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TORONTO, April 25 (Reuters) - Moody’s Investors Service stripped Alberta of its Aaa credit rating on Monday, becoming the latest ratings agency to downgrade the Canadian province after the oil price shock pushed its finances deep into the red.
Citing its worsening fiscal position and resulting rapid rise in debt, Moody’s downgraded the province’s long-term rating to Aa1 from Aaa and maintained a negative outlook.
The downgrade “reflects the province’s growing and unconstrained debt burden, extended timeframe back to balance, weakened liquidity, and risks surrounding the success of the province’s medium-term fiscal plan,” Moody’s Assistant Vice President Adam Hardi said in a statement.
Earlier this month, Dominion Bond Rating Service also downgraded the province after the provincial government forecast a budget deficit of C$10.4 billion ($8.21 billion) this fiscal year.
Standard & Poor’s stripped Alberta of its AAA credit rating in December.
Alberta’s left-leaning NDP government expects the once-booming province to be C$57.6 billion in debt by 2019, while Finance Minister Joe Ceci said Alberta could run deficits until 2024.
Ceci described the latest downgrade as a “disappointment” and reiterated the government’s commitment to maintaining funding for public services and infrastructure spending in a bid to spur growth.
The province is home to Canada’s vast oil sands and is the No. 1 exporter of crude to the United States but the government expects oil and gas revenues this year to be almost 90 percent lower than 2014.
Earlier this month the Canadian Association of Petroleum Producers said capital investment in the industry has dropped C$50 billion in two years and more than 100,000 oil and gas workers have been laid off.
$1 = 1.2673 Canadian dollars Reporting by Fergal Smith and Jeffrey Hodgson; Editing by Tom Brown