Financial forecast cuts highways capital expenditures for 2018
The second quarterly report on Manitoba’s finances shows that expenditures in the Highways Capital program are running behind budget. The provincial government released the second quarterly report on Wednesday.
It shows that the budget line for Highways and Airport Infrastructure is forecast to come in at $348 million for 2018-19; Budget 2018 put the Highways Capital program at $350 million (down from $502 budgeted in 2017) and almost $5 million for airport runways.
“We are hoping that Manitoba Infrastructure’s increased tendering this fall will see the full $350 million budgeted this year for highways expended,” MHCA President Chris Lorenc said.
Lorenc noted, however, that in both 2016-17 and 2017-18, the department under-expended that budget line, by a total $80 million.
The under-expenditure comes while Manitoba is forecast to pull in $11 million more in revenues, even though it cancelled its planned carbon tax, eliminating $143 million in expected revenues for a partial year.
Manitoba is seeing more money flow to the treasury from transfer payments and almost all of its own-source taxes, including income and corporation taxes. Most departments to date are tracking to spend less than was budgeted for 2018-19, but for Families, which is forecasted to spend $13 million more.
The province is forecasting its deficit will be cut to $518 million this year, $3 million lower than estimated in the spring budget.
The MHCA supports the province’s push to restore fiscal balance. However, Lorenc said, it can’t be all about deficit reduction, but must include a focus on economic growth.
Lorenc noted that the economic outlook for Manitoba indicates that the economy is slowing in its growth. This year, it is expected to grow by 1.8%, lower than national economic growth forecast of 2%. In 2017, Manitoba’s economy grew 2.5%.
“Investing in infrastructure, particularly core infrastructure, is an economic driver. Manitoba needs a strategy to increase investment in those infrastructure programs that are shown to be near-guaranteed to have higher returns to the GDP.
“Transportation infrastructure moves the needle – it can increase GDP by about $1.30 for every $1 invested. That’s an investment that pays dividends.”