Credit rating agency marks Manitoba’s slowed ‘pace of improvement’
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One global credit rating agency is predicting a slowdown in the Manitoba government’s quest to balance its budget.
According to DBRS Morningstar, the province has one of the most resilient provincial economies, declining deficits, a manageable debt burden, and maintains an A (high) rating with a stable trend.
However, it also notes “the pace of improvement has slowed from our prior expectations,” as Manitoba takes on new spending and tax cuts in its 2023 budget.
“Any monies that they are going to be putting back into the economy through these new tax measures or affordability packages, into health, education, social services and whatnot, these are all simply going to limit the improvement we were seeing… (but) there’s still some buffer because of the revenue gains in the previous two years,” Aditi Joshi, vice-president with the DBRS public finance team, said Wednesday in an interview.
On Tuesday, the province released a 2023 preliminary budget. It proposes to cut personal income taxes by $311 million and increase spending by an average of 12 per cent across all 19 government departments. Health-care spending, for example, will rise by $668 million.
On budget day, Premier Heather Stefanson said it devotes revenues to Manitobans’ priorities and will help those struggling with inflation.
Joshi said those steps will likely delay efforts to erase the province’s deficit, which the budget aims to reduce to $363 million: “Some of these additional spending measures are going to hold back recovery at the same level that we had been previously expecting.”
A DBRS report also notes recent political polls indicate Manitobans could elect a new government in the 2023 election, which the agency says adds some economic uncertainty.
The report notes inflation, high interest rates, supply chain issues and global geopolitical uncertainties also pose risks for the province’s economic outlook.
Joshi said DBRS doesn’t expect any changes to Manitoba’s credit rating at this point.
Born and raised in Winnipeg, Joyanne loves to tell the stories of this city, especially when politics is involved. Joyanne became the city hall reporter for the Winnipeg Free Press in early 2020.