REGINA, SK: The Canadian Taxpayers Federation (CTF) is calling on the Manitoba government to cut spending and get the debt under control in light of today’s announcement from Moody’s, a prominent bond rating agency, that it is downgrading the province’s credit rating.

A downgrade of the province’s credit rating will mean higher interest rates when the government borrows new money or refinances existing debt when it comes due.

“When lenders get worried they increase interest rates and Moody’s is clearly concerned that Manitoba is simply borrowing too much money,” said Todd MacKay, Prairie Director for the Canadian Taxpayers Federation. “Manitoba is already spending $842 million each year just to cover interest payments and now we’ll be paying even more.”

Credit ratings from bond rating agencies are similar to personal credit scores. When a family misses mortgage payments their credit score is likely to suffer and they face higher interest payments when their mortgage is renegotiated. The same is true for governments.

Despite raising the PST without the legislatively required referendum, the Manitoba government has still failed to balance the budget or present a credible plan to balance it in the foreseeable future. This year’s deficit will add $422 million to the debt.

“Even after it raises taxes the Manitoba government still can’t balance the budget,” said MacKay. “It’s clear Manitoba has a spending problem and not a revenue problem. It’s time to cut spending and balance the books.”