The Aug. 23, 2014, edition of the Brandon Sun contains a letter to the editor from the provincial Progressive Conservative Leader Brian Pallister, wherein he criticizes the NDP government with respect to the downgrading of the provincial credit rating by Moody’s Investor Services.
He maintains that the provincial government should be changed and wasteful spending eliminated in order to “change the province’s outlook from negative to positive.”
In and out of the legislature, Mr. Pallister has promised that if elected his government would cut spending by substantial amounts. We are not told exactly where he would cut and what programs would be reduced or eliminated. Any significant reduction would certainly damage our health care and social service programs, where approximately 70 per cent of provincial spending occurs. Furthermore, curtailment of total government spending would hurt economic growth.
It is important to note that our provincial debt in relation to our GDP in 2014 is 29.8 per cent, which is lower than the 1999 level of 32.9 per cent when Mr. Pallister’s party left office. In fact, our ratio today is the fifth lowest of all the provinces and is below the federal average.
Based on the public accounts of all our jurisdictions, RBC estimates that the net debt per capita in 2014-15 is lower in Manitoba than the federal net debt and ranks the fourth lowest in Canada.
We should also note that in the same report issued on Aug. 18, in which Moody lowered its outlook on Manitoba’s debt rating to negative from stable, it nevertheless reaffirmed the existing rating of Aa1.
It states that this reaffirmation (1) reflects the diversity and stability of Manitoba’s economy with low unemployment rates; (2) the province’s high degree of financial flexibility with a broad and stable tax base; (3) manageable refinancing needs; (4) high debt affordability; and (5) a sound, although declining level of liquidity.