The Manitoba government released its economic and fiscal update assessing the impact of the COVID-19 pandemic, and is anticipating a deficit for 2020-21 in the range of $2.9 billion. The number isn't as bad as originally thought back in April when the province was predicting a deficit close to $5 billion.
Premier Brian Pallister say the pandemic created public health and economic impacts in Manitoba, which continue to be magnified by the global nature of this crisis, "Growing our way out of this pandemic financial hole is the only way forward, which is why our government is focused on getting Manitobans back to work, and restarting our economy."
The province is investing $2.1 billion in the battle against COVID and restart the economy. That spending is targeted as follows:
- protecting Manitobans - $932 million;
- protecting livelihoods - $477 million; and
- restarting the economy - $774 million.
According to the province, planning in underway for three economic scenarios: a quick economic rebound or 'V', a gradual economic rebound or 'U', and a long, limited recovery or 'L'.
Under the 'V' impact scenario, the 2020-21 summary net debt is projected to exceed $29 billion with a net debt at nearly 41 per cent. This is up from 34.2 per cent forecast in Budget 2020. Higher interest costs alone on this new debt amounts to $70 million more per year.
Manitoba's Finance Minister Scott Fielding says the economy is expected to decline by approximately five per cent this year with an expected loss of revenues in the range of $1.5 billion this year and over $1 billion next year. "With additional unanticipated spending underway to combat COVID this year, a rapid restart to the economy will be required or the province's financial problems will deteriorate further."
The premier noted Manitoba's road to recovery will focus on two strategies: continued investments in public health preparedness and increased investment in jobs and growth
"There is only one way out of the global economic and public health crisis, and that is to keep our COVID curve flat and grow our economy," said Pallister. "Beating COVID creates jobs."