Winnipeg Free Press - ONLINE EDITION

Provincial government's poor financial outlook negatively impacts City of Winnipeg: study

  • Print

Manitoba’s poor financial outlook is affecting the City of Winnpeg.

Credit rating agency Moody’s Investors Service announced Wednesday that it is changing the city’s financial outlook from stable to negative – based on the provincial government’s performance.

In a statement, Moody’s said that while Winnipeg has shown disciplined fiscal planning, the city and province are linked financially and if the provincial government’s prospects sour, so do Winnipeg’s.

"In the event the Province of Manitoba were to be downgraded, this would result in a downward rating action on the City of Winnipeg’s rating," the statement from Moody’s said.

While downgrading Winnipeg’s financial outlook, Moody’s maintained the city’s credit rating at Aa1.

It’s uncertain what impact the downgraded outlook will have on Winnipeg’s finances.

Coun. Russ Wyatt, chairman of the city’s finance committee, said the negative outlook could result in a slight increase in borrowing costs – the same impact Finance Minister Jennifer Howard said the province could expect.

"It’s very disappointing because our financial house has been in order," Wyatt (Transcona) said. "It’s unfortunate the provincial government’s financial house is not in order and now they are negatively impacting us.

"We’re being directly impacted by their bad decisions."

Colin Craig, prairie director of the Canadian Taxpayers Federation, said it’s clear that there are severe consequences to the provincial government’s inability to restrain its spending.

"The provincial government’s mismanagement of tax dollars has now impacted the City of Winnpeg and now Winnipeg taxpayers will have to pay twice," Craig said.

Wyatt said he’s particularly concerned that Winnipeg’s financial situation could worsen if Judy Wasylycia-Leis is elected mayor.

"We already have one bad NDP government, we don’t need two," Wyatt said, referring to Wasylycia-Leis’ political ties and her former role as an NDP MLA and MP.

Wyatt said when the province refused to provide additional infrastructure funding to the city, the city has had to increase its borrowing to pay for capital projects – which Moody’s cited in its report.

Moody’s states that Winnipeg’s debt rating "is constrained by Winnipeg’s debt burden that has increased over the last two years to around 58 per cent of operating revenues in 2013 as the city undergoes significant capital projects….Winnipeg’s liquidity profile is solid but low compared to other highly rated Canadian municipalities."

Moody’s said Winnipeg’s financial outlook could be improved if the city were to improve its "fundamentals and financial profile or a return to a stable outlook for the province of Manitoba’s rating."

Wyatt said the city’s financial situation is solely dependent on the province.

"We need the provincial government to get its financial house in order and I don’t see that happening any time soon based on what they’ve been doing."

To read Moody's report on the City of Winnipeg, visit www.moodys.com/research/Moodys-Changes-Outlook-on-the-City-of-Winnipegs-Rating-to--PR_306803

aldo.santin@freepress.mb.ca

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Perry Bellegarde elected as national chief of Assembly of First Nations

View more like this

Photo Store Gallery

  • The sun peers through the fog to illuminate a tree covered in hoar frost near Headingley, Manitoba Thursday- Standup photo- February 02, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • Challenges of Life- Goose Goslings jump over railway tracks to catch up to their parents at the Canadian Pacific Railway terminalon Keewatin St in Winnipeg Thursday morning. The young goslings seem to normally hatch in the truck yard a few weeks before others in town- Standup photo- ( Day 4 of Bryksa’s 30 day goose project) - Apr 30, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

Do you think it's a good idea for Theresa Oswald to enter NDP leadership race?

View Results

View Related Story

Ads by Google