PROVINCE RELEASES THIRD QUARTER REPORT FOR 2016-17 FINANCIAL YEAR
Finance Minister Cameron Friesen today released the province’s third quarter report for the 2016-17 fiscal year, pointing to increased projections of debt servicing costs as a source of concern for the government as Manitoba pursues the future sustainability of public services and a return to balanced budgets.
“We continue to work in a reasonable and responsible way toward balance as we restore both prudent fiscal management and public confidence in the government’s ability to hit our financial targets,” said Friesen. “As we finalize Budget 2017, our focus remains on making the decisions that will enable us to ensure the sustainability of the services Manitoba families rely on today and into the future.”
The report shows a forecast summary deficit of $872 million, which is an improvement of $39 million from the projected $911 million deficit in Budget 2016. The minister noted this is a better result than the second quarter summary forecast, which projected a net loss of $1.004 billion for 2016-17. Friesen pointed to increases in income taxes and fees as well as other revenue for much of the variance, but the minister cautioned the combined effects of deficit financing and rising interest rates are cause for concern.
The minister noted an increase of $64 million in projected debt service costs over the Budget 2016 estimate of $874 million is due in part to increased interest rates, which are outside the control of the provincial government but have a significant impact on its ability to meet financial targets.
“High debt servicing costs mean hundreds of millions of hard earned Manitoba tax dollars cannot be invested in front line services or capital projects,” said Friesen. “We remain deeply concerned with the uncertainty created by the previous administration's significant borrowing. Our government is committed to strategic investments that will provide Manitoba families with certainty for a prosperous future.”
Canadian economic growth is expected to remain well below its historical average, with 1.9 percent real GDP growth anticipated in 2017. Manitoba's real GDP growth is expected to mirror that experienced by Canada.