05/26/2017 13:34 EDT | Updated 05/26/2017 14:00 EDT

Alberta sees another credit rating downgrade on rising debt levels

EDMONTON — Alberta's credit rating has once again been knocked down over concerns of rising debt levels and unbalanced budgets.

S&P Global Ratings says it has reduced the province's rating two notches from AA to A+ on its expectation of continued high deficits in the next two years as Alberta tries to stimulate the economy.

"Our assessment of the province's budgetary performance ... has significantly deteriorated and is materially weaker compared with that of both domestic and international peers," the agency said.

S&P criticized the province for not introducing any material measures of fiscal restraint in the spring budget, and instead waiting for oil prices to recover to bolster its finances.

Finance Minister Joe Ceci said that the NDP government made a choice to keep spending to foster growth, rather than to make budget cuts to please bond raters.

He said efforts are starting to pay off. Alberta's economy is expected to grow 2.6 per cent this year, the highest rate in Canada.

"Had we made deep cuts that might have satisfied some bond raters, it would have resulted in a much deeper and longer recession," said Ceci.

He also rejected S&P's suggestion that the province could raise taxes to improve its fiscal position.

"We will not raise taxes or make reckless spending cuts in the billions of dollars when our economy is just beginning to recover," said Ceci.  

Wildrose leader Brian Jean said it was the government's "reckless spending" that led to another downgrade and that will lead to higher debt-servicing costs.

"Today's credit downgrade is yet another example of how much damage the NDP is inflicting with its disastrous budgets and policies at a time we can least afford it," said Jean in a statement.

S&P expects Alberta to borrow more than $55 billion between fiscal 2018 and 2020, bringing total tax-supported debt to $94 billion by the end of fiscal 2020.