Skip to main content

The Globe and Mail

Manitoba government’s credit outlook goes from stable to negative

Manitoba Finance Minister Jennifer Howard said she remains committed to balancing the budget by 2016 without major tax increases, but added the province will not fixate on that target if it means turning its back on victims of floods or other disasters.

JOHN WOODS/THE CANADIAN PRESS

A major credit-rating agency has downgraded its outlook for the Manitoba government's finances and raised new doubts about the NDP's promise to balance the books by 2016.

Moody's Investor Services on Monday maintained the government's credit rating at Aa1, but switched its outlook from stable to negative, due to a string of deficits that started in 2009.

"Expenditure pressure and prospects for modest (economic) growth will make it challenging for the province to achieve its target of a return to a modest surplus and stabilizing debt burden by 2016-17," Moody's analyst Kathrin Heitmann wrote.

Story continues below advertisement

"Manitoba's debt burden is expected to reach about 150 per cent of revenues in 2016-17 versus ... 101 per cent recorded in 2008-09. This trend in debt metrics represents a risk to the province's credit worthiness."

Finance Minister Jennifer Howard called the decision disappointing and said it will result in a small increase in the interest the province pays on its borrowings.

Howard said she remains committed to balancing the budget by 2016 without major tax increases, but added the province will not fixate on that target if it means turning its back on victims of floods or other disasters.

She also said the province could have balanced the budget sooner through deep spending cuts, but felt there is more to government than spending cuts and a balance sheet.

"We look at the impact on our kids. We look at how we want to build a province that our children want to live in, that our parents want to grow old in."

Manitoba is not alone. Other provinces such as Ontario have had their outlook downgraded this year by Moody's. Still, the decision is bound to provide political ammunition for the Opposition.

The NDP government started running deficits in 2009 and said during the 2011 election campaign that it would balance the budget by 2014 without major tax increases.

Story continues below advertisement

After winning the 2011 election, the government expanded the provincial sales tax to cover more items, including home insurance, and pushed back its target date for balancing its books. In 2013, the province raised the sales tax to eight per cent from seven.

The next provincial election is expected in April 2016.

Report an error
Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.