View From the Legislature

Your credit score likely isn’t something you think about often. Maybe you have paid to see what your credit score is and to ensure that it properly reflects your financial history. No doubt, when you are taking out a loan or applying for some form of credit, those that are taking the application are checking on your credit score to determine whether to approve the loan or credit. Ultimately, your credit score will not only determine whether you get the loan, but likely the interest rate you will have to pay on it.

Similarly, governments have to be concerned about their credit rating. Manitoba, like all governments, loan money and the credit score that it receives from credit rating agencies determines the interest rate it will have to pay and ultimately how much interest taxpayers end up paying on the loans.

For the past few years under the former NDP government, Manitoba’s credit rating continued to slide as the deficit grew annually and the accumulated debt got bigger and bigger. In fact, had the NDP been re-elected, it is projected that another $5 billion would have been added to the debt, costing Manitobans another $183 million in annual interest.

Our governments effort to get the finances under control was again recognized last week by global credit rating agency DBRS, which reported its confidence in the provinces commitment to balance the budget over the medium term. It noted the improved budget forecasting and the fact that the budgetary goals are being met and often exceeded.

This matters because debt and interest are really just deferred taxes. Eventually those have to be paid and they are usually paid by young Manitobans as they enter their income earning years. Essentially, this borrowing is happening on the next generation. Fortunately, the plan to eliminate the deficit is working and is being recognized by credit agencies. This is saving taxpayers, today and tomorrow, higher interest rate costs. Just like in your own home, this matters. Together we can ensure a better financial situation for ourselves and our children.