Manitoba Premier Brian Pallister is calling on the federal government to establish an emergency credit agency, as the COVID-19 pandemic devastates the province’s finances.
He’s forecasting a $5-billion budget deficit this fiscal year alone, and says the province will likely need to borrow $10 billion — both in new and renewed borrowing.
“Let’s be frank: our revenue is down. Not a little, a lot — way down,” he said at a news conference Thursday afternoon at the Manitoba Legislature.
The borrowing will be necessary to sustain the province’s health-care system, Pallister said.
He wants Ottawa to establish a credit agency because the federal government can borrow money at a cheaper rate than the provinces — around one percentage point lower than his own government, he said.
Manitoba’s $800-million rainy-day fund — an emergency reserve intended for unforeseen expenses — is expected to be depleted in three months or less, Pallister said.
“Should the situation deteriorate further or faster, that savings fund will be used up even sooner.”
To help shore up the government’s finances, the premier said his government would hold off on implementing its own provincial carbon tax and making a planned cut to the PST, which was scheduled to come into effect on July 1.
“Those changes will have to wait right now,” he said. “We’re fighting a pandemic.”
The province was planning to use revenues from the flat $25 per tonne carbon tax to fund the one percentage point reduction in the provincial sales tax, which would have dropped the PST to six per cent.
The premier said he shared his proposal for an emergency credit agency with Deputy Prime Minister Chrystia Freeland. She told him she hadn’t heard the idea from any other province, Pallister said, but he thinks other provinces will latch on to the idea.
As of Thursday morning, Manitoba had 36 reported COVID-19 cases. One person with the illness remains in hospital in critical condition.
Earlier in the day, the province announced it is expanding the criteria for who can be tested for COVID-19.
All symptomatic health-care workers and people who live or work in remote communities or group settings — such as correctional facilities, shelters, long-term care or residential facilities, and remote work camps — can now be tested for the virus.
The province will continue to test people who show symptoms and who have travelled outside the province, been in close contact with a confirmed case, or worked with COVID-19 tests in a lab.
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