The Manitoba Government expects to be in billions of dollars of debt by the end of this fiscal year but remains optimistic that financial recovery is still possible over time.
Finance Minister Scott Fielding today projected that the government will have generated a deficit of around $2.9 billion for the period of 2020-2021. That compares to a deficit of $220 million in Budget 2020. Expenses right now look to be roughly $1.2 billion over budget, a figure mainly attributed to the novel costs of the Manitoba Protection Plan as well as the various #RestartMB programs. Meanwhile, Fielding notes revenue is projected to be roughly $1.5 billion less than budgeted as a result of the economic shutdown.
So far, the province has committed upwards of $2.3 billion to its COVID-19 response and a total of 3.2 per cent of its gross domestic product; a level of per-capita-spending which is exceeded only by Quebec and Ontario.
Even if a vaccine becomes widely available later this year, Fielding anticipates the pandemic will continue to have a significant negative impact on public health and the economy and expects it will take several years to recuperate from the financial losses.
However, the grim forecast of the province’s bank account comes on the heels of what Premier Brian Pallister feels was an impressive period of savings dating back to the Progressive Conservative’s election in 2016.
“After the previous administration doubled our debt, raised taxes, and depleted the rainy day fund, we committed to Manitobans that we would fix the finances, repair services and rebuild our economy, and we kept our word. We inherited a deficit that was on pace to exceed $1.7 billion by today and we tackled that challenge by making the necessary decisions to strengthen services on the front line, by finding waste, overlap, and duplication.”
In the 2019-2020 fiscal year, Pallister says his government had managed to create a $5 million surplus.
According to Fielding, “this modest surplus [was] the culmination of thousands of small decisions every day and several years of careful and prudent fiscal management with a focus on investing in solutions, not throwing money at problems.”
Despite their best efforts to rid themselves of debt, the pandemic has made that objective impossible.
“Now that we’ve fixed the finances, thanks to COVID-19, we have to do it again,” states Pallister. “Manitobans can trust our proven track record to safely and responsibly restore our finances once again. We will continue to make investments to keep Manitobans safe.”