Our province’s 2021 Budget is due to be released today. The third quarter results for the 2020-21 fiscal year predictably tell of the story of deficit.
Finance Minister Scott Fielding has just announced the third quarter financial results for the 2020-21 fiscal year, Wednesday, April 7.
“The unforeseen impacts of the COVID-19 pandemic on our finances and economy have greatly affected the revenue and expenditure projections we made last March in Budget 2020,” said Fielding. “The rising costs of our pandemic response, combined with the economic shutdown in the final months of 2020, certainly impacted our third-quarter financials and contributed to our deficit.”
The province is releasing third-quarter results along with Budget 2021 to provide an updated financial picture that captures the significant and ongoing impact of the COVID-19 pandemic.
It reports a modest increase in the deficit forecast for 2020-21 compared to December’s mid-year financial report, to $2.08 billion from $2.05 billion because of additional COVID-19 spending. The minister noted the province would have been in a balanced position for 2020-21 if it were not for the COVID-19 impacts on revenue and expenditures.
Expenses are up $1.6 billion compared to Budget 2020 projections, reflecting additional spending on the COVID-19 public health response and relief programs. The Manitoba government approved nearly $2 billion in supplementary spending in 2020-21 for these purposes, which was offset by some costs across government that came in under budget including nearly $50 million saved on debt-servicing costs due to lower than anticipated interest rates.
The third-quarter report noted a net decrease in revenue of $260 million compared to budget, reflecting the impact of COVID-19 on taxation and other own-source revenue. This includes income tax revenue of $453 million lower than budget due to a deterioration in household income and declines in corporate profits during the pandemic.
“Our government’s priority remains to protect Manitobans from the impacts of COVID-19, and we have invested over $3.2 billion on our response to the health, social and economic impacts of the pandemic this fiscal year to support individual Manitobans and businesses,” said Fielding, who noted Manitoba’s COVID-19 spend is the third-highest level of estimated support in the country on a per capita basis and as a percentage of gross domestic product (GDP).
Budget 2021 will be released this afternoon in the Manitoba legislative chamber and posted online at www.gov.mb.ca/budget2020/index.html. The third quarter report will be included in the Summary Budget and Financial Updates budget paper.