Saskatchewan credit rating downgraded for second time by Standard & Poor’s and all we hear are crickets!

Posted on June 22, 2017, 1:17 am
5 mins

PHOTOS: It’s quiet here on Crickets Avenue. Don’t expect a Wildrose or PC press release to come along any time soon. (Photo: Billy Hathorn, Wikimedia Commons) Below: Standard & Poor’s headquarters in New York City (Photo: Uncredited, Wikimedia Commons); Brad Wall, the real leader of Western Canada, or so they say. (Photo: Daniel Paquet, Wikimedia Commons).

Can you hear the crickets chirping?

Yesterday was the longest day of the year, and Standard & Poor’s chose the summer solstice to downgrade Saskatchewan’s credit rating from AA+ to AA.

It was the second time in the past 12 months Saskatchewan’s credit rating has been dropped by the famous New York credit rating agency, whose pronouncements are taken ever so seriously by conservative opposition parties here in Alberta.

But you could have waited all day and long after sunset – which took place at 10:07 p.m. here in the capital of Alberta, if you were wondering – to see a press release from either the Wildrose Party or the Progressive Conservative Party condemning Saskatchewan Premier Brad Wall and his conservative Saskatchewan Party government for this obvious failing.

Funny, that!

Because it’s certainly never taken this long for an angry press release to appear from the offices of either of Alberta’s two main conservative political parties when the same thing happened to Alberta’s New Democratic Party Government for the same reasons.

It turns out that increasing debt caused by keeping the lights on in resource dependent provinces in the face of low oil, natural gas and other resource prices has had pretty much the same effect in Saskatchewan governed by conservatives as it has had in Alberta governed by social democrats.

That said, a good economic case can be made that Alberta will be in far better shape as both provinces recover from the downturn because the NDP has not laid waste to health care, education and other public services, as the Saskatchewan Party is doing.

Perhaps that’s why the Canadian Federation of Independent Business May 2017 Business Barometer survey shows optimism in social democratic Alberta growing strongly to 62 per cent while it “took a nosedive” in free-market Saskatchewan to 49 per cent. Oddly, this story too was barely reported my media that normally slavishly follow CFIB pronouncements.

Regardless, when Standard & Poor’s downgraded Alberta’s credit rating for the second time, from AA to A+ last month, the Wildrose press release called it a “disastrous credit downgrade.”

“This is totally unacceptable,” wailed Wildrose Leader Brian Jean, who is already a candidate to lead the still-unbirthed United Conservative Party.

“Credit rating agencies don’t care what politicians say, they care what they do, and the NDP are doing nothing but dithering while Alberta’s deficit spirals out of control,” shrieked Wildrose Finance Critic Derek Fildebrandt, another UCP leadership candidate.

The Wildrose Party called on Premier Rachel Notley’s government to slash spending, as the Saskatchewan Party has been doing under Mr. Wall. Alert readers will recall that not so long ago Progressive Conservative Leader Jason Kenney, the original candidate to lead the UCP, hailed Premier Wall as “the real leader of Western Canada.”

The first time an S&P downgrade happened (to Alberta), the PC news release called it “a major blow to our economy.” (Economics hint: It wasn’t really, although it does increase borrowing rates somewhat.)

Postmedia’s newspapers devoted a mere 128 words to the Saskatchewan credit rating downgrade yesterday. However, in the foundering newspaper chain’s defence, they did shamefacedly retract their original headline, which read, “S&P upgrades Saskatchewan’s credit rating to AA.” Postmedia left in place the story’s original URL – which still contains the upgrade error.

So, just when will we be seeing the Wildrose and PC attacks on the Real Leader of Western Canada’s apparent mismanagement of the Saskatchewan economy?

Chirp-chirp! Chirp-chirp!

17 Comments to: Saskatchewan credit rating downgraded for second time by Standard & Poor’s and all we hear are crickets!

  1. Gary

    June 22nd, 2017

    Why would the Alberta opposition parties comment on the performance of the Saskatchewan government? Does anyone other than Mr. Climenhaga believe that should be the role of Alberta opposition parties?

    And even with the downgrade, Saskatchewan has the second best provincial credit rating.

    [In his haste to get this rant out, the author did not
    take the time to fact check. Alberta’s S&P credit rating is A+ not AA. And Alberta’s S&P credit rating has been downgraded three times since the NDP took office not two times.]

    Reply
    • David Climenhaga

      June 22nd, 2017

      As always, I am grateful to my readers for assisting with the editing of this blog. This has been corrected, as has been the error that would have been more suitable for a much sharper rejoinder – my mislabelling the summer solstice as an equinox. Embarrassing, but neither fatal to the point being made. The reason for these errors you got right. DJC

      Reply
      • Val

        June 22nd, 2017

        David, that’s news but pretty much irrelevant
        indeed, how that Saskatchewan credit rating will help to ease for us in Alberta to pay for this year INTEREST serving alone, which is $1250 per capita or $5000 each Alberta family of four?

        Reply
        • Expat Albertan

          June 22nd, 2017

          You live by the sword, you die by the sword. When things are good in Saskatchewan, the opposition in Alberta makes special note of it. That’s why.

          Reply
      • pogo

        June 22nd, 2017

        You know David, I am saddened that our opposition parties and the insolvent media that clears the air for them, have chosen to use Brad Wall as an example. If it were me I would have had them touting Duterte or Trump directly. I mean Brad Wall? What a pathetic simulacrum of a travesty he and his polices construct when compared to the real soul of the modern conservative. Your apology on a technicality is gracious in the face of approbrium! No swears!

        Reply
    • Sam Gunsch

      June 23rd, 2017

      Gary… your favoured RW opposition’s hypocrisies are being mocked in lots of places except by the RW AB pravda-like newspaper columns. Check-out the mocking below by an economist whose pretty big on markets first/best stuff. If you’re so sure Climenhaga’s not on point, why not go try your out your stuff on Leach? And please let us know how that goes.
      ==================

      From Twitter: Andrew Leach added,

      The Notley virus is spreading. Or, maybe commodity prices matter to long term fiscal sustainability of resource economies? Nah.

      Geoffrey Morgan @geoffreymorgan
      S&P just downgraded Saskatchewan from AA+ to AA on lower commodity prices and “elevated capital spending.”
      3 replies 31 retweets 68 likes

      Reply
  2. Farmer B

    June 22nd, 2017

    I certainly agre with you that when this happens in Alberta it is news, in Saskatchewan not so much. I looked at CBC’s website and the Toronto Star’s website and found no mention of it on either site. So not only a Postmedia phenomenon. Apparently it is not that important to the rest of Canada. What could be important is the price of oil. It is about $10 a barrel lower than the Alberta NDP projected in it’s budget. How will this affect it’s already large projected deficit?

    Reply
  3. Farmer B

    June 22nd, 2017

    Actually after more searching I did find a CBC article on it. Increased capital spending and low oil and potash prices as reason’s given for downgrade.

    Reply
  4. J.E. Molnar

    June 22nd, 2017

    Brian Jean and Jason Kenney will always hide under the covers when it comes to bad news about Saskatchewan. Brad Wall fan boys Jean and Kenney have now completely switched their baseless and feeble Alberta government attacks. They no longer praise Saskatchewan, for obvious reasons, and have in recent days shifted their remarks to lionizing B.C. (It will be interesting to see if that continues under the new B.C. coalition government — my guess is Manitoba is next in line to be saluted by Jean and Kenney.)

    Wall, who was once the poster boy for neoliberal economic management, has become the mismanagement guru of Western Canada. With punishing cuts to public services and new consumption tax hikes, as well as reduced income taxes for the wealthy, Wall’s approval rating has dropped exponentially (45%) since his high-water mark in 2011 (71%).

    Reply
  5. David

    June 22nd, 2017

    The Alberta opposition leaders in the past have often cited Saskatchewan as their model of good financial management, so they must be quite embarrassed (apparently now to the point of silence) by the recent Saskatchewan credit downgrades.

    It seems like the model they so admired for quite a while is not working so well anymore – lingering questions about government land sales at a great price to friends that will not go away, a harsh budget full of cuts to lower income people and an increase in sales tax but with corporate tax cuts, a premier whose popularity is falling and whose party is now behind the NDP in some recent polls. I don’t think Albertans realize yet how badly the austerity experiment in Saskatchewan is going and unfortunately the right wing Alberta media are strangely silent about it too.

    At least we will probably not get as many lectures or drive by smears from the Premier of Saskatchewan as he will probably be too busy putting out fires in his own province now.

    Reply
  6. Farmer B

    June 22nd, 2017

    Latest Angus Reid poll released today puts Brad Walls approval 45% and Rachel Notley’s at 28%. Both have went down in their approval since the last poll was taken. Certainly glad I am not a politician!

    Reply
    • St Albertan

      June 22nd, 2017

      You’re likely glad you’re not a forty something public servant in Saskatchewan too!

      Reply
  7. Kang the barbarian

    June 23rd, 2017

    Wasn’t it the ratings agencies who gave the highest ranks possible to the sub-prime mortgage CDOs in Yankee land and said the “too big to fail” banks and insurance companies were in perfect financial shape just before they collapsed?
    Not a great track record, so what do they know about running a country or a province?

    Reply
    • Pogo

      June 23rd, 2017

      Well, the ratings agencies give the great state of Texas an Aaa rating outlook stable. Now I don’t know about you, but having $350 billion dollars of debt and being dependent on federal money for north of 50% of your operating budget sounds like a bit of a house of cards. Why, we ask, do the rating agencies accord them this lofty rank? Because they’re playing ball. Why is Brad Wall’s Saskatchewan miracle rated at the same level as this hellscape of socialism in Alberta? Because he’s doomed their economy to recession and he’s not a yankee, and the conservatives aren’t in power here, so devil take the hindmost. And that my friends is the default position of all “conservative policies”.

      Reply

Leave a Reply

  • (not be published)