WINNIPEG -- Manitoba is not immune from the national economic slowdown and the provincial budget could take a hit, Finance Minister Greg Dewar said Tuesday.
Dewar said his department is analyzing the potential impact of new numbers from Statistics Canada which show the country slid into a recession earlier this year.
"If our unemployment numbers stay strong, we feel the impact will be slight," he said. "If Manitobans become concerned about where the national economy is going, you may see a reduction in terms of retail sales, for example."
Dewar said it is "too early to tell" whether he'll have to adjust the $422-million deficit he predicted in the spring budget. An updated number is expected before the end of the month in a quarterly fiscal report.
Statistics Canada reported Tuesday that the country's real gross domestic product shrunk for the second consecutive three-month period in the April-June quarter.
Manitoba's NDP government has been struggling to contain red ink since it started running deficits in the 2009-10 fiscal year. It has twice pushed back plans to balance the budget and now is aiming for 2019.
Even the latest goal is not carved in stone. Dewar said his target date has not been affected by the economic slowdown "as of now" but added it would be monitored. Dewar and Premier Greg Selinger have repeatedly said borrowing money and boosting spending on infrastructure will lead to a healthier economy.
"We were concerned from the earliest days about the fragility of the economic recovery and the information today is that we're on the right path to keep our economy stable," Selinger said Tuesday.
Results to date have been mixed. Statistics Canada said Manitoba's economic growth rate in 2014 was one of the worst among provinces at 1.1 per cent. The Conference Board of Canada, however, has predicted Manitoba will be among the top provinces this year at 2.8 per cent.
Bond-rating agencies have already issued warnings about Manitoba's ongoing deficits. Moody's Investor Services downgraded the province's credit rating in June. DBRS Ltd. maintained its credit rating, but said Manitoba's fiscal results continued to be disappointing.
