UCP govt borrowed nearly $1B in 2023

In September, 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 the first 3 quarters of 2023.

	# of debts	Total debt
January	1	$0.086 billion
September	2	$0.850 billion
Total	3	$0.936 billion

The earliest any of these 3 debts matures is one of those taken out in September, and it matures in 2033. The first debt taken out in January is set to mature in late 2038, and the other September debt matures in March 2039.

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 3.91% to 4.18%. However, the effective cost of debt (or the interest rate after tax deductions) ranges from 3.91% to 4.56%, up from the range of 2.82% to 4.68% we saw in 2022.

This new $936.4 million brings the total term debt traded by the provincial government since the UCP were elected to $41.397 billion, spread out over 88 transactions.

The new debt borrowed during 2023 has pushed the total amount of term debt owned by the Alberta government to just shy of $100 billion, to $97.9 billion. More than two-fifths of that total debt (42.29%) has been issued since the UCP were first elected over 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 (43.01%) was issued during the NDP administration. The remaining 14.8% 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.

The NDP took 4 years to rack up the $42.099 billion in debt that’s still owing. The UCP have accumulated $41.396 billion in 4.5 years. That gives the NDP an average of $10.524 billion a year, and the UCP an average of $9.199 billion a year.

Keep in mind, however, that the UCP borrowing activities have tapered off. They borrowed only 4 term debts during 2022, and they seem to be on track to finish 2023 with only 3.

During 2021, however, they took out 20, at a combined value of $9.31 billion.

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.