Provincial Debt
Alberta's commitment to fiscal responsibility
As announced in Budget 2009, the government plans to directly borrow $3.3 billion over three years to support capital spending. Borrowing for capital purposes retains a higher balance in the Sustainability Fund, thus enhancing fiscal flexibility over the medium term. The borrowing commenced in 2009-10 with almost $1.5 billion raised. In 2010-11 and 2011-12, the remaining $1.1 billion and $737 milion, respectively, is planned to be borrowed to complete the $3.3 capital borrowing plan. This money will be raised by borrowing in the capital markets. Alberta’s Triple A credit rating remains solid as it continues as the only province in Canada with total financial assets that exceeds total liabilities.
Effective April 1, 2011, the Government of Alberta will begin to borrow directly from financial markets and then on-lend the proceeds to the Alberta Treasury Branches and the Alberta Capital Finance Authority, as has been the practice with the Alberta Financial Services Corporation. This will lower borrowing costs and provide benefits in overall management of debt issuance by Alberta.
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 are only used to repay the remaining accumulated debt as it matures. Over the last five years, over $2.6 billion of those assets were used to repay the maturing accumulated debt as it came due. The remaining accumulated debt is forecast at $828 million at March 31, 2011. From its peak in 1993-94, the government has eliminated $23 billion of accumulated debt.
The money in the Debt Retirement Account is 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.
Further details on Alberta’s debt and other fiscal information are contained in Budget 2011 and in the 2010-11 Third Quarter Fiscal Update.
See also: Debt Management Information (updated February 24, 2011).
