Province of Alberta

This report does not constitute a rating action. Overview Credit context and assumptions Base-case expectations A recovering economy boosted by higher-than-expected WTI prices, the government?s fiscal plan, and a supportive institutional framework underpin Alberta?s creditworthiness. Stronger-than-expected budgetary performances in fiscal 2021-2022 will likely lower borrowing requirements and improve liquidity metrics. The provincial economy will expand vigorously in 2021, owing to higher-than-expected WTI prices and rising vaccination rates. Operating and after-capital deficits will likely shrink with faster-than-budgeted natural resource revenues from higher-than-expected WTI prices. Alberta?s fiscal plan focuses on managing down expenditures as economic growth lifts revenues. Lower borrowing requirements will likely reduce new debt issuance and the tax-supported debt burden. The province?s supportive relationship with the federal government will remain

...S&P Global Ratings' long-term issuer credit rating on the Province of Alberta is `A'. Alberta has endured two powerful economic shocks in the past six years. The province entered the pandemic in a position of relative fiscal weakness because of the prolonged slump in oil prices that began in late 2014. From this starting point, steps taken to control the COVID-19 pandemic and to safeguard the health and safety of citizens trimmed revenues and drove up health care and education expenditures. Budgetary results deteriorated and the tax-supported debt burden rose to a greater extent than was the case for all other Canadian provinces. Thanks primarily to unexpectedly high oil prices, Alberta's economy will rebound very strongly and bring fiscal relief to the province. We expect the province's projected rebound in real GDP of close to 7% in 2021 will surpass the national average after lagging it 2020. S&P Global Economics' current baseline assumption is that Canada's real GDP will rebound 5.4%...

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