The Manitoba government says it made it through the last fiscal year with a slight surplus, but is forecasting the province’s debt to rise significantly with the added costs of COVID-19.
In a report on Manitoba’s public accounts for the 2019-20 fiscal released Tuesday, the province says it ended the year with a $5-million surplus on $17.6 billion in total spending. The government had originally predicted a $360-million deficit.
But the 2019-20 fiscal year ended March 31, 2020, only a few weeks after the first case of the novel coronavirus was identified in Manitoba and just days 11 days after a provincial state of emergency was called over the virus.
That means the report doesn’t capture much of the economic effects of COVID-19.
It’s the first time the Manitoba government has registered a budget surplus in more than a decade, and follows a string of deficits that started under the former NDP government in 2009, which led to credit rating downgrades by two international agencies.
Premier Brian Pallister said the province could have faced another downgrade — and higher borrowing rates — had the deficit not been wrestled down.
“That would have been an even greater financial burden on Manitobans,” Pallister said.
The numbers show income tax revenues came in well above expected due to economic growth, and federal transfer payments were slightly higher than forecast.
On the spending side, the government paid out $200 million more than budgeted in health care, but spent $404 million less than expected on infrastructure.
The infrastructure savings were the result of delays in projects such as new health care information technology and a flood outlet on Lake St. Martin, the government said.
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The Progressive Conservative government has reduced the deficit partly through controlling public sector salaries since taking office in 2016.
It imposed a wage freeze, but that was dismissed by a Court of Queen’s Bench judge earlier this year in a ruling that the government is appealing.
It has also cut the number of public-sector jobs. A report issued Tuesday by the province’s civil service commission tallied 12,371 current civil service jobs — down more than 400 from last year.
The province’s auditor general said the provincial surplus should actually be $43 million. The auditor general and the government have been at odds in recent years over how to account for losses and gains at the Workers’ Compensation Board and agricultural insurance trusts.
Significant deficit expected
But the province also provided a look at the current financial situation in the midst of the coronavirus pandemic, and the numbers aren’t so rosy.
While numbers are estimated, and subject to change, the provincial government says it is likely Manitoba’s debt will increase by $2.2 billion to $28.6 billion by March 31, 2021, due to pandemic spending and a dip in revenue.
That number could grow if the economy does not rebound as quickly as expected from the pandemic shutdown in the spring, Pallister said.
“If there are uncertainties, I think we all understand and accept that reality.”
Manitoba Finance Minister Fielding said he expects it will take several years to address the fiscal impacts of the virus.
Opposition NDP Leader Wab Kinew said Pallister’s deficit-cutting agenda has hurt services such as health care. He pointed to three emergency departments at Winnipeg hospitals that have been closed or converted to less-urgent care.
Kinew also suggested the infrastructure delays are not a real saving.
“Every school that doesn’t get built this year, every road that doesn’t get fixed, is a road and a school that will need to be repaired by the next generation,” Kinew said.
The balanced budget marks a milestone for Pallister, who had promised to end annual deficits before the next election slated for 2023.
When asked whether he would leave politics by then or run for another term, Pallister was noncommittal.
“My intention is going to be shared with you when I decide to say something about that.”
Later in the day Tuesday provincial health officials reported 34 new cases of COVID-19, including 26 in the Winnipeg health region where restrictions on gathering sizes and a mandatory mask order went into effect Monday.
Since March Manitoba has reported 1,953 cases of the virus, including 20 deaths. As of Tuesday the province said there were 606 active cases of COVID-19 in Manitoba.
–With files from Steve Lambert with The Canadian Press
Questions about COVID-19? Here are some things you need to know:
Symptoms can include fever, cough and difficulty breathing — very similar to a cold or flu. Some people can develop a more severe illness. People most at risk of this include older adults and people with severe chronic medical conditions like heart, lung or kidney disease. If you develop symptoms, contact public health authorities.
To prevent the virus from spreading, experts recommend frequent handwashing and coughing into your sleeve. They also recommend minimizing contact with others, staying home as much as possible and maintaining a distance of two metres from other people if you go out. In situations where you can’t keep a safe distance from others, public health officials recommend the use of a non-medical face mask or covering to prevent spreading the respiratory droplets that can carry the virus. In some provinces and municipalities across the country, masks or face coverings are now mandatory in indoor public spaces.
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