Economic rebound, higher federal transfer payments reduce Manitoba’s deficit – SteinbachOnline.com

A recovering economy and higher federal transfer payments helped reduce Manitoba’s deficit by more than half, government financial figures released Thursday show.

The deficit for the fiscal year ended March was $704 million, compared to the $1.6 billion originally projected in the budget and $2.1 billion a year earlier. The numbers were included in the Public Accounts, the final annual accounting of household numbers reviewed by the Auditor General.

A key factor was economic growth of more than nine percent as COVID-19 restrictions were lifted and businesses reopened. This drove up personal and corporate income tax revenues.

“Retail sales increased by 13.3 percent last year,” said Finance Minister Cameron Friesen.

Federal transfer payments also rose, including a one-time special payment of $145 million to clear backlogs of surgeries and other health issues.

On the other hand, last year’s drought caused a sharp drop in production of several crops. It also turned an expected profit at Crown-owned Manitoba Hydro into a $248 million loss as lower water levels reduced power export sales.

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Manitoba has been in deficit since 2009, except for a $5 million surplus the year before the pandemic began.

The ruling Progressive Conservatives have promised to balance the budget by 2028. Friesen said the Tories are focused on meeting that goal but said the province is not over the hill yet.

“There are a number of factors that increase the risk – the ongoing war in Ukraine, ongoing supply chain restrictions, volatile markets,” he said.

Another set of figures released on Thursday suggested the government could make further progress towards a balanced budget in the current fiscal year.

The budget update for the first quarter estimates that the deficit this year will be $202 million — less than half of the $548 million forecast in April. The forecast is based in part on wet weather, which has allowed Manitoba Hydro to export more power and forecast a surplus.

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However, Friesen warned that the projection could change. Recent rate hikes have already prompted warnings from some economists that growth will slow, he said.

Even with a smaller deficit, the province’s total debt is expected to rise to $29.5 billion this year.

The opposition New Democrats said the lower-than-expected deficit should prompt the government to pour more money into health care. Emergency room wait times have skyrocketed this summer and demand for intensive care beds remains above pre-pandemic levels.

“What I heard today is that resources are available to help with the health crisis that is spreading in emergency rooms and hospitals across Manitoba,” said NDP director Wab Kinew.

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“Every day we hear stories of struggles in our emergency rooms, struggles in our hospitals.”

The financial report also disclosed the salaries of government employees who earn more than $75,000 a year.

Public health officials who have helped with the province’s pandemic response were at the top of the list.

dr Brent Roussin, chief public health officer, received total compensation of $634,000 in the most recent fiscal year, up from $428,000 in the prior year. dr Joss Reimer, one of the leaders of the COVID-19 vaccine team, earned $406,000 versus $396,000.

This report from The Canadian Press was first published on September 29, 2022.