Manitoba confident it can cut deficit by $400M next year despite pandemic uncertainty

Manitoba's finance minister is confident the government can slash the deficit by $400 million even as it braces foranother uncertain year hampered by thepandemic.

After a deficit of about $2 billion for the fiscal year ending Wednesday, the province is estimating a shortfall of $1.597 billion 12 months from now, Scott Fielding told reporters during a conference callTuesday.

Despite the pandemic's grasp over governmentfinances, Fielding said, cutting the deficit by hundreds of millions is "very reasonable."

"The number that we have put out here asa deficit number is a number that will protect Manitobans and will provide some relief for individuals and businesses to ensure they get through the pandemic in fact, we can grow the economy after the pandemic is over," he said.

He wouldn't hint at how the province would accomplish its goal, be itspending decisions orincreased revenues as more businesses reopen fully frompandemicrestrictions.

But he said relief measures stemming from the pandemic would be responsible for much of next year's deficit. He also hinted at otherannouncements beforethe budget is released on Apr. 7.

Deficit forecast once as high as $5 billion

The province's deficit estimates have improved as the pandemic has wornon.

In the early days of the pandemic, Premier Brian Pallister suggested Manitoba's deficit could hit $5 billion.

A forecast last December predicteda deficit of $2.048 billion by the end of March, down from September's forecast of $2.938 billion. The improvedforecastwas attributed to a spike in federal transfer payments.

Fielding said the actual deficit number for the 2020-21 fiscal yearwould be similar to the amount forecast in December, which would make it the largest deficit in Manitoba's history. The previous high of just over$1 billion came in 2011-12 as the province responded to theAssiniboine Riverflood.

NDPfinance critic MarkWasyliw says the government has failed in helping Manitobans through the pandemic.

"Scott Fielding's government has underspent on the services families need, and today he's signaled even more cuts to come next year," Wasyliw said in a statement. "Manitobans want balance when times are good, but in a crisis, they just want a government they can rely on to help them."

Fielding held a news conference Monday to announce the province would dip into its rainy day fund to help businesses reeling from the pandemic.

The government will withdraw $215 million to cover the costs of the Manitoba Bridge Grant program, which provides up to $15,000 for each business impacted by public health restrictions.

Manitoba would have otherwiseborrowed money to pay for these grants. The move will save the province $45 million ininterest costs over the next 10 years, Fielding said.

The province replenished the rainy day fund which is cash the government has on hand to $800 million last year. After the latest withdrawal, Fielding said, the government will still have $585 million for other emergencies that might arise, such as floods and forest fires.

Liberal Leader Dougald Lamont says the province should makeemergencyrelief available in areassuch as education and for people who've lost health coverage.

"The PCs are not actually using the Rainy Day Fund to help anyone. They are using it to make the books look better," he said in a statement.