Documents show COVID-19 pandemic led to record-high deficit in Manitoba

WINNIPEG -

The COVID-19 pandemic pushed Manitoba's deficit for the last fiscal year to a record $2.1 billion, but less red ink is expected this year as the economy rebounds.

The audited final report for the fiscal year that ended in March, released Thursday, said the government took in far less in income tax than expected as businesses were closed and the economy shrunk.

"It certainly was a unique year to be a finance minister," Finance Minister Scott Fielding said.

Gambling revenues plummeted as casinos and video lottery lounges were shut down under public health orders.

Casino revenues, for example, were down more than 80 per cent from the previous year. That was partially offset by a boost in online gambling and higher liquor and cannabis sales.

On the spending side, a few departments -- including health -- ran well over budget as the government responded to the pandemic. There were also hundreds of millions of dollars in new pandemic aid programs, such as wage subsidies for businesses and one-time cheques mailed out to seniors.

Some of the subsidy programs were underspent, however. The documents show very few people took up a subsidy offer for staffing in child care and other facilities. Wage subsidy programs for summer jobs for young people saw millions of dollars left on the table.

Leftover money will be moved to other areas as an anticipated fourth wave of the pandemic arrives, Fielding said.

"We're well-positioned to support businesses and individuals."

The Progressive Conservative government expects the deficit to shrink to $1.5 billion this fiscal year as the economy recovers. Federal transfers are expected to jump, partly due to a recent child-care funding agreement the province signed with Ottawa.

But challenges remain.

More than a year of dry weather has left rivers low and Crown-owned Manitoba Hydro unable to meet export targets. As a result, the government is expecting to $2 million in net revenue from the utility, down from $190 million predicted in the spring budget.

Manitoba has registered deficits in every year but one of the last 11 years. The province's net debt is forecast to approach a record $30 billion this year, equating to almost 40 per cent of gross domestic product.

This report by The Canadian Press was first published Sept. 23, 2021