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CBC: PC finance minister blames NDP for latest provincial credit downgrade

July 18, 2016 — 

As CBC reports:

…On Thursday, credit-rating agency S&P Global Ratings downgraded Manitoba’s credit rating to AA-minus from AA because it expects the province to have a debt burden for years to come, will have trouble balancing its budget and only has a two-in-three chance of meeting its current financial targets….

The Tories do not, however, plan to balance Manitoba’s budget until their second term, which would begin in 2020 if they are re-elected.

Michael Benarroch, dean of the Asper School of Business at the University of Manitoba, said it’s accurate for Friesen to say the PCs inherited a fiscal mess from the NDP.

“The question going forward is, ‘OK, we’ve inherited this now, what do we do with it?’ ” Benarroch said. “It’s like inheriting your parents’ car that needs some repairs and you say to yourself, ‘OK, do I drive the car without repairing the car, or do I now move forward repairing the damage and seeing if we can move on a different path going forward?’ “

Benarroch said he doesn’t expect the credit downgrade to affect Manitoba’s finances immediately.

“It won’t mean a lot in terms of dollars but it will mean a slightly higher interest rate on the new debt that Manitoba takes out over the next couple of years,” he said.

While interest rates are low right now, when they go up, incrementally higher rates will lead to more accumulated debt, which “could become a problem in the future for Manitoba.”

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