meeting the cancer care needs of Albertans, not only today but well into the future”, said Myka Osinchuk, CEO of the Alberta Cancer Foundation.
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Notley will be in Calgary to discuss construction of a new cancer centre. “It is not the role of the government to drive into the ditch to try and find a different path forward”.
The government intends to keep hiring to a minimum, but doesn’t plan to drastically reduce service levels in key areas such as health and education.
“Consequently, we see a few risk that oil prices may remain low for longer than Alberta now assumes, leading to a negative impact on budgeted fiscal outcomes over the next 2-3 years”, Moody’s said.
Jean and other opposition leaders have criticized Notley for borrowing not just for capital projects but also, starting next year, to pay for day-to-day programs and salaries.
Despite the NDP government’s plans to move away from relying on oil revenue, oil still plays a big part in its first budget.
That stark reality was highlighted by former Bank of Canada Governor David Dodge, who was hired by Rachel Notley’s government in June to help with a multi-year infrastructure plan to create employment and boost the economy to offset weak energy investment due to low oil prices.
Total debt is expected to reach more than $47 billion by decade’s end.
In recent years, Progressive Conservative governments drew down on the province’s multibillion-dollar contingency fund to cover off deficits and avoid borrowing for operating expenses.
Notley noted the government will pass a bill this session to head off downgrades by limiting debt to 15 per cent of the province’s nominal gross domestic product. The government says it will balance the budget in the 2019-20 fiscal year.
Moody’s statement said it expects Alberta’s debt burden to increase to around 60 per cent of revenues by 2016-17, from 30 per cent as of March 31, 2015, rising to around 80 per cent by 2017-18.
Sherry Cooper, chief economist with Dominion Lending Centers however notes there are a few unknowns including the price of oil which the government forecasts will recover to $68/barrel.
“We are in an exceptionally strong (borrowing) situation”, said Notley.
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Despite concerns about the massive deficit and debt projections in the new provincial budget, one of the country’s largest mortgage lenders is giving the Notely government’s financial plan a B+ grade.
