WINNIPEG – Manitoba’s Finance Minister says our latest credit downgrade isn’t reason to panic, but it’s a setback.
S& P Global ratings bumped our credit rating to double-A-minus from double-A.
It says the downgrade reflects that our province faces significant challenges bringing itself back to fiscal balance, and that there’s a one-in-three chance our financial targets will not be met.
Finance Minister Cameron Friesen says he’s still trying to figure out exactly how much the downgrade could cost us.
“It is uncertain right now exactly what the effect of this downgrade will be. Obviously we have our borrowings in long-term, medium-term, short-term. Certainly this is not a house on fire scenario, but it’s not good news for the province right now,” he said.
Interest and borrowing costs may be impacted.
Friesen is pinning the blame on years of overspending from the previous NDP government.
But Todd MacKay of the Canadian Taxpayers Federation says the PCs are also at fault for not putting forward a concrete plan for getting the province back to balance.
“When you talk about balancing a budget in eight years, that’s two elections worth of time. That’s sort of like saying half-past whenever. That’s not really a coherent plan,” he said.
He says S&P noted the PCs did not put a five-year projection in this year’s budget, showing where they plan to be in the next few years and how they’re going to get there.”
“If you to your bank and borrow a bunch of money, but don’t have a plan as to where things are going to be in the next five years, you’re probably going to get some funny looks. That’s what’s happening here as well,” he said.
Friesen says the province is ready to start its promised “value for money” audit of government departments any day now.
“Clearly in a number of days now, the work will be underway. It will be multi-phased and we’re hoping for this process to ensue and to report back in the next couple of months,” he said.
They’ve awarded the contract to finance firm KPMG and expect to find about $50 million in savings.
The audit itself will cost about $740,000.