Skip to main content

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
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter