Manitoba finance minister predicts coming-year deficit of $1.6B

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This article was published 30/03/2021 (1893 days ago), so information in it may no longer be current.

Manitoba’s finance minister has taken the rare step of unveiling the projected size of the coming year’s deficit, more than a week before budget day.

Scott Fielding said Tuesday he expects the province’s deficit for the coming year to reach nearly $1.6 billion. That compares with an estimated $2-billion shortfall for the current fiscal year, which ends March 31.

Fielding said he expects COVID-19 pandemic relief programs to make up “the bulk” of next year’s deficit.

“There will be additional supports and relief that we’re going to identify in the budget that’s coming up next Wednesday,” he told reporters in a conference call.

“We’re going to do what it takes to protect Manitobans. That’s our No. 1 priority.”

Fielding also said the government is withdrawing $215 million from its Fiscal Stabilization Account (rainy-day fund) to cover the costs of the Manitoba Bridge Grant program. Created in November, the program provides up to $15,000 in direct support to businesses impacted by public health restrictions.

To date, the program has paid out more than $205 million to more than 14,000 businesses, not-for-profit organizations and charities.

Fielding said the withdrawal from the fund, a device used by the government to manage cash flow, will prevent the province from having to borrow the money on capital markets. The fund will be left with $585 million after the transaction occurs.

The PC government recently set a goal of eliminating the province’s largest-ever deficit within eight years. If it were to achieve its target for the coming year, it would be on pace to get the job done in only five years.

Fielding said he is confident lowering the deficit from about $2 billion to $1.597 billion — the precise figure he used — is attainable.

“I think that’s very reasonable. I think that’s very doable,” he said.

The minister said Manitobans will have to wait until budget day April 7 for more details on how the government will achieve its deficit target.

It’s unclear why Fielding decided to reveal the projected 2021-22 deficit now. He hinted there will be further budget-related announcements in the coming week.

Last year, the Opposition NDP used procedural tactics in the legislature to delay the delivery of the budget.

NDP finance critic Mark Wasyliw said the Pallister government has continually underspent on services needed by Manitoba families, and Fielding’s budget deficit projection Tuesday signals more of the same.

“Manitobans want (balanced budgets) when times are good, but in a crisis they just want a government they can rely on to help them,” Wasyliw said in a statement.

Chuck Davidson, president and chief executive officer of the Manitoba Chambers of Commerce, said the lower projected deficit is a “hopeful sign” 2021 won’t be as challenging as 2020.

“Most businesses aren’t looking for government supports. They just want the ability to open, and once they are open… the hope is that they will be able to manage over the course of the next year,” he said.

Certain sectors, such as tourism and hospitality, will need continued government support, but there shouldn’t be the need for broad-based programs in the year ahead, Davidson said.

Targeted support could also take the form of assistance for businesses to transition to e-commerce, he said.

Kevin Rebeck, president of the Manitoba Federation of Labour, said the budget deficit projection in itself doesn’t yield a lot of information about the government’s intentions.

Revenue and spending projections — something Manitobans won’t know about until next week — are needed to provide some context, he said, voicing concern about what’s in store in next week’s budget.

The Progressive Conservative government has “been obsessed with cuts and wage freezes for public-sector workers from Day 1,” he said.

“Everyone in the world knows that right now is the time when governments need to invest in the economy, give businesses some supports, and make sure that those who are working are making a fair living wage and get a fair deal.”

larry.kusch@freepress.mb.ca