Manitoba budget fails to impress credit-rating agency Moody's
Investors service not adjusting province's credit rating but says budget is credit-negative
A credit-rating agency is suggesting the Manitoba government's recent budget may not help the province's credit rating because it offers a weak fiscal outlook.
The May 31 budget forecasts a deficit of $911 million, down slightly from the previous year, and forecasts a return to balanced books could take eight years.
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Moody's Investors Service says that plan is "lengthy" and points out that provincial debt is now more than 150 per cent of the province's annual revenues.
Moody's is not adjusting Manitoba's credit rating, but says the budget is credit-negative — which means there are concerns about the government's finances.
On the plus side, Moody's says the provincial economy is performing above the national average and government revenues will benefit from low unemployment, a low Canadian dollar and a strong manufacturing sector.
Moody's downgraded the province's credit rating last July to double-A2, citing the previous NDP government's struggles in containing deficits.
In a news release, Moody's said Manitoba continues to face challenges.
"To help finance the higher deficits, the province's debt burden is expected to rise faster than previously forecasted," Adam Hardi, Moody's assistant vice-president, said in the release.
"However, the expectation of continued solid economic growth should help ensure revenues grow at a solid pace."