An international bond rating agency’s rebuke of the Selinger government’s financial management Monday is cause for concern, Progressive Conservative Leader Brian Pallister says.
On Monday’s Moody’s Investors Service downgraded the outlook for Manitoba’s Aa1 debt rating to negative from stable. It means that it will cost the province more money on future borrowings.
"It is a significant, significant and very serious announcement," Pallister said of the Moody’s report.
He said while the government tries to minimize its impact, it means less money will be available for such priority items as health and education.
The bond rating agency essentially said in its report that it doesn’t believe the NDP government will follow through on plans to balance the province’s books by 2016-2017 as it has promised, Pallister said.
"This is truly an indication of the lack of integrity of this government and the price that all Manitobans are paying as a consequence of it," he said.
The government says the Aa1 credit rating is fourth best among provinces and two steps above what it was when the Progressive Conservatives left office in 1999.
But Pallister noted that Monday’s downgrade was the first Manitoba had suffered in nearly three decades. The province’s rating had climbed under the PCs and under the NDP’s Gary Doer but has now fallen, he said.
Pallister also took issue with a comment by Finance Minister Jennifer Howard that the impact on borrowing costs was relatively small. She said it would mean less than a half per cent increase.
"When the finance minister of the province of Manitoba goes out and tells people it’s no big deal because it’s only half a point, that’s naive at best and it’s misleading at worst," he said. "Because what that means is an increase on borrowing on new debt of a half a point on a prime rate of three (per cent). That’s a 16 per cent increase.
"Let’s not downplay this. Let’s not wrap it up in some kind of comfort blanket and pretend it doesn’t matter. It takes more money away from health care. It takes more money away from education. It takes more money away from the things we care about in this province."