Provincial Debt
Alberta's commitment to fiscal responsibility
Budget 2009 set out a plan to directly borrow $3.3 billion over three years to support capital spending. The borrowing commenced in 2009-10 with almost $1.5 billion raised. During fiscal years 2010-11 and 2011-12, the economy strengthened and the government’s fiscal position improved, so borrowing of the final $1.8 billion was put on hold.
Alberta’s Triple A credit rating remains solid as it continues as the only province in Canada with total financial assets that exceed total liabilities.
Effective April 1, 2011, the Government of Alberta began to borrow directly from financial markets and then 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 practice, called on-lending, results in lower borrowing costs for provincial corporations, who pay the province back with interest. The Alberta government expects to borrow approximately $3.5 billion for the purpose of on-lending to provincial corporations in 2012-13. This money will be raised by borrowing in the capital markets.
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 $3 billion of those assets were used to repay the maturing accumulated debt as it came due. The remaining accumulated debt is forecast at $488 million at March 31, 2012. 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 2012 and in the 2011-12 Third Quarter Fiscal Update.
See also: Debt Management Information (updated February 24, 2011).
