Large deficits and a heavy debt load have dragged down Manitoba's credit rating for the second year in a row.

S&P Global Ratings, formerly known as Standard & Poor's, lowered the province's credit rating on Friday from AA- to A+ because of "large projected budget deficits and further growth in its already-high debt burden over the next two years," says a report on the firm's website.

The firm predicts Brian Pallister's Progressive Conservative government will not be able to prevent more deficits from being posted despite cost-cutting efforts.

"The current government, in power for a little more than a year, has laid out a seven-year path back to operating balance mostly through restructuring its cost base. While these steps bode well for strengthening budget performances in the medium term, they will not prevent the government from posting large after-capital deficits over the next two years, in our view," the report says. 

"We expect borrowing needs associated with these deficits to keep Manitoba's debt burden well above that of its Canadian provincial peers."

Manitoba Finance Minister Cameron Friesen said the downgrade will affect the cost of provincial borrowing but he does not yet know by how much.

"Obviously there's going to be a cost in terms of dollars and cents. We're still running calculations on exactly what that will mean. We all know we have a very significant borrowing requirement in this year," he said, pegging total borrowing at $6.7 billion for this fiscal year.

Friesen blamed the previous government for allowing deficits to get out of control.

"The NDP's failure to get into balance, failure to exercise discipline when it came to financial matters has meant these borrowing costs have increased over time," he said.

The NDP's Andrew Swan said it's clear the Tories' efforts to cut costs have not appeased credit-rating agencies, while finance critic James Allum said the Pallister government is "leaving tens of millions of dollars on the table by not signing the federal health accord, dragging his feet on carbon pricing and refusing to prepare for legalization of marijuana."

Friesen said his government still intends to follow through on an election promise to shave a percentage point off the provincial sales tax and forgo the resulting revenue.