Mid-Year Economic Performance and Outlook, Quarterly Financial Report Released
Manitoba’s Mid-Year Economic Performance and Outlook and its Quarterly Financial Report for April to September 2009 were released today by Finance Minister Rosann Wowchuk.
“In the face of a global economic recession, Manitoba has out performed other Canadian jurisdictions,” Wowchuk said. “We are moving forward with a steady and balanced fiscal framework focused on stimulus investments that create and maintain jobs while supporting vital services such as health care, education and training, public safety and child protection.”
The Mid-Year Economic Performance and Outlook indicates that Manitoba is outperforming the rest of the country in 2009. The Manitoba economy is forecast to contract by 0.2 per cent in 2009, the smallest decrease among all provinces and significantly better than the projected national decrease of 2.4 per cent.
The province has seen increases in population, labour force and average weekly earnings. However, it has seen declines in other economic indicators such as exports, manufacturing, housing starts and construction.
In addition, Wowchuk reconfirmed the province will not introduce a harmonized sales tax because it would impose more than $400 million in new sales tax costs on Manitoba families at a time of slow economic recovery.
The Quarterly Financial Report shows that Manitoba is forecast to finish 2009-10 with a positive balance of $221 million based on the four-year average of summary results as prescribed under the Balanced Budget, Fiscal Management and Taxpayer Accountability Act.
This will be achieved in spite of challenges facing the government during the current year including:
- a decline in core government revenue of $137 million as a result of lower corporate taxes and reduced federal transfers primarily as a result of the timing of infrastructure projects;
- Manitoba Hydro’s forecast profit of $120 million is $145 million less than budget, reflecting lower energy prices as a result of the global recession;
- an investment of $150 million to deal with the H1N1 flu response and the spring flood; and
- the need for additional investments of $227 million in areas of government priorities including health care, child protection, income assistance, services for people with disabilities and justice.
As a result of these pressures, the province’s summary net income is now forecast as a shortfall of $592 million, said Wowchuk. While significant, Manitoba’s result is the best among all Canadian provinces as a percentage of provincial gross domestic product.
The minister noted that 60 per cent of the shortfall is due to changes in revenue and costs directly attributable to the global economic downturn and unanticipated emergency expenditures.
Wowchuk said budget consultations will be held early in the New Year to consult Manitobans on how best to approach the challenges ahead for the economy in preparation for the 2010-11 Budget.
“In addition to working with departments on short and medium-term expenditure management objectives, we are developing a plan in consultation with Manitobans to restore our finances that will provide a solid foundation for our 2010 budget,” the minister said.
Recent surveys of consumer confidence have shown that Manitobans’ outlook for their personal finances has improved relative to late 2008 and early 2009. Improved consumer confidence will support growth in the provincial economy going forward.
“Our efforts to confront fiscal challenges cannot come at the expense of investments that create jobs or protect core services that Manitobans rely on in health care, justice, education and training that Manitobans rely on, especially during difficult economic times,” said Wowchuk. “We will continue to support investments that create jobs, improve education and training opportunities, sustain our health-care system and help make our communities safer.”
To access the reports go to www.gov.mb.ca/finance/index.html.
Background Information here.