Province's rainy day fund could be gone in three months or less: Pallister
WINNIPEG -- Premier Brian Pallister is calling on the federal government to create a Pandemic Emergency Credit Agency to help provinces with financial struggles related to the COVID-19 pandemic.
Pallister said this would allow the federal government to borrow money on behalf of the provinces because the feds have lower interest rates. The provinces would pay the federal government back.
He added Manitoba has taken a hit in revenue since the pandemic hit.
“Our revenue is down, not a little, a lot,” said Pallister at a news conference on Thursday.
The premier said since his government has come into power, it has worked hard to refill the rainy day fund in case of emergencies. The fund now sits at almost $1 billion, but due to COVID-19, that could change.
“Although we have worked very, very hard to build up that cushion, our funds could be gone in three months or less.”
Pallister added if things get even worse, that savings fund could dry up even sooner.
He feels an emergency credit agency would benefit all provinces, adding some don’t have the same cushion as Manitoba does.
Pallister thinks if this were to be implemented by the federal government, it would allow the province to focus more on funneling money into the healthcare system to fight COVID-19
“Together, we are facing tremendous challenges,” said Pallister in a news release. “Now more than ever, Manitobans deserve a health-care system they can be confident in. The choice is clear, stronger banks, or stronger health care.”
Pallister said this would not be a handout program from the federal government.
“I’m not banging a tin cup here. What we understand is the federal government can borrow at least a percentage point less than we can as a province right. Other provinces are in a similar boat,” Pallister said at the news conference.
Pallister said he has written to the prime minister about this idea and included all the premiers on this option. He has also talked with Deputy Prime Minister Chrystia Freeland about the idea.
PST CUT DEFERRED
To soften the blow, a promise to cut the provincial sales tax to six per cent from seven on July 1 will be pushed back to next year, the premier said.
A provincial carbon tax of $25 per tonne, which was to take effect the same day, is also being pushed back.
Pallister said Thursday that the novel coronavirus pandemic will damage the economy, reduce revenues flowing into the provincial treasury and require large amounts of new spending.
"It's a very, very significant challenge, I would say on a magnitude perhaps without precedent -- maybe wartime, maybe the Spanish flu earlier in the last century," he told reporters.
-With files from The Canadian Press