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WINNIPEG — The Manitoba government is keeping a tight leash on spending and delaying some promised tax cuts as it prepares for the economic effects of a stock-market plunge and COVID-19.
The Progressive Conservative budget released Thursday follows through on some tax-cut promises from the election campaign last year when the Tories won their second-straight mandate.
Probate fees on deceased person's estates are to be eliminated July 1. Vehicle registration costs are to be cut 10 per cent on the same day. And the provincial sales tax is to be removed from income-tax preparation services starting Oct. 1.
But two other election promises — removing the sales tax from home insurance and salon services — will wait until next year, Finance Minister Scott Fielding said.
A prime focus of the 2020-21 budget is preparing for emergencies. The government is putting another $300 million into its rainy-day fund and doubling to $100 million the amount it sets aside for emergencies.
"Coronavirus is obviously something we're concerned about … but we have a plan to address this," Fielding said at an embargoed news conference on March 11.
"We think we have a lot of contingencies built into the budget"
Stalling measures by Opposition New Democrats in the legislature delayed the release of the budget for eight days.
The only significant tax increase is on tobacco that works out to $1 per carton, starting July 1. It's aimed at offsetting a previously announced cut in the provincial sales tax, so that the cost of smoking remains the same.
The budget also keeps annual spending increases in areas such as health and family services below two per cent.
Family services funding, which includes child welfare, is to be relatively flat. And the government has a five-year plan to get out of owning public housing.
"We're moving more toward a regulatory model. We want to work with non-profits to deliver housing solutions for Manitobans," Fielding said.
The government already provides subsidies for people who live in private housing, and the change could free up long wait times, he added.
The budget forecasts a deficit of $220 million, down from $325 million in the current fiscal year that ends March 31. The Tories have promised to balance the budget before the next election slated for 2023.
On Thursday, Fielding released some updated financial projections, given the possible impact of COVID-19.
At this early stage, he estimates health costs throughout the fiscal year could rise between $50 million and $200 million. Reduced economic growth could lower government revenues by anywhere from $160 million to $682 million.
"The steps our government has taken over the past four years to manage provincial finances more responsibly means that we are better positioned to respond to this and future emergencies and withstand the ongoing period of economic uncertainty," Fielding said in a statement.
This report by The Canadian Press was first published March 19, 2020