Updated 28 February 2025
On 29 January, the provincial cabinet passed an Order in Council 010/2025 under sections 56, 57, and 58 of the Financial Administration Act to authorize the President of Treasury Board and Minister of Finance “to make advances to or purchase securities of ATB Financial.” This Order rescinds three previous Orders. The advances may be in Canadian dollars or equivalent amount in other currencies. The maximum amount outstanding may not exceed $11-billion.
At the end of September 2024 ATB had GOA advances of $3.583-billion which represented 6.3 per cent of total liabilities. There was no press release from the Alberta government or ATB Financial about the reason behind this huge increase in borrowing from the wholesale markets.
It is difficult to speculate as to the threefold increase to the borrowing limit. One possibility might be a forthcoming announcement in Budget 2025 (27 February) of a new lending program by the provincial government that could not be readily funded through a growth in retail and commercial deposits. We will just have to wait and see.
Clarification-
Prior to the increase, the Minister of Finance was authorized to borrow up to $9-billion under Order in Council 108/2020.
Hence the statement that there was a threefold increase in the borrowing limit is incorrect. It still begs the question was such a difference between the existing borrowing of about $3.6-billion and the new limit of $11-billion. The budget speech made no mention of ATB Financial. Wholesale borrowing through the provincial government is a very quick why of increasing liquidity quickly for ATB in the event retail and commercial deposits become difficult to raise.