Manitoba predicting $2.9B deficit due to COVID-19
WINNIPEG -- The Manitoba government announced its economic and fiscal update, and the government says it is expecting a deficit of $2.9 billion for 2020-21.
The announcement was made Tuesday afternoon by Premier Brian Pallister and Finance Minister Scott Fielding.
The government also said the deficit could be as high as $5 billion if the economic downturn continues or there is a COVID-19 comeback.
The province said it is investing $2.1 billion to fight COVID-19 and restart the economy.
Of that money, $932 million will go to protecting Manitobans, $477 million will go towards protecting people's livelihoods, and $774 million will be earmarked for restarting the economy.
The government is also planning three economic scenarios, a quick economic rebound, a gradual rebound, or a long, limited recovery.
Pallister has said they are working towards having a quick economic rebound, which would see a projected net debt of $29 billion with a net debt to GDP ratio at nearly 4 per cent.
The government also noted that Manitoba's economy is set to decline by around five per cent in 2020, with a revenue loss projected at $1.5 billion this year and over $1 billion in 2021.
Despite the deficits, Pallister gave a short and direct "no" when asked whether or not the government will consider raising the PST.
Pallister said there are some principle ways to try and build the economy.
"Investing in infrastructure, continuing to maintain our public service and enhance the way it does business, stimulating the private sector, and most importantly creating additional opportunities for discretionary income to be used to create jobs," said Pallister. "You don't recover by raising taxes on people. You take money off the kitchen tables and away from the small businesses of Manitobans then you are hurting the economy. That is not our intention."
When the government released its budget for this year, the premier said the plan was to cut the PST by one percentage point, but that has been put on pause due to the pandemic.
Pallister said he doesn't want to commit to anything right now on whether or not the PST could be lowered next year, adding that his government continues to look at all options moving forward.
GROWING THE ECONOMY
Fielding said the government has a plan in place to help rebuild the economy.
"Really, our two strategies to restart the economy is investing in public health preparedness, just like the premier had said. That's the most important thing. We know what's been happening in some of the southern parts of the United States, and investing in jobs and growth. That’s the way we are going to grow ourselves out of this pandemic," said Fielding.
Pallister was also asked if there is any plan from the government to cancel building schools.
"We're not cancelling any plans to build schools. Our intention is to build 20 schools over the next decade in Manitoba. We have a number underway. We are going to continue to focus on making progress on that front. We need to have more and better schools as our population grows," said Pallister.
Following the province's fiscal announcement on Tuesday, Manitoba's opposition leader Wab Kinew said there are issues.
"This plan neglects real substantive measures that are going to make a difference for the person who wants to get back to work or who wants to save their business," Kinew said.