Skip to main content

Ms. Notley added that Alberta’s debt is “absolutely manageable.”

JASON FRANSON/THE CANADIAN PRESS

Alberta Premier Rachel Notley defended her NDP government's spending plans on Friday by saying anyone who claims the province can balance its budget in two or three years is talking about thousands of layoffs.

Notley was speaking at an Edmonton school a day after her NDP government delivered a budget that forecasts a $10.3-billion deficit, which puts Alberta on track to rack up $45 billion in debt by the end of the 2017-18 fiscal year.

Notley said the province has a plan to return to balanced budgets and the government should be able to quickly make progress paying down the debt.

Story continues below advertisement

"Anyone who says you can get to balance in two years or three years is talking about laying off thousands and thousands of teachers, not moving ahead with school construction, cancelling hospital projects, laying off nurses — that's the only way you balance the budget in the next couple of years," she said.

"We are definitely moving towards balance. We have a plan to get to balance."

Notley said she knows Albertans are worried about the growing size of the debt, but added it is "absolutely manageable." She noted that there's a huge backlog of unfunded infrastructure as well.

"When you don't build schools and hospitals to keep up with your population growth, you are creating a deficit, you are creating debt. And, quite frankly, getting out of that deficit and debt is more expensive than paying off debt," the premier said.

Opposition leaders have called for the government to curb spending and have argued that crushing future debt loads will threaten front-line services.

The province anticipates its debt will hit $71 billion by 2020. Servicing costs will be $1.4 billion this year and $2.3 billion by the end of the decade.

Analysts with credit rating agency DBRS warned in a preliminary assessment Friday that while the debt burden is still low and the economy is expected to recover, it may not be enough to protect Alberta's AA rating and stable trend.

Story continues below advertisement

"In the absence of meaningful action to address the budget deficit and to slow down debt growth, Alberta's debt may exceed levels acceptable for the current ratings," DBRS said.

The budget projects a gradual reduction in the deficit to $9.7 billion in 2018-19 and $7.2 billion by 2020.

Last April, DBRS downgraded Alberta's top-grade rating, as did Moody's Investor Service, due to concerns about debt in the 2016 budget.

The following month, Standard & Poor's changed the province's rating from AA-plus to AA. It had already taken away Alberta's AAA rating in December 2015.

Friday's assessment from DBRS said the medium-term outlook for Alberta is the same as last year, but "key financial risk metrics have deteriorated relative to DBRS's expectations at the time of its last review."

It said debt is projected to approach 18.4 per cent of GDP in 2017-18 and almost 24 per cent by 2019-20.

Story continues below advertisement

"This erodes Alberta's low-debt advantage relative to provincial peers."

Report an error
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

If your comment doesn't appear immediately it has been sent to a member of our moderation team for review

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.