EDMONTON—Alberta’s credit rating has been downgraded by Standard & Poor’s from double-A-plus to double-A.
The company says the downgrade reflects what it calls “Alberta’s very weak budgetary performance and high, increasing debt burden.”
It also cites uncertainty about the province’s willingness to take measures to improve its budget shortfalls within the next two years.
Last month, Moody’s Investor Service and DBRS both downgraded Alberta’s credit rating due to concerns about the province’s debt after the NDP government introduced its budget.
Alberta’s budget includes a $10.4-billion deficit this year.
“The one-notch downgrade reflects the impact of depressed oil prices on Alberta’s important resource revenues, and the province’s fiscal response that, so far, has not meaningfully counterbalanced this external shock,” Standard & Poor’s said in a report released Thursday.
“Based on the province’s latest budget released last month, we now expect the depth and duration of the province’s after-capital deficits and related run-up in tax-support debt to be much greater than what we foresaw in our last review in December 2015, leading us to conclude that Alberta’s credit profile is no longer consistent with the ‘AA+’ rating.”
In December, Standard & Poor’s downgraded Alberta’s rating to double-A-plus from triple-A.