Provincial Debt
Alberta's commitment to fiscal responsibility
Alberta’s commitment to fiscal responsibility continues as the cornerstone of our province’s strength. Facing its first recession since 1986, the First Quarter Fiscal Update projects a deficit of $6.877 billion for 2009-10, up $2.163 billion from Budget 2009. In the previous year, Alberta recorded a deficit of $852 million, the first deficit after 14 consecutive balanced budgets. Actions taken over the last 16 years mean the government has no accumulated debt and $18.3 billion in short term savings set aside. $1.1 billion per year over the next three years will be directly borrowed to finance capital spending. Alberta’s Triple A credit rating has been recently reconfirmed as it continues as the only province in Canada with total financial assets that exceeds total liabilities.
In March 2005, the government established the $3.5 billion Debt Retirement Account, equal to the amount of accumulated debt at that time. The assets in this account will only be used to repay the remaining accumulated debt as it matures. Over the last four years, $2.315 billion of those assets were used to repay the maturing debt as it came due. The remaining accumulated debt is $1.160 billion at March 31, 2009. From its peak in 1993-94, the government has eliminated $23 billion of accumulated debt.
The money in the Debt Retirement Account has been invested in high quality government and corporate fixed income investments, with terms matching maturing debt issues.
On this page you will find links to information from the Treasury Management Division on how it manages the debt and works to keep interest cost, called debt servicing costs, low.
Alberta’s steady debt reduction plan has saved Alberta about $1.5 billion in annual debt servicing costs. That means millions of dollars every year that can be reinvested in priority areas important to Albertans, such as health, education, infrastructure, savings, and tax cuts.
Further details on Alberta’s debt and other fiscal information are contained in the 2009-10 First Quarter Fiscal Update and in Budget 2009.
See also: Debt Management Information (updated August 26, 2009).
