Preparing a province’s budget — not once, but twice

Hey there, time traveller!
This article was published 24/02/2025 (246 days ago), so information in it may no longer be current.

There’s a thing called prudence.

And it’s especially important in chaotic times. And for Manitoba’s finances, these are just about as chaotic as times could be.

The provincial budgeting process is much more involved that most people realize: the process doesn’t start in January or February for a March budget, but much, much further back in the early autumn of the year before.

By the time public consultations start in late January, the framework of the budget is already well set: provincial departments have set their priorities in the fall, and have gone back and forth with finance departments and treasury boards, fine-tuning what their final budgets are going to be. The public consultations are pretty much window dressing, designed more to demonstrate support for what the government already plans to do anyway, rather than to shift direction in any meaningful way.

But governments like to claim they’re listening, so the process goes on.

The point is, the budget is a long and complicated process of weighing policy goals against fiscal realities, of planning — with the best information governments can get in the way of forecasting — where revenues are going to come from. The variables are near-endless — employment rates, home construction starts, business investment confidence, federal fiscal moves, costs of established and new programs, the effect of wage increases on the provincial fiscal situation (both in terms of money to be paid out, and potential returns on increased spending by employees) and the list goes on.

Now, imagine trying to do it twice in one year, instead of one.

That’s the issue facing all 10 Canadian provinces, as well as the federal government. And all because of our capricious, tariff-happy, unbridled neighbour to the south.

Manitoba Finance Minister Adrien Sala is preparing for two different scenarios — essentially preparing two different budgets — one if the U.S. goes ahead with its planned regimen of broad-based tariffs on exports from Canada to the United States, and another if the tariffs don’t go ahead.

That’s a measure of just how fluid the situation is right now: with less than two weeks to go before the end of President Donald Trump’s pause on a 25 per cent tariff on all exports to the U.S. from Canada and Mexico (except oil and other energy, which would face a 10 per cent tariff), it’s still not clear what’s going to happen.

The issue is critically important to Canada — less so, apparently, to U.S. Vice-President JD Vance, who joked in a message to the U.S. hockey team before the championship game in the 4 Nations Face-Off that, “We’d like you to kick Canada’s asses again because you don’t boo the United States of America. To Canada, if you don’t win, the tariffs are going even higher!”

He followed that with “No, I’m kidding … that’s the president’s decision.”

Forgive us for not seeing the humour in any of that — but it does indicate the seemingly high-school grade attention that seems to be going into analyzing the potential fallout in America, Canada, Mexico and worldwide, due to Trump’s fickle behaviour.

And so, we have to be ready for pretty much anything. After all, since the original tariff announcements on Mexico and Canada, Trump has promised to pile on additional tariffs on steel and aluminum, along with reciprocal tariffs on any tariff levelled on U.S. products — and anything else he considers to be acting as a non-tariff barrier.

Just the way the federal government is now moving to lift as many interprovincial trade barriers as possible, provincial governments have to have hip-pocket-ready budgets that take into account the imposition of American tariffs, and more.

That extends to all of us: the coming months, and maybe much longer, look like they’re going to be extremely difficult for Manitobans and all Canadians.

Just remember this saying from Benjamin Franklin, even if he was American: “By failing to prepare, you’re preparing to fail.”