Credit rating agency paints rosy picture of budget

Manitoba’s latest budget is on track to eliminate deficits by 2027-28, a global credit rating agency reports.

Morningstar DBRS published its commentary following Manitoba’s release of the provincial budget Tuesday.

“The New Democratic Party government appears committed to its goal of returning to balance by 2027-28,” the report says.

The NDP pledged to balance the budget by the 2027 election during their 2023 campaign run.

The province projects a $498-million deficit during the 2026-27 fiscal year. Net debt-to-GDP could peak at 38.2 per cent, Budget 2026 says.

Morningstar believes a softer economic outlook, extreme weather events and trade disruptions could hamper the government’s fiscal targets.

“Modest contingencies” in the budget and Manitoba’s diverse economy could help mitigate trade disruption pressures, the agency noted.

It called Manitoba’s net debt-to-GDP “manageable.” Refinancing and capital needs will make borrowing more expensive in coming years, Morningstar said.

Public capital spending should bolster economic activity, Morningstar said, offsetting some economic harm from trade uncertainty.