WINNIPEG, Manitoba (Reuters) - The western Canadian province of Manitoba aims to whittle down its fiscal deficit to C$521 million in 2018-19, it said on Monday, as Premier Brian Pallister’s Progressive Conservatives edge the province closer to balanced budgets while trimming taxes.
Manitoba has run deficits for a decade, after a major flood and economic downturn blew a hole in its finances. Its high debtload has led to downgrades of the province’s credit rating.
Manitoba expects to post a C$726 million ($565.64 million) deficit for the current 2017-18 fiscal year, which ends on March 31.
Even while it is running deficits, Pallister’s right-leaning PCs said they would cut personal income taxes by raising the tax-free exemption by C$2,020 per person over two years. Manitoba will also boost the small business income tax threshold to C$500,000 from the current level of C$450,000.
The PC government has promised to balance the budget by 2024, requiring a second term in office.
“We believe we are making progress in a way that we think people will find reasonable over time,” Finance Minister Cameron Friesen told reporters. “... Have we totally landed the plane yet? No we have not.”
Manitoba’s economy depends on farming, manufacturing and mining. Its pace of economic growth is expected to slow in the next few years, partly due to the closure of several mines, think-tank Conference Board of Canada said in a February report.
The government projected spending at C$17.4 billion and revenue of C$16.8 billion, up 2.2 and 4.3 percent respectively from last year’s budget. The new budget includes contingency funds for in-year adjustments.
The province’s net debt was forecast to reach C$24 billion on March 31, and rise to C$25 billion by the same date in 2019.
($1 = 1.2835 Canadian dollars)
Reporting by Rod Nickel; Editing by Denny Thomas, Sandra Maler and Susan Thomas