Photo: The Canadian Press

Alberta Finance Minister Travis Toews

The Alberta government's credit rating has been downgraded by an agency that cited the province's reliance on oil revenue and what it calls its high environmental risk.

Moody's Investors Service has adjusted the province's rating to Aa2 stable from Aa1 negative.

The rating service cites weakness in the provincial economy that remains concentrated and dependent on non-renewable resources — mainly oil.

It says reliance on such resource revenue causes volatility in financial performance and remains pressured by a lack of sufficient pipeline capacity to transport oil efficiently.

Moody's also focused on climate change.

"In Moody's assessment, environmental considerations are material to Alberta's credit profile and Moody's considers environmental risk to be high," the report said.

"Alberta's oil and gas sector is carbon intensive and Alberta's greenhouse gas emissions are the highest among provinces.

"Alberta is also susceptible to natural disasters including wildfires and floods which could lead to significant mitigation costs by the province."

United Conservative Finance Minister Travis Toews blamed the lower rating, which affects how much interest the government pays on borrowed money, on previous governments.

"Over the past four years, the previous government drove Alberta into a fiscal crisis with policies that weakened growth and business competitiveness," Toews said Tuesday in a release.

"That's why balancing Alberta's budget, growing the economy and creating jobs are our top priorities."