Newspaper article The Canadian Press

Moody's Downgrades Manitoba Government's Credit Rating, Cites Growing Debt

Newspaper article The Canadian Press

Moody's Downgrades Manitoba Government's Credit Rating, Cites Growing Debt

Article excerpt

Credit rating drops for Manitoba government

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WINNIPEG - An international agency cut the Manitoba government's credit rating Friday in a move that will likely lead to higher interest payments on the province's growing debt.

Moody's Investors Service dropped the province's long-term rating to AA-2 from AA-1, citing a fast-growing debt load and a failure to meet balanced-budget targets. It is the first Moody's downgrade for Manitoba in more than two decades.

"The downgrade ... reflects the deterioration in Manitoba's financial metrics leading to an increased debt burden and our expectation that the province will face significant challenges in achieving fiscal balance by 2018-19," Moody's analyst Kathrin Heitmann said in a written statement.

"The stabilization of Manitoba's debt burden will depend on the political willingness to rein in spending."

The NDP government started running deficits in the 2009-10 fiscal year, and promised to be balanced by 2015. Instead, that target was pushed back twice -- first to 2017 and now to 2019. Along with the latest delay, the government also said it will only balance its core operations and not the full public budget that includes Crown corporations, universities and other bodies.

In the meantime, Moody's noted, the provincial debt is growing quickly -- from 116 per cent of government revenues in 2011 to an estimated 143 per cent this year. …

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