View From the Legislature

It may have been lost in all the noise of the recent election campaign, but it is worth recalling that on the Friday before the provincial election, the Manitoba Auditor (an independent officer of the Legislative Assembly), released the final numbers on the 2022-23 provincial finances.

This is what is known as the fourth quarter report, and it closes the books on the previous financial year of the province and gives the final fiscal result. The prior three quarterly reports provide projections on how the year will end, but the fourth quarter result provides the final tally. The independent Manitoba Auditor was obligated, by law, to release the fourth quarter result before the end of September, which is why it was revealed during the election campaign.

What the results showed was that the Manitoba budget was not only balanced for the 2022-23 year, but there was a $270 million surplus. This is the first time that the budget has been in the black since the global pandemic. Importantly, it is a dramatic improvement from the $548 million shortfall that was projected when the budget was introduced in spring of 2022.

This is good news for Manitobans as it shows that, despite record spending on healthcare, education and providing significant tax reductions, the budget was able to improve. And the improvement came primarily because the Manitoba economy has been performing very well over the past year.

Much of the improvement came from the fact that Manitoba has the lowest unemployment rate in the country and more Manitobans are working than ever before. This resulted in over $800 million of higher-than-expected revenues from corporate and personal income taxes. Also, Manitoba Crown Corporations performed well, including Manitoba Hydro which contributed nearly $500 million to the provincial coffers.

This is only the second time in the past few years that Manitoba has been able to balance the budget. The last surplus budget was in the fiscal year ending March 2020 when a $9 million surplus was recorded. The pandemic threw all provincial economies off of their financial projections. How quickly the Manitoba economy has been able to rebound is both a testament to the resilience of the Manitoba economy and how focused the government over the past few years has been on encouraging economic growth and development.

For the new NDP government, this means that they take over an enviable financial position. But despite the significant surplus that was achieved last year, it will take a government that is disciplined to ensure that Manitoba does not slide back into the cycle of growing deficits and increasing taxes as was the hallmark of the last NDP government.

Manitoba’s NDP campaigned on balancing the budget and not increasing taxes. With the results from the last fiscal year, when taxes were lowered, spending was increased in priority areas and a surplus was realized, there isn’t any excuse for the new government not to be able to keep that promise.