The provincial treasury department got a vote of confidence from Moody’s Investor Services, the credit rating agency, which just affirmed its Aa2 rating for the province.
Finance Minister Cliff Cullen said it is a recognition of the Manitoba government’s efforts to build a path to balanced budgets.
Despite forecasts of slower economic growth in Canada, Moody’s notes that Manitoba’s plan to contain debt increases leaves it in a better position to weather any economic storms due to Manitoba’s diversified economy and long-term financial plans.
Moody’s said that while affordability programs that have been rolled out may limit revenue growth and increase expenses, it sees these measures as being used to support individuals and businesses to make ends meet in this high-inflation environment.
Due to the province’s debt mitigation efforts, interest costs as a percentage of revenues are in line with historical levels.
“In talking to people across the province, I have been hearing first-hand how much Manitobans have suffered from the burden of rising costs due to inflation and the cost shock of the federally imposed carbon tax. That is why our government is taking a balanced approach in providing financial relief to Manitobans and making historic investments in health care, education, justice and social services,” Cullen said in a statement.
The province’s commitment to work toward balanced budgets and efforts to limit debt increases led the rating agency to upgrade the baseline credit assessment to Aa3 from A1, he said.
Moody’s noted Manitoba government’s stronger governance and management as reflected by prudent financial planning, improved forward planning, transparent reporting, liquidity and debt levels.
However, Moody’s states the rating could be upgraded if a faster fiscal and economic recovery supports a hastened rise in revenue or reduction in debt burden relative to current projections.
Furthermore, increased liquidity over the next three years could lead to an upgrade in Manitoba’s ratings.
