We all know the crippling effects of debt, which is why we try our best to prudently manage our finances in both our personal and professional lives.
In Europe, the banks recently shut down, pensioners and public servants were locked out of their contracts and the Eurozone almost collapsed, after Greece refused to tackle its massive debt problem.
Here in Canada, Ontario was just declared to be the most indebted sub-sovereign borrower in the entire world after years of scandal and mismanagement. The province is now more reliant than ever on western equalization dollars.
Could Alberta go this same way? The answer is yes — at least according to Moody’s Investors Service.
The international credit rating agency just placed Alberta on watch for a credit downgrade after the NDP government authorized $6 billion in new debt behind closed doors with no plan to pay it back and without the support of the legislature.
Another $6 billion would increase Alberta’s total debt by 50 per cent, and keep us on the pace set by the PC government to be over $30 billion in debt by 2019, with annual interest payments alone set to top $1 billion per year.
Moody’s already downgraded both Ontario and Manitoba’s credit rating this year. Now, the Alberta government has us on a collision course for a credit downgrade unless meaningful action is taken, but it has no strategy to stave off financial disaster.
There’s no clear fiscal picture on what all this new borrowing is for. There has been no clear communication from NDP Finance Minister Joe Ceci on our fiscal situation, inside the legislature or out of it.
The fact remains, however, that exploding debt financing costs will continue to soak up revenues and resources away from core government services like health care and education, and Albertans will continue to be asked to pay more and more to fund the Alberta government — the most expensive per capita government in Canada.
The NDP government is quite literally financing our future and risking the prosperity of future generations.
After years of unrelenting PC and NDP government borrowing, deficit budgets and debt financing, Alberta is on the verge of being the next Ontario — one of the world’s worst examples of financial mismanagement and incompetence.
A generation of hard work and sacrifice won us the proud title of being debt free, and other provinces looked at us with envy while their citizens came to take part in the Alberta Advantage.
Don MacIntyre, MLA