In November, the provincial government updated their Term Debt Issues document, which lists all the term debt they still have outstanding.
I thought I’d summarize the new debt taken out during 2022.
|# of debts||Total debt|
The earliest any of these 4 debts matures is the one taken out in June, and it matures in 2033. The first debt taken out in January is set to mature in late 2038, and the other two mature in about 30 years: June 2052.
Missing from the report is the purpose of the debt. Prior versions had the purpose listed as “government” or “on-lending”; although there was one from 2010 that was labelled “TPP liabilities”.
The interest rates on these 3 debts range from 2.82% to 4.15%. However, the effective cost of debt (or the interest rate after tax deductions) ranges from 2.82% to 4.68%.
This new $1.986 billion brings the total term debt traded by the provincial government since the UCP were elected to $40.46 billion, spread out over 85 transactions.
The new debt borrowed during 2022 has pushed the total amount of term debt owned by the Alberta government to just shy of $100 billion, to $96.99 billion. More than two-fifths of that total debt (41.18%) has been issued since the UCP were elected nearly 4 years ago.
Even though the government owes less than $100 billion at the moment, there was a point during the UCP administration when Alberta’s debt was above $100 billion. However, several terms debts issued under the PCs have since matured, as well as one of the NDP’s debts, which has brought down the overall debt still owed.
A little less than half of the still outstanding debt (43.4%) was issued during the NDP administration. The remaining 14.9% or so was issued under the PC government, dating back to 2003. That means that 85% of the debt that Alberta currently owes was incurred under the NDP and UCP.
Keep in mind, however, that it took the NDP 4 years to rack up the $42.1 billion in debt that’s still owing. The UCP have accumulated over $40 billion in 3.5 years. That gives the NDP an average of $10.52 billion a year, and the UCP an average of $11.56 billion a year.
At this rate, the UCP will have borrowed a total of $46.24 billion during their 4-year term, which will be more than the $42.1 billion of the still outstanding debt that was borrowed by the NDP during their 4-year term.
By the 2023 election, provincial debt could total as much as $102.63 billion, and the UCP portion would make up 39.42% of it, assuming they keep borrowing at this rate. That’s including subtracting the 8 debts that matures before then.
Now, that being said, the UCP government has borrowed only 4 term debts during 2022. During 2021, they took out 20, at a combined value of $9.31 billion. So, it seems to me that their borrowing had slowed last year.
Either way, here’s how the debts look like broken down by month during the UCP’s term:
And by budget year.
Obviously, the pandemic had a lot to do with this. Their 4 highest months were during the first 5 months of the pandemic, totalling $17.4 billion.
The next largest month, was 6 months before the pandemic, however: September 2019 saw the UCP issuing $3 billion in term debts. Two months later, they issued $2.25 billion, making November 2019 the 7th highest month.
In fact, before the pandemic, the UCP had already borrowed nearly $7 billion in term debts. So, for every $6 in term debt the UCP has issued since taking power, $1 of it was issued before the pandemic.