Manitoba may not see promised PST cut next year due to coronavirus: Premier

Premier Brian Pallister may not fulfill a promise to cut Manitoba’s provincial sales tax next year due to the fiscal fallout from COVID-19.

Pallister had promised to reduce the tax from seven per cent to six by this summer, but after the pandemic started he pushed back the idea by one year.

Now, Pallister says he can’t commit to the tax cut because there are too many unknowns about how the pandemic will affect Manitoba’s finances.

“I wouldn’t want to commit to that at this point in time. I think that there’s just too many plus-minuses right now with respect to COVID to do that,” Pallister said.

“That’s actually one of many topics we’ll be addressing … what is the best way to re-enliven our economic progress? Is it lowering the (sales tax). Is it other investments?”

1:25 Manitoba PST reduction on hold; rainy day fund expected to be used up

The premier made the statements after releasing  updated budget figures Tuesday that show the province is expecting a deficit of $2.9 billion dollars this year.

That’s down from $5 billion predicted three months ago, but Pallister says it is still a lot of red ink.

He also warns that the deficit could still reach $5 billion if there is another wave of COVID-19 and businesses have to close again.

The updated budget figures estimate the provincial economy will drop by five per cent this year.

0:39 Brian Pallister on reducing the PST to 6 per cent