The only way out is to grow the economy
As the COVID-19 pandemic hit, economies around the world slowed to a crawl, shutting down everything from airports to daycares.
Parliaments, including Manitoba’s Legislature, moved quickly to adapt. Manitoba’s political and public health leaders gave daily news briefings, responding to a growing list of COVID-related issues. Locally, MLAs have worked around the clock caring for constituents and listening to their concerns
Manitoba’s rainy day fund, which was decimated under the former government and restored to $880 million over the last four years, gave our province a much-needed fiscal cushion. This cushion helped with hundreds of millions of dollars in necessary purchases for items such as personal protective equipment for front-line workers, COVID-19 testing kits, digital technology to replace face-to-face doctor’s visits, and mental health support.
An additional $480 million in loans, payment deferral options, rebates, credits and incentives were announced — all while tax revenue plummeted as people stayed home and spent less. COVID-19 has cost jobs and closed businesses. At the same time, Manitoba is facing a GDP decrease of five per cent for 2020 and a simultaneous debt servicing cost increase of roughly $70 million a year in the future. Similar realities are faced by governments worldwide.
So how do we move forward here in Manitoba? We grow.
The best way to combat the economic fallout of COVID-19 is to grow the economy, and that is exactly what our government will do through the RestartMB plan. Nearly three-quarters-of-a-billion dollars will be invested in infrastructure and road projects to connect communities and create jobs. A number of new incentives have been introduced to hire new employees and students. And we are encouraging entrepreneurs to choose Manitoba, one of the most successful jurisdictions anywhere in the fight against COVID, as the place to start or grow their businesses.
Manitoba is well-positioned to recover from the economic effects of COVID-19, and this is not by accident. The combination of our strong public health care system and prudent, responsible management of our finances have once again made Manitoba a home of hope.
The measures our government has undertaken over the last four years have put Manitoba in a stronger, more stable position to weather the present storm. Standard & Poor’s credit-rating agency recognized this in May 2020 when it stated: “Leading up to the current fiscal year, the (Manitoba) government had laid out its plan to restore the province to fiscal balance and had demonstrated an ability to effectively manage its finances to meet or exceed its budget targets in the past several years.”
The ability to prudently and effectively manage public finances has never been more important.
The storms we face together are global in nature but we must take responsibility for the fiscal health of our province today and for the generations that will follow us. The economic recovery from COVID-19 will take years and the sound fiscal management of governments such as ours is more important than ever.