Fri. Feb 23rd, 2024

Manitoba faces a deficit of more than $1.6 billion, announces the NDP

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Manitoba Finance Minister Adrien Sala and Premier Wab Kinew announce a deficit provincial much larger than expected on Tuesday.

  • Raphaëlle Laverdière (View profile)Raphaëlle Laverdière

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According to the budget update of the second quarter, presented Tuesday by the NDP government, Manitoba faces a deficit of more than $1.6 billion.

It This is the worst non-pandemic deficit in Manitoba's history, says Premier Wab Kinew.

According to the first quarter budget update, presented in July, the deficit anticipated by the province was $363 million. Data as of September 30, 2023 presented by the NDP government on Tuesday reveals an increase of more than $1.2 billion.

Wab Kinew says irresponsible tax decisions and a slew of unbudgeted spending by the previous Progressive Conservative administration are to blame.

Finance Minister , Adrien Sala, and Wab Kinew, notably mentioned health spending and the ratification of collective agreements in the public sector for which no tax planning would have been carried out.

Provincial revenues have also taken a hard hit, including a spectacular drop in revenue for Manitoba Hydro, we can read in the province's report (New window) (in English).

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For example, a dry summer contributed to lowering water levels, which which reduced the state company's electricity production capacity, a situation which was nevertheless known to the government, says Mr. Kinew.

He adds that the Progressive Conservative Party chose not to take into account the trajectory of Manitoba Hydro and the collapse of its revenues when presenting its budget last March.

Economic slowdowns have also led to a drop in tax revenues, as the province's report indicates.

In sum, total anticipated revenues will be $719 million lower than projected in the 2023 budget, according to the report.

Anticipated spending amounts to 530 million more than what was projected in the provincial budget.

Despite a more complex economic situation than expected, the New Democratic government has committed to delivering on the promises announced during the election campaign and not backing down on the tax reduction measures announced.

Faced with the state of provincial finances, Wab Kinew affirmed that he did not want to be too reactive and that he would take the time necessary to reestablish responsible fiscal management.

If his government inherits a greater challenge than expected, he believes that a balanced budget is still a realistic goal.

He added that more details will be announced in the coming weeks, through a mid-year update.

This news Forecasts place Manitoba third among the most indebted provinces in the country, as indicated by Faïçal Zellama, professor of economics and management at the University of Saint-Boniface.

With the budget deficits of recent years, we were chasing the hope of a balanced budget which we never achieved, he asserts, evoking the promises of the Progressive Conservative Party during its two most recent mandates.

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Professor of economics and management at the University of Saint-Boniface Faïçal Zellama is of the opinion that, faced with all the challenges facing faces the province, achieving a balanced budget should not be a priority.

However, he hopes that the current government will not waste too much energy in political tensions, because the challenges it faces are major. Debt service, inflation, unemployment and economic growth are some of these challenges.

Although it is possible, budget balance should not be an objective in itself, believes Mr. Zellama, because it implies a certain conservatism in spending.

We must diversify our economies. We must think about creating productivity through salary increases, he says.

During a press conference on Tuesday, the interim head of the Progressive Conservative Party, Heather Stefanson, said she accepts no responsibility for accusations of fiscal mismanagement by the NDP.

Manitobans need not be afraid. It's nothing other than political games on the part of the NDP, she responded to journalists.

We left this government in good financial shape, she said, rejecting allegations of unbudgeted spending.

Ms. Stefanson also handed over questioned the publication of this report which, according to her, must generally be made public between Christmas and New Year. She added that it was a purely political maneuver.

She also argued that the figures presented were inflated as much as possible, in order to be able to present better results in the spring.

Heather Stefanson, however, was unable to specify how much the figures were inflated, arguing that her party no longer formed the government.

The interim leader of the Liberal Party, Cindy Lamoureux, reacted in a press release, expressing concerns about the data presented by the province.

[The New Democratic Party] promised to repair the years of austerity under the Conservatives, she wrote in the press release. This gives the impression that this government is setting the stage to announce budget cuts to the services Manitobans depend on.

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