‘Weak fiscal discipline’: Paying more and getting less - Progressive Conservative Party of Manitoba

Not too late to listen to experts and do the right thing for Manitobans: Pallister

DBRS Limited is the latest credit rating agency to warn the NDP provincial government about the impacts of its “weak fiscal discipline”. In the latest DBRS report, the agency provides stern caution on how “Manitoba’s fiscal outlook continues to disappoint with efforts to restore fiscal balance now further delayed.”  Last month, Moody’s took the unprecedented step of downgrading the province’s credit rating for the first time in 30 years. 

“Manitobans are tired of paying more and getting less with the NDP. Raiding the rainy day fund, increasing taxes, spending well beyond our means and increasing the debt on the backs of our children is not acceptable,” said Opposition Leader Brian Pallister. “The budget has not yet passed, so I am advising the premier to heed the repeated warnings of bond rating agencies.”

The DBRS report further indicates that despite the NDP’s financial sleight of hand, our deficit shortfall is closer to $1.3 billion from the budgeted $357 million in 2014–15 after including capital expenditures as incurred rather than as amortized.

Furthermore, the agency continues to chastise the NDP’s fiscal mismanagement by indicating Manitoba has the “longest fiscal recovery plans among all provinces, despite having experienced only a very mild recession in 2009.”

“There is waste in old tired governments and the premier needs to recognize that fact and do something about it. He has an opportunity to prove he can listen to Moody’s and Manitobans and change this risky direction he’s taking,” added Pallister. “That change can start here in Manitoba with an improved provincial budget.”

 

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Backgrounder

 

The following are excerpts from the August 17, 2015 DBRS Province of Manitoba Rating Report:

 

  • “Manitoba’s fiscal outlook continues to disappoint, with efforts to restore balance now further delayed.”
  • “Based on preliminary results, the Province recorded a deficit of $424 million in 2014-2015. On a DBRS-adjusted basis, this equates to a shortfall of $1.3 billion, or 2.0% of GDP. ”
  • “Steady deficits are continuing to boost provincial debt.”
  • “This positions Manitoba with the fourth-highest debt burden among Canadian provinces.”
  • “Provided targets are adhered to, this points to the debt burden stabilizing around 40% of GDP.”
  • “Over the medium term, the budget forecast points to a return to balance by 2018–19, although DBRS notes that these projections are now based on core government operations only and not the consolidated entity… To achieve this, would require greater fiscal discipline than has been achieved so far.”
  • “The 2015 budget points to a return to balance by 2018-2019 for core government operations, which compares to an expected balance by 2016-2017 on a summary budget basis included in last year’s plan.”
  • “This now marks one of the longest fiscal recovery plans among all provinces, despite having experienced only a very mild recession in 2009.”
  • “Manitoba receives approximately 27% of its revenue by way of federal transfers, including roughly 12% from equalization, leaving it exposed to changes in federal transfer programs. This represents the highest reliance on federal revenues outside of Atlantic Canada.”
  • “The Province recorded primary household income per capita of $31,396 in 2013, below the national average of $35,189 (the latest year for which information is available).”
  • “Manitoba also generates below-average GDP per capita, suggesting that productivity and high value-added sectors may be lagging.”
  • “The Province estimates real GDP to have grown by 2.4% in 2014… However based on preliminary estimates from Statistics Canada, real GDP is estimated to have grown by just 1.1%.”