Uncertainty weighs on Manitoba’s short-term growth: Conference Board

Manitoba’s economic growth will nearly flatline this year, according to a new Conference Board of Canada report.

The research organization expects better growth in the coming years — but only if global trade uncertainty subsides.

“The worst thing that could happen is the uncertainty of not knowing what’s going to happen with tariffs keeps dragging on,” said Richard Forbes, principal economist with the Conference Board of Canada.

U.S. trade measures and Chinese tariffs have hampered Manitoba’s economy in 2025, the Conference Board said in a five-year outlook released Monday.

It projects Manitoba’s GDP to increase by 0.8 per cent this year — falling just short of the 1.1 per cent estimated for Canada — and rising another 1.4 per cent in 2026.

The Conference Board has assumed, for the report, that trade uncertainty will dissolve following a Canada-United States-Mexico Agreement review set for 2026.

“If there’s some tariffs in place after the CUSMA review, but we have a better line of sight that they’ll stay on for a longer period of time, that might be a better situation than actually having no idea,” Forbes said.

Businesses have delayed investing and consumers have pulled back on spending, as Canada and the United States levied tariffs on each other, Forbes added.

Meanwhile, Manitoba’s agriculture sector has been hit by Chinese tariffs on canola and pork. The tariffs range from 25 per cent to 100 per cent.

The province’s overall exports dropped three per cent year-over-year — or $312.4 million — between January and June.

Immigration and Manitoba’s relatively young population should help boost the province’s economy, Forbes said.

The Conference Board expects Manitoba’s unemployment rate to fall to five per cent by 2027 from 5.8 per cent in October. Forbes pointed to a better economy increasing job openings and baby boomer generation retirements.

Manitoba had the lowest median age — 37.3 — among the provinces in July 2024. There are 1.2 Manitobans aged 15 to 24 for every potential retiree aged 55 to 64, a September 2024 Manitoba Bureau of Statistics report reads.

Manitoba will join Alberta and Ontario in leading non-residential investment gains between 2027-30, the Conference Board’s outlook says.

Ottawa has tabbed $51 billion for local infrastructure spending in its latest budget. Manitoba also holds “notable” private-sector investments, Forbes said, highlighting construction on a Lynn Lake gold mine and a major Arctic char fish facility in Rockwood.

The aquaculture site’s creator, Sapphire Springs Inc., said in 2023 the facility should open by 2027. Gold mine production could start in 2028.

Canada has lacked private-sector spending over the past decade, said Philippe Cyrenne, a University of Winnipeg economics professor.

“What all the provinces need is private-sector investment,” he said. “I think Manitoba, if they’re focusing on private-sector investment — or encouraging that — then that’s a good idea.”

Further distribution of Manitoba-based electricity and increasing mining are routes that could be positive, Cyrenne said. The provincial government has publicly touted both options.

However, Manitoba ran a $1.1 billion deficit by the end of the last fiscal year, ending March 31. It could lead to increased taxes and government spending cuts down the line, Cyrenne noted, adding the feds could do the same.

Cyrenne criticized the Conference Board for playing down “what’s happening in terms of … government spending” and being too optimistic about near-term exports.

The Conference Board’s report says provinces have “largely navigated recent shocks better than anticipated.”

“I know the government’s in deficit, but we’re still pretty positive on the … finances right now,” Forbes said.

All provinces are projecting deficits this year and some are still recovering from COVID-19 pandemic debt accumulation, he added. “Manitoba, in the relative sense of things, is actually doing fairly well from a fiscal standpoint.”

gabrielle.piche@winnipegfreepress.com