This column was originally printed in the Winnipeg Free Press on July 16, 2016

Obesity isn’t caused by one doughnut, nor is a gold medal won with one workout. Success or failure is the sum of many decisions. So it is with Manitoba’s credit-rating downgrade, announced by international bond rating agency S&P Global on Thursday.

Yes, the previous NDP government deserves blame for years of runaway deficits, but the new Progressive Conservative government also bears some responsibility.

Credit ratings for governments are similar to personal credit scores. People who keep their debts low and make their payments typically have better credit scores and get better mortgage rates. Governments with good credit ratings typically pay less interest on debt.

S&P downgraded Manitoba’s credit rating from AA to AA– with a negative outlook because the province’s debt is getting too high; Manitoba Hydro’s debt is getting too high; and, it sees a significant risk that the situation won’t improve any time soon.

This means Manitobans will likely pay millions more in interest costs. This year, the provincial government is planning to borrow $911 million to cover its deficit. If it pays 2.5 per cent interest on that borrowing, it’ll cost Manitobans $22.3 million every year until it’s paid off. If this downgrade increases that rate by even 0.25 per cent, it’ll cost Manitobans another $2.3 million annually.

The province is already projected to pay $874 million to cover the interest on the current debt.

"The downgrade reflects our assessment of the significant rise in Manitoba’s debt burden," states the S&P release. "This stems from the province’s ongoing fiscal shortfalls and significant debt on-lent to (Manitoba Hydro)."

The first statement is obvious enough. The previous NDP government went into deficit after the 2008 economic downturn and immediately got addicted to deficit spending. The Manitoba government has been running chronic deficits ever since.

The statement about Manitoba Hydro is sobering. The province has been guaranteeing Hydro’s borrowing. It saves Hydro money because it can borrow at a lower rate and theoretically it hasn’t cost the province anything. Until now, S&P hasn’t worried about that because it believed Hydro could handle the debt and raise rates if necessary. Now it’s saying Hydro’s debt is so high there’s a risk the province will be on the hook.

This is despite Hydro’s plans to raise rates by nearly four per cent every year for the foreseeable future. Now, in addition to paying those ever increasing rates, taxpayers will be on the hook for higher interest costs in part due to provincial guarantees on Hydro borrowing.

Chronic deficits and soaring Hydro debt predate the recent election, but the new PC government also plays a role in S&P’s response.

"The negative outlook reflects our view that the province faces significant medium-term challenges to restoring its fiscal balances," stated the S&P release. It goes on to say "the new government has set a target to return to fiscal balance within a lengthy eight years, but did not provide a detailed fiscal plan beyond the current fiscal year."

Hoping to balance the budget in eight years is not realistic for many reasons, not the least of which is the simple fact we don’t know what will happen in the next election. Further, the new PC government’s budget increased spending by hundreds of millions, which made Manitoba’s situation worse rather than better. The new government needs to work harder to trim spending and balance the budget much sooner.

Perhaps most concerning is the fact the PC government still hasn’t provided a "detailed fiscal plan." Every budget includes five-year projections, but when this year’s budget was released, the government said it hadn’t yet had time to do that homework. Fine. But every day that passes weakens that excuse. Taxpayers deserve to see how the government plans to spend their money in the coming years.

Yesterday’s bad decisions were bad, but they are done. Today’s decisions are within the current government’s grasp and they will either compound or correct what came before. The PC government needs to start making better decisions to rebuild Manitoba’s finances.