Alberta's Choice

Alberta may be in line for yet another credit downgrade from its current A+ rating after DBRS reviewed the NDP's fiscal update.  Finance Minister Joe Ceci released a statement on Wednesday accompanying the update and reiterated the government's commitment to ensuring services remain available for Albertans.  Interestingly enough, the UCP caucus is also facing a deficit and is looking to borrow from MLA allowances and/or cut caucus staff.  Presumably the 38 staffers are excited to see which of them will remain employed in the disastrous economic climate their employer assures them exists.

While the NDP are still holding onto hope that oil prices will rebound it's looking less and less likely to happen before 2019 (note: the links are not Alberta specific but global forecasts).  The NDP is in a difficult position because if they raise taxes, they will be hounded by the opposition and the public for not cutting jobs and services.  By maintaining the status quo they will be hounded by opposition and the public for not cutting jobs and services.  There's always option number three: they could cut services and jobs and look like hypocrites to their supporters.  Their only hope was a resource royalty miracle.

But don't think for a second the UCP isn't in the same boat.  They need resource revenue as well because even though we can't pay for the services we currently have, they want to cut taxes further.  They, however, are not afraid to cut services and jobs.  Their active supporters, a large number of whom are 55 and older, living in rural areas with few health services or urban areas without adequate space for placement in seniors' facilities and wait lists for surgeries, are cheering for it, actually.  Everyone knows the old saying "the less you pay, the better quality you receive"... or something like that.

The NDP desperately needed resource revenues to return so they could be in a strong position to maintain government in 2019.  If they won't raise taxes to support the spending or cut the spending, they will go further into debt at what looks to be a higher level of interest if Alberta's credit rating drops again.  The credit rating agencies have said there are only two options to keep the credit rating we have and maintaining the status quo is not one of them.  While the Wildrose/UCP continues to look less like the financial stewards they claimed to be, other parties are being given the opportunity to offer a real choice in 2019.