January 20, 2016

NDP Finance Minister “pleased” as Moody’s shifts Alberta’s credit outlook from stable to negative

Sheila Gunn ReidRebel Commentator

Moody's just changed Alberta's credit outlook from stable to negative.

A lot has happened to Alberta's credit forecast since the NDP dropped their budget at the end of October 2015.

Immediately after the NDP's catastrophic tax and spend budget came out October, Moody's declared Alberta's budget was credit negative. That was the budget that would spell out the largest accumulation of debt in Alberta's history, plunging us $47 billion in the hole by the end of the decade. Moody's was trying to warn the NDP about the deficit spending road it was going down.

Moody's said, "the lack of significant expenditure controls will maintain the province´s structural imbalances in the near-term and will result in a deterioration of provincial debt and liquidity metrics over the next few years, which is credit negative."

Yet the NDP refused to listen.

Then, just before Christmas, the bond rating agency, Standard and Poor's downgraded Alberta's credit from AAA to AA. S&P, in a news release blamed "projected weak budgetary performances in the next two years; and moderate, but rapidly rising, tax-supported debt burden."

Yet the NDP refused to listen.

And now Moody's, acting on their prior warning about the Alberta budget, has now downgraded Alberta's credit outlook from stable to negative. In their press release, Moody's said, "without corrective fiscal action, this will lead to higher than planned fiscal deficits and lower liquidity than forecasted in the 2015/16 provincial budget, resulting in more rapid and higher debt accumulation across the medium-term."

Yet social worker turned Finance Minister, Joe Ceci, thinks that a credit downgrade is some sort of compliment, saying, "we are pleased that Moody's has reaffirmed our triple A credit rating" and "the rating agency confirmed the province's credit strengths and low debt servicing costs".

I wonder how pleased Joe Ceci will be if we ever become insolvent. At this rate, he'd be euphoric.


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commented 2016-01-20 18:54:16 -0500
Lefty’s are like children, they don’t care about the markets or ratings or debts. They think ratings agencies are just stodgy “adults” getting in the way of their fun!!
commented 2016-01-20 17:19:33 -0500

Alberta has been running consistent operational deficits, of varying sizes, for about eight years. Though these deficits are getting larger and larger, they have always been there. As for the so called “contingency fund” it’s an accounting trick. All that means is that if you have a short fall (a deficit) you borrow from this fund, which is not a rainy day pot of money on a shelf. In fact, it’s borrowed funds, which are added to the fund as needed, then used to off-set the deficit. The contingency fund has been tapped into about five times, to varying degrees. When the fund was declared “exhausted” that didn’t mean there was no more money in the pot. It means that the amount that is supposed to be funded (in the pot) isn’t sufficient enough to cover the short fall. So, the borrowing starts.

If you’re thinking of the occasional small surplus, that’s another accounting trick. Surpluses (and deficits) can be planned and created at will, by delaying spending to future periods, or moving it onto a previous period, by adding it into an existing budget.

If you think that government’s follow GAAP, you’re very mistaken. In fact, there is no requirement for any government to follow GAAP. Or, if they do, they apply “Big GAAP”, which allows all kinds of accounting voo-doo.
commented 2016-01-20 17:17:14 -0500
@ James Barnes – Excuse me, James, but it is not nice to insult door knobs like that. At least the door knob is good at what it does. :-)
commented 2016-01-20 16:28:26 -0500
Negative. The only word Marxist understand, that is why he is smiling.

Smile though your heart is weeping’ and slither back in to your nests.
commented 2016-01-20 16:15:58 -0500
sadly we allowed our education system to be overrun with communists so anyone younger than 45 believes that capitalism is bad . I was lucky to be born and raised in northern alberta where the good that comes from capitalism and how a community governed itself not some elitist jackass from the city. so many of that generation 25 to 35 did not learn that
commented 2016-01-20 16:08:08 -0500
Doorknobs are outlawed in BC!
commented 2016-01-20 15:56:53 -0500
Scott Allen – don’t expect the current crop of politicians, that has been drawn from the shallow end of the gene pool, to do anything that should be done. They don’t know what to do other than lie and spend our money on themselves.
commented 2016-01-20 15:21:28 -0500
watched this on youtube arguing with a leftie about spending your way out of debt. had the nerve to say capitalism works on paper but not in real life. these are the idiots we have against us. alberta should have diversified their economy? I cant get any of them to offer the magic solutions as to what else we were supposed to do here. but the government should have diversified the economy. right because government can do that
commented 2016-01-20 13:52:52 -0500
Dieter Clunth where do you get Alberta being insolvent for a decade? That is nonsense.
commented 2016-01-20 13:36:13 -0500
Alberta has been insolvent for almost a decade, thanks to endless deficits. As for Ceci, he really doesn’t care because Ottawa is the guarantor of provincial debts. Wynne in Ontario has no problem racking up the debts – why should Alberta worry about it?

This is the pattern of behavior that will be played for the next few years. In the end, the Bank of Canada will just introduce a QE policy and buy up all the debt. Where will be Canadian Dollar be in the midst of all this? I don’t care – I have U$D.

Canada will soon be ready for fleecing. Yeee-HA!
commented 2016-01-20 13:25:58 -0500
Dumb as Dumb is. When my brother retired in 2014 I told him to sell his house now he could have got $400,000 to $500,000 for his place now he would be lucky to get $225.000 for his house now he voted NDP tuff luck
commented 2016-01-20 13:23:04 -0500
Well it seems to be a toss up who is more ignorant about economics. Joe Who or the federal finance minister. I think it’s neck and neck right now! Wow!
commented 2016-01-20 13:15:33 -0500
How did they ever get a stable rating under the NDP? Now the idiots who voted NDP with get a dose of reality!
commented 2016-01-20 13:08:04 -0500
lol he just again removed the doubt. What a bunch of incompetent fools.
commented 2016-01-20 13:07:52 -0500
please stop lending the NDP money.
commented 2016-01-20 13:03:17 -0500
Finance Minister, Joe Ceci is experiencing what is called “cognitive dissonance” – a detachment from reality as it is more important for Ceci to see only what he believes and not what is really going on.

Cognitive dissonance leads to emotional outbursts and anger. As reality drifts further and further away from what Ceci expects to occur, expect Ceci to say and do more awkward stuff.

Watching this form of destructive humor is often referred to as macabre.

Danse macabre anyone?
commented 2016-01-20 12:57:17 -0500
bahahaha! there you have it folks! bad credit is now good credit.
excuse me while I go tell that to my bank…