Credit agency rates province, Hydro ‘A’, but says elections next fall will add ‘policy uncertainty’ – Winnipeg Free Press | Tech Reddy

The Province of Manitoba and Manitoba Hydro both received an A from the global credit rating agency, but a possible change of government next year, he says, adds an element of “policy uncertainty.”

Both the province and the publicly traded energy company on Tuesday received a high rating for long-term debt, or an A rating and a medium rating, or R-1, for their short-term obligations from DBRS Limited (DBRS Morningstar).

“All trends are stable, supported by a well-diversified and resilient provincial economy, the government’s commitment to fiscal sustainability and prudent debt management,” he said in a press release.

“These attributes provide stability to ratings, although a weakened global economic outlook and an upcoming provincial election in 2023 add an element of political uncertainty and limit ratings improvement in the near term,” he said.

For the year ending March 31, 2022, Manitoba reported a deficit of $704 million — an improvement from the $2.1 billion deficit the year before.

The debt rating service said the ongoing economic recovery, federal financial supports and tight cost management are offsetting the economic pressure resulting from the ongoing COVID-19 pandemic. Manitoba is now projected to have a deficit of $202 million for this fiscal year.

The progressive conservative government projects a decrease in deficits in the medium term, but DBRS says that the recent budget “outperformance” means a balanced budget “remains well within reach”.

However, the credit rating service warns that “the growth of fiscal and economic winds” is likely to stall the improvement of Manitoba’s finances.

The next election is scheduled to take place on October 3 and current polls suggest that a change of government is possible, “adding an element of fiscal and economic policy uncertainty to the outlook,” the DBRS report says.

Finance Minister Cameron Friesen said the report is an affirmation of the “prudent debt management” of the PC government since it came to power in 2016. Now is not the time to relax, however, he said.

“We need to remain focused and disciplined with economic uncertainty and a potential slowdown in the economy across Canada and around the world,” Friesen said in an email late Tuesday.

“In the past year, Manitobans have been affected by record high prices at the pump, rising interest rates, supply chain disruptions and the global impact instigated by the Russian invasion of Ukraine,” he said. “This is a critical time for Manitoba and we are committed to helping Manitobans with everyday affordability, while remaining focused on future fiscal sustainability.”

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Carol Sanders
Legislative reporter

After 20 years of reporting on the growing diversity of the people who call Manitoba home, Carol moved to legislative office in early 2020.

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