Manitoba government promises 'emergency-ready' 2020 budget

Brian Pallister's Progressive Conservative government is confident it can slash taxes, even while the global market surrounding it is under extreme stress.

The Manitoba government will test that belief Wednesday, when it reveals a spending plan for 2020 that is expected to cut taxes, while still plotting a course toward a balanced budget amid a precarious worldwide economy.

"I would suggest to you with uncertain times, it's more than important to provide some tax relief to small and medium-sized businesses," Finance Minister Scott Fielding said Tuesday.

Fielding was speaking at Fort Richmond Collegiate, where his government announced it would ease the payroll tax, exempting an estimated 220 employers from paying it.

That's not the only tax relief his government is promising. Last week, Manitoba Premier Brian Pallister vowed to cut the provincial sales tax by another percentage point this year — a repeat of his signature 2016 election promise, which the province delivered on in last year's budget, when the PST was dropped to seven per cent.

Pallister said his government will use revenues from a new provincial carbon tax to pay for the drop to a six per cent PST.

Taken together, the province is whittling away at its own revenues even as oil prices plunge, stock prices stumble and the spread of COVID-19 threatens to hamstring the economy. 

'Most emergency-ready budget'

Fielding was confident on Tuesday the Manitoba government can weather the storm, saying he will table the "most emergency-ready budget" in the province's history.

"We've taken moves even before these situations came up with the coronavirus, as well as others," Fielding said.

He referenced the $400-million injection last year into the rainy-day fund, a reserve account for unforeseen emergencies such as flooding. 

Fielding said there will be other measures in the 2020 budget to ensure the province can withstand a challenging economic market.

"We'll also be outlining some projections we have taken in consideration with the recent events … to make sure that we're comfortable in terms of the numbers," the finance minister said.

For now, Fielding said "we've planned well, we've budgeted well and we think that there's a lot of contingencies that are in place."

Premier Pallister said his government is in a more comfortable position today than when the NDP was in power. The province's deficit has been shaved from $932 million in 2016 to a forecast $325 million.

"We're trying to be ready for the worst, but hope for the best," he told reporters. "We're acting out of a sincere degree of caution, obviously, given the uncertainty of the circumstances."

But he warned against overreacting. A government cannot bounce from crisis to crisis while dismissing the challenges ahead, Pallister said.

"People are wanting, I think, their government … to do their best to prepare for the eventualities that may ensue, while at the same time not unnecessarily feeding a sense of panic."

NDP Leader Wab Kinew questioned whether the government is prepared for a slumping economy.

"When we parse the words that we've heard from the premier and the finance minister, it looks like they're just using the typical range of projections that they have in every year's budget, that every government does, but we should recognize that we are potentially at a more severe inflection point," he said.

"I think that the government should be taking the worst-case scenario options more seriously and should be putting in place measures to respond to that," Kinew said, suggesting the province could set aside money to put people to work. 

Manitoba Liberal Leader Dougald Lamont said the province shouldn't discount its own oil sector, which is being battered by sinking prices.

An economic dip of any kind would exacerbate the debt troubles of individuals and governments, Lamont said. He has called for mass debt forgiveness to give people a break. 

Tight-lipped on budget details

Neither Pallister nor Fielding were willing on Tuesday to tease additional contents of the budget. 

The already-announced cuts to the PST and payroll tax will be highlighted in the spending plan, along with $45 million on flood-prevention projects, as a recent mandate letter to a government minister revealed.

The Progressive Conservatives are expected to move toward fulfilling some of the campaign promises they made in last fall's election, such as cutting the PST from fees for preparing wills, as well as from home insurance and salon services over $50.

The province will again offer basket funding for the City of Winnipeg to use as it sees fit, Municipal Relations Minister Rochelle Squires told reporters on Monday. 

She said she spoke with Mayor Brian Bowman that day about their government's shared priorities of building "climate resiliency" and flood protection.