Alberta’s Aaa credit rating and stable outlook are based on strong fiscal fundamentals generating surpluses, a very low debt burden and a wealthy economy says Moody’s Investors Service says in its annual report on the province.

“The Aaa rating reflects the progress achieved under the province’s debt reduction program and the continuation of prudent fiscal management, especially in budgeting for volatile oil and gas revenues,” says vice president and senior analyst David Rubinoff, who follows Alberta from Moody’s Toronto office.

“Alberta continues to post strong financial results as non-renewable resource revenues continue to outperform budgetary estimates,” notes Rubinoff. It reports that in 2003-04, the province’s revenues were $4.0 billion, which was 18.1% higher than budgeted, due, primarily, to stronger oil and gas revenues. And, it says, the 2004-05 budget forecasts revenues in excess of expenses by $303 million. “However, commodity prices have been stronger than originally anticipated, leading to a revision of the revenue forecast. This prompted the government to announce an aggressive debt reduction target for the year,” it says.

Alberta’s debt burden remains the lowest of all the Canadian provinces, Moody’s says; noting that net direct and guaranteed debt as a percentage of GDP declined to 4.9% in 2003-04, from 6.0% in 2002-03.

“The province’s credit quality is also supported by a wealthy resource based economy, buoyed by strong levels of oil and natural gas production,” says Rubinoff. Real disposable incomes in Alberta are the highest of the Canadian provinces, exceeding the national average by 15%.