Last month, Travis Toews, president of the Alberta Treasury Board and the minister of finance, recommended to the lieutenant governor that he be authorized to do the following:
- Raise up to $21 billion through notes, bonds, debentures, or interest-bearing or non-interest-bearing treasury bills issued by the Crown, or any other securities under which the Crown is the debtor
- Approves the terms and conditions of any of that money
The lieutenant government approved the recommendation.
Last year, I broke a story about a similar approval for $1.25 billion. That borrowing was specifically for an oil refinery. This new borrowing is for an undetermined purpose.
In addition to the $1.25 billion that Toews was approved to borrow last year for the refinery, he was approved for up to $7 billion in November 2019 for securities of ATB Financial and Alberta Capital Finance Authority, which was changed to $9 billion last March. Last February, he filed for another approval—$2.8 billion for securities from Agriculture Financial Services Corporation.
Each of those three orders in council authorized by the Lieutenant Governor expressed an explicit purpose.
Last month’s announcement had no purpose listed. It’s just requesting the approval of $21 billion.
There are certainly plenty of places they could spend it.
Making up for the loss of hundreds of millions of dollars in corporate income tax revenue since the government cut the tax rate large businesses pay from 12% to 8%.
Or perhaps making up for the fact that oil and gas revenue makes up less than 5% of all government revenue or that transfer payments from Ottawa make up the second largest source of revenue for this government.
At this point, however, it’s anyone’s guess. Either way, it’s certainly going to push the $98.3 billion debt that they forecasted for this current year past the $100 billion mark over the next budget year.
