Clark releases debt plan, says further credit downgrades will cost Albertans $660 million more
Posted on February 25, 2016 by Meagan Wade
CALGARY, AB - February 25, 2016 - Alberta Party Caucus Leader Greg Clark has released a debt affordability analysis and recommendations for the Government of Alberta’s fiscal sustainability.
“Albertans expect more from this government,” said Clark. “If the NDs are going to be borrowing tens of billions of dollars, they need to do a deeper analysis of the costs of borrowing and show Albertans a clear plan to pay it back.”
The Alberta Party Caucus debt plan recommends the following:
1. Always use the most conservative figure available for forecasting purposes
2. Eliminate borrowing for operational spending
3. Develop and implement a debt affordability analysis to be incorporated into the annual budget which includes a detailed analysis of different scenarios based on key metrics like debt to GDP, debt as a percentage of revenues and other measures
“The government should never borrow for operations,” said Clark. “If that means you need to make hard choices, then you need to make hard choices. Rather than borrow for operations the province needs to live within its means and control spending.”
Clark said there is a significant risk of further credit rating downgrades, which will increase Alberta’s debt servicing costs substantially.
“Our analysis shows Alberta’s debt servicing costs will increase by $660 million if we’re downgraded again,” said Clark. “Given the NDs lack of fiscal discipline another downgrade is likely.
“We need to see a clear plan from this government to stabilize Alberta’s finances and put us on a path to a balanced budget. The Alberta Party plan does that, and I encourage the NDs to accept all recommendations within this policy document.”
The Alberta Party Caucus debt analysis “Impact: How Government Decisions Affect Alberta’s Fiscal Sustainability” is available here.
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