July 25 2017 – Kevin Yaworski – Public Advocate
Another credit downgrade at the Province after they struggling with opposition to cleanup from at least 17 years of wastful and unsustainable spending by the NDP and City of Winnipeg even with interest rates already on the rise.
The Province’s Net Debt is $23 Billion and imcreasing by almost $1 Billion per year. The City’s is $1 Billion plus large annual deficit. Both have enormous Infrastructure deficits including roafs, hifhways, sewet and water, many bridges in serious need of repair or even closed as unsafe etc..
Mayor Bowman and his finance chair had to go to NYC on a public paid trip to meet withat least one credit review agency last year (to grovel to stave off another downgrade for the City?) and has not improved much so it maybe next.
The biggest issue the public needs to do something about is the ones compensated the most are not being forced to take a pay cut or even a freeze like most of the other public service and many private sector workers.
Our elected and appointed officals at the City & Province have skipped austerity on themselves where it most needed and would have little to no impact. They also skipped Justices, WPS plus Senior Bureaucrats and other unneccessary executives and supertendants etc… at Crown Corps, School Boards & Divisions etc…
Their much higher than Canadian average salaries, benefits, pensions, expense accounts and perks are where the cuts are most needed.
They even ignored calls by one of their own to reduce a Provincial government with more MLA’s per capita then anywhere in Canada. Honourable MLA Steven Fletcher gets rewarded for speaking for his constituents by getting booted from cacus / party. This will cost them in the long run.
More of the public need to let them know their actions or inactions will not be ignored now or at election time.
Here is more details in another great article by Tom Brodeck of the Winnipeg Sun. He rarely shy’s away from the facts regardless of how harmful they are to our elected and appointed officials. I just wish he could speak his mind all the time but know what the paper can publish like most mainstream media is sometimes influenced by pressure on ownership by those in power.
Drowning in red ink! – Winnipeg Sun
— Archive of article if needed —
Drowning in red ink
July 24 2017 at 8:54 PM
Photo – Premier Brian Pallister.
The Manitoba government got another credit rating downgrade. This time from S&P Global, the second one from that bond rating agency over the past year. It’s the third year in a row Manitoba’s credit rating has been chopped. Moody’s Investors Service cut the province’s credit rating in 2015.
It doesn’t come as a great surprise, though, considering the degree to which the former NDP government plunged the province into debt and deficit during its 17 years in office.
It was a reckless reign, the effects of which Manitobans will feel for a very long time as the current government takes steps to bring the provincial treasury back into balance and to halt the destructive growth of government debt.
Left unchecked, the current deficit would have grown even larger and debt would have become so unmanageable, governments would be left with no choice but to slash overall spending in areas like health care and education. So far, that hasn’t been necessary. The Pallister government has brought in some modest cost controls. But their austerity measures are child’s play compared to what would be required five or 10 years from now if the growing deficit was not addressed.
The current government still isn’t doing enough to reduce the deficit and to slow the growth of the province’s accumulated debt, however. No government can, or should, right the fiscal ship overnight in a situation like this, not unless it wants to cause catastrophic harm to the local economy and to front line services.
But the reality is, after two budgets, the Pallister government has still done very little to reduce the province’s deficit. And they’ve been in power for well over a year.
The Tories took over a $865.4-million core government deficit when they won office last year, according to Manitoba’s public accounts. Two budgets later, they’re only planning to lower that shortfall to $779 million in 2017-18. It’s a move in the right direction. But it’s a painfully slow one.
Obviously it wasn’t enough to ward off another credit rating downgrade, no matter how much of that downgrade was due to the actions of the previous government. It’s impossible to know the extent to which the deficit would need to be reduced this year to avoid a credit rating downgrade. But this year’s feeble attempt didn’t help.
Credit rating downgrades are not just abstract accounting matters that only concern government bean counters. They have a real impact on Manitobans.
The lower the credit rating, the more expensive it is for government to borrow money. Not just new money, either. Governments borrow new money to finance operating deficits and to pay for capital projects like new schools, highways, bridges and hospital wings. But governments also have to refinance old debt that comes due. Also, about 8% to 10% of the province’s debt is financed through floating interest rates.
Add in the fact that interest rates are now on the rise in Canada and it’s not difficult to understand how Manitoba’s growing debt problem has an impact on front line services.
As debt servicing grows – it’s now approaching $1 billion annually – the less funding there is available for health care, education, child care, justice, infrastructure, etc.
Meanwhile, the former NDP government, now in opposition, cries foul at even the smallest moves by the current administration to control spending. Yet they take no responsibility for the financial mess they left behind.
Not once have I heard either NDP leadership candidates Wab Kinew or Steve Ashton offer a single idea on how to get the province’s books back into the black.
Deficits are real. Skyrocketing government debt is real. And we’re now seeing the impact that kind of irresponsible governing has on our everyday lives