Manitoba’s economic forecast improves

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This article was published 08/11/2017 (3049 days ago), so information in it may no longer be current.

One of the country’s leading economic forecasters is feeling a little more upbeat about Manitoba’s growth prospects for next year.

The Conference Board of Canada’s deputy chief economist told the fourth annual Western Business Outlook symposium in Winnipeg on Tuesday that the board is now forecasting real gross domestic product growth of 1.3 per cent next year for the Manitoba economy.

While that would still be a big step back from this year’s projected growth of 2.9 per cent, it would be a full percentage point higher than the board’s previous forecast of 0.3 per cent growth.

Pedro Antunes said the two main reasons the board thought the Manitoba economy would struggle next year were the pending closure of three northern Manitoba mines, which will take a big bite out of mining production, and the winding down of Manitoba Hydro’s Keeyask generating station and Bipole III transmission line projects.

But it now looks like work on the two Hydro projects won’t peak until next year, he said, which means construction activity next year should be stronger than was first thought.

He said in a later interview the federal and provincial governments are also indicating some of their new infrastructure-spending plans should fall into place in 2018, “so we’re a little more hopeful around that.”

Another positive development is that several new manufacturing operations are coming to the province, including a new $400-million pea processing plant being built at Portage la Prairie.

“That helps mitigate some of the declines,” he said.

Some other things working in the province’s favour, he said, are that the manufacturing sector continues to do well, food exports are on the rise and employment and population growth are strong.

“And population growth is a very important part of driving that fundamental economic growth.”

He said the story the board is now trying to tell is that “it is still a positive story for the province nonetheless. There are a lot of segments that are doing well.”

Antunes told the symposium participants that board officials were surprised at how well the Canadian and Manitoba economies have performed this year.

He said the Canadian economy is expected to post growth of 3.1 per cent for the year. But like Manitoba, it’s also expected to see slower growth in 2018, he said.

Tuesday’s half-day symposium, which was organized by the Conference Board and the Winnipeg Chamber of Commerce, also included a panel discussion on the federal government’s controversial proposed tax changes for small businesses.

The three-part tax plan, first released in mid-July, included restrictions on the ability of business owners to reduce their tax rate by sprinkling their income to family members in lower tax brackets, proposed raising taxes on family businesses being passed down from one generation to the next and addressed passive investment income that allows some business owners to pay business tax on earnings rather than higher personal income tax.

The country’s business community condemned the proposed changes as an attack on small business and entrepreneurism. The mounting criticism prompted the government to subsequently make changes to some of the proposals.

The panellists, who included Antunes and two local chartered accountants — KPMG partner Duane Lamoureux and Olafson & Jones partner Mark Jones — agreed the the proposed changes have created a lot of angst and uncertainty within the business community.

Lamoureux and Jones said maybe the government should establish a royal commission to review the entire federal tax system, which hasn’t undergone a major overhaul since the early 1970s.

murray.mcneill@freepress.mb.ca