The Manitoba government is calling on Ottawa to create an emergency credit agency to help all provinces borrow the money they need as the COVID-19 pandemic wreaks havoc on the economy, Manitoba Premier Brian Pallister said at a news conference on Thursday.
For his province, he’s now predicting a $5-billion budget deficit, 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 Thursday afternoon.
A federal credit agency is needed because the federal government can borrow money at a cheaper rate than the provinces — around one percentage point lower than his own government, Pallister said.
Borrowing will be necessary to sustain the province’s health-care system, he said.
He expects Manitoba’s $800-million rainy-day fund — an emergency reserve intended for unforeseen expenses — to be depleted in three months or less.
“Should the situation deteriorate further or faster, that savings fund will be used up even sooner,” Pallister said.
To help shore up the government’s finances, Pallister said his government would hold off on implementing its own provincial carbon tax and making a planned cut to the PST.
“Those changes will have to wait right now,” he said. “We’re fighting a pandemic.”
The government was planning to use the 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.
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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