Research Update: Province of Alberta Long-Term Rating Affirmed At 'A+'; Outlook Remains Stable

We expect challenges facing Alberta's economically important oil sector to continue weighing on the Province of Alberta's revenues over the next two years. Absent a major fiscal policy response, we anticipate that slow organic revenue growth will result in the province running after-capital deficits well exceeding those of domestic and international peers through 2020. While fiscal deficits will continue to fuel significant debt growth, we expect Alberta's tax-supported debt burden to stay below that of its highly indebted eastern Canadian provincial peers in the medium-term. As a result, we are affirming our long-term issuer credit and senior unsecured debt ratings on Alberta at 'A+' and affirming our short-term rating at 'A-1+'. The stable outlook reflects our expectation that Alberta will

...+ We expect challenges facing Alberta's economically important oil sector to continue weighing on the Province of Alberta's revenues over the next two years. + Absent a major fiscal policy response, we anticipate that slow organic revenue growth will result in the province running after-capital deficits well exceeding those of domestic and international peers through 2020. + While fiscal deficits will continue to fuel significant debt growth, we expect Alberta's tax-supported debt burden to stay below that of its highly indebted eastern Canadian provincial peers in the medium-term. + As a result, we are affirming our long-term issuer credit and senior unsecured debt ratings on Alberta at 'A+' and affirming our short-term rating at 'A-1+'. + The stable outlook reflects our expectation that Alberta will run after-capital deficits of 18%-22% of total revenues in the next two years....

Research Update