Struthers ‘confident’ credit rating won’t be downgraded
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Hey there, time traveller!
This article was published 28/04/2012 (5294 days ago), so information in it may no longer be current.
WINNIPEG — Finance Minister Stan Struthers says he is “confident” Manitoba will not suffer a downgrade to its credit rating despite posting a record $1.12-billion deficit last year and projecting another sizable shortfall this year.
And an analyst with the same agency that lowered Ontario’s credit rating this week appears to concur.
Struthers said he has met recently with several bankers and investors, whom he said are happy with the province’s performance. “We have a good relationship with them because of (the) steady, stable, balanced approach that we’ve taken.”
Manitoba’s deficit soared above $1 billion in large part because of its efforts to combat the effects of last year’s flood. This year, the province projects a $460-million shortfall.
Ontario, which projects a $15-billion deficit this year, saw Moody’s Investors Service downgrade its debt rating this week to Aa2 from Aa1. Credit downgrades are generally accompanied by higher borrowing costs.
But Struthers said he doesn’t expect Manitoba to meet the same fate.
“I’m confident. It’s something the finance minister needs to keep his eye on. And we need to continue the kind of approach that we’ve had for successive budgets…in terms of being stable and steady and being able to communicate that with investors, with bankers and rating agencies.”
Jennifer Wong, a Moody’s vice-president, said Friday her agency has no plans to adjust its rating for Manitoba as a result of this month’s budget.
“We presently have Manitoba rated as double-A1 with a stable outlook,” she said from Toronto.
That puts Manitoba in the same company as Saskatchewan. Only Alberta and British Columbia — both at triple-A — are judged by Moody’s to have a better credit rating, Wong said.
She said the province’s stable outlook means that Moody’s doesn’t see Manitoba’s rating moving up or down “in the near term.”
Factors weighing in Manitoba’s favour, she said, are its plan to pay down the deficit within two years, its diverse economy and the fact that it seldom experiences large economic swings.
» Winnipeg Free Press