Manitoba Government Keeps Its Word to Balance the Books, Reports Modest Surplus in 2019-20 Year-End Fiscal Report

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COVID-19 Poses a Significant Fiscal Challenge, But Manitobans can Trust Our Proven Track Record to Restore Our Finances Once Again: Pallister and Fielding

Through fiscal discipline and targeted front-line investments over the past four-and-a-half years, the Manitoba government is reporting a modest surplus in its 2019-20 year-end financial results, Premier Brian Pallister and Finance Minister Scott Fielding announced today.

 

“We were elected in 2016 with a monumental challenge and a monumental opportunity,” said Pallister. “After the previous administration doubled our debt, raised taxes and depleted the rainy day fund, we committed to Manitobans that we would fix the finances, repair services and rebuild our economy, and we kept our word. We inherited a deficit that was on pace to exceed $1.7 billion by today and we tackled that challenge by making the necessary  decisions to strengthen services on the front line, by finding waste, overlap and duplication.” 

 

With prudence, determination and foresight, the province was able to achieve balance while making record investments in health care, education and families, the premier noted. The Manitoba government finished the 2019-20 fiscal year stronger, more resilient and flexible to handle the pandemic-related challenges that face every government across the globe, he added,

 

The Manitoba government released its public accounts for the 2019-20 fiscal year with a $5-million surplus, which is $365 million better than the $360-million deficit estimated in Budget 2019. The premier and minister credited the surplus to a careful balance of controlled expenditure growth with simultaneous tax reductions. Since 2016, the government has strongly increased spending on health, education and families by $3.4 billion and put nearly $700 million back on the kitchen tables of Manitoba households and businesses through lower taxes and fees.

 

Careful fiscal management measures taken since 2016 have saved the province nearly $200 million in annual interest costs by avoiding $10.5 billion of incremental debt by the end of 2020-21.

 

“Today is an important milestone as it reflects diligent work, planning and focus since 2016,” said Fielding. “This modest surplus is the culmination of thousands of small decisions every day and several years of careful and prudent fiscal management with a focus on investing in solutions, not throwing money at problems. We’ve achieved balance while keeping our promises to lower the PST, replenish the rainy day fund and balance the budget.”

 

As committed in Budget 2019, the province reduced the retail sales tax to seven per cent from eight per cent July 1, 2019. It replenished the rainy day fund to $800 million, which the minister noted remains available should the need arise as the COVID-19 pandemic continues and is an important piece of financial security to assure Manitobans the province is better prepared to weather this storm.

 

Manitoba’s economy performed strongly in 2019-20 and continues to be among the leading provinces in private-sector investment. Private-sector capital investment increased by 26 per cent in the past two years, the second-highest rate among provinces. Income tax growth exceeded the province’s expectations by $265 million, reflecting a strong local economy and job growth. 

 

As COVID-19 hit Manitoba with less than a month left in the fiscal year, which ended March 31, the public accounts report does not capture much of the pandemic’s impact on provincial finances. Today, the province also issued its First Quarter Report for 2020-21, which provides a fiscal year forecast and economic update.

 

Despite Manitoba’s relative successes, the forecast predicts the pandemic will create significant public health and economic impacts, even if a vaccine becomes widely available in 2021. Projections for the 2020-21 fiscal year show a deficit of $2.9 billion, compared to a deficit of $220 million noted in Budget 2020, Fielding said, adding the province expects it will take several years to address the fiscal impacts. Expenses are projected to be over budget by nearly $1.2 billion, reflecting the additional costs of the Manitoba Protection Plan and #RestartMB programs and revenue is projected to over $1.5 billion lower than budget as a result of the economic shutdown related to COVID-19, Fielding noted.

 

“Now that we’ve fixed the finances, thanks to COVID-19, we have to do it again,” said Pallister. “The global pandemic will continue to pose significant fiscal challenges, but Manitobans can trust our proven track record to safely and responsibly restore our finances once again. As we carefully grow our way out of this pandemic, we will continue to make investments to keep Manitobans safe.”

 

Because of Manitoba’s strong position entering COVID-19, the province was able to devote $2.3 billion to its pandemic response, 3.2 per cent of its gross domestic product (GDP), which is the third highest per capita pandemic spending in Canada after Quebec and Ontario, the two hardest-hit provinces. The Manitoba government created a robust set of spending programs and made significant investments in the health-care system, such as large procurements of personal protective and medical equipment, and expanded testing capacity. Other investments included public health preparedness, job supports and economic stimulus to protect Manitobans and their livelihoods.  

 

View the 2019-20 public accounts and 2020-21 first quarter report at: 

www.manitoba.ca/governmentfinances. 

 

The province will release a 2020-21 second quarter report in December.

 

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