Originally announced as up to $5 billion in March, the province has updated their deficit forecast for 2020-21 to closer to $2.9 billion in an announcement on Tuesday, June 30, 2020.
“The COVID-19 pandemic generated unprecedented public health and economic impacts in our province, which continue to be magnified by the global nature of this crisis,” said Premier Brian Pallister.
Finance Minister Scott Fielding said that the province is planning for one of three economic scenarios.
The first scenario is a quick economic rebound with a net debt expected to exceed $29 billion. The debt to GDP ratio in that scenario would be nearly 41 per cent. Higher interest costs would mean that it would cost $70 million more per year to service the debt.
The other two scenarios would see the economy grow more gradually taking the province longer to recover.
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“The impacts of COVID-19 will take several years to address, and should we have a COVID comeback and the global economy fails to grow, we will wind up with higher projected deficit and debt levels,” said Fielding.
Overall Manitoba’s economy is expected to decline by about 5 per cent in 2020 with the expected loss of around $1.5 billion in revenue. It is expected that revenue losses next year will be around the $1 billion mark.
“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 in a statement. “Beating COVID creates jobs.”
© News4.ca 2020
