A debt-free Alberta could soon be borrowing billions to pay for infrastructure projects in order to create jobs in an economy that has been rocked in recent months, says Premier Ed Stelmach.
Stelmach said the government should look into taking advantage of low interest rates by borrowing $6 billion to help the province catch up with its infrastructure projects.
He said it’s an ideal time to do it when the province has a triple-A credit rating — a rating better than the federal government’s.
“Why wouldn’t we do it — it’s a good business decision,” said Stelmach, after being questioned by Alberta Liberal finance critic Dave Taylor during question period yesterday.
“This is like putting money in between the mattresses — we’ll draw on it when our revenues drop and that’s very good planning.”
Quipped?Taylor: “He’s talking about using somebody else’s money from somebody else’s mattress — that would be the taxpayers of Alberta who are going to have to pay this money back with interest.”
The talk of borrowing billions came one day after the premier said on a Sunday morning radio show that his provincial government must take advantage of the 0.5 per cent Canadian bank rate.
“If we could borrow money at one, one and a half per cent, it makes good sense because you’re getting a third of the saving on the infrastructure,” Stelmach told the Making Money radio show on CFCW.
Scott Hennig, Alberta director of the Canadian Taxpayers Federation, called Stelmach’s idea “terrible.”
“Debt costs money and debt isn’t free,” he said,
“We’re not borrowing this money for free and government never pays off debt as quickly as they run it up … Didn’t we learn this in the 1980s and 1990s when governments were being pounded with debt repayment costs?”
Alberta was officially declared debt-free in 2004 after then-premier Ralph Klein wiped a $23-billion provincial debt.