The province will take out $215 million from its rainy day fund to help offset the costs of the COVID-19 pandemic.
Manitoba finance minister Scott Fielding made the announcement Tuesday.
“We continue to have nearly $600 million in savings for future rainy days, which provides us with additional resiliency for potential emergencies such as floods or forest fires,” said Fielding.
The money will be used to cover the Manitoba Bridge Grant Program, which provides up to $15,000 in direct financial support to businesses impacted by public health restrictions.
It’s the biggest withdrawal in the history of the fund, said Fielding.
The move comes as little surprise as Premier Brian Pallister has said the fund, worth about $800 million, would need to be used.
“Let’s talk about some things that need to be talked about,” he said near the beginning of the pandemic last year.
“Our revenue is down. Not a little — a lot. Way down.”
At that time, the premier said the rainy day fund will likely be depleted within three months.
However, the fund was left alone up until this point, with the province instead borrowing money to pay for the health care and economic costs of the COVID-19 pandemic.
When asked why the province isn’t draining the fund completely, Fielding said it was prudent to leave some for future disasters or emergency situations.
“You could have forest fires, you could have drought conditions … we could need additional supports for the pandemic,” said Friesen.
“We think this is an appropriate amount of money to take out.”
The Manitoba government is also projecting a deficit of just under $1.6 billion for 2021-22
Fielding said the pandemic’s fallout will result in a deficit of just over $2 billion for the current fiscal year.
“Right now our priority is to protect Manitobans,” Fielding said.
Fielding released the projections ahead of next week’s provincial budget.
Most of the deficit can be linked to COVID-19 relief programs and Fielding said more information would be provided in the upcoming budget.
“It will … ensure we can get to the other side (of the pandemic),” he said.
The Tories ran on promises to cut taxes and balance the books over two terms. The government noted a $5-million surplus in the last fiscal year just as the pandemic took hold.
Fielding said the plan is to reduce the deficit over eight years, while replenishing the rainy-day fund.
But he added that there’s a good chance the government might have to dip into the emergency fund again.
Mark Wasyliw, the Opposition NDP’s finance critic, said the government’s decisions during the pandemic have made life harder for many families. He criticized the Tories for not spending the emergency fund on things like “safer classrooms or stronger health services.”
“Manitobans want balance when times are good, but in a crisis they just want a government they can rely on to help them.”
In September of 2019, the PC government added $407 million into the province’s rainy-day fund.
The fund was set up three decades ago and had grown to more than $800 million by 2008.
The previous NDP government regularly took money out of it, partly to help fight floods, and the fund dropped to $114 million in 2017.
-With files from the Canadian Press