On March 19, the Government of Manitoba delivered its budget amidst the COVID-19 pandemic – and eight days later than planned. The opposition New Democratic Party had used various tactics to stall house proceedings, in order to prevent certain pieces of legislation from being introduced.
Jesse Hajer, assistant professor of economics at the University of Manitoba, believes this budget should have been delayed, but for a different reason.
“The COVID-19 pandemic completely changes the underlying economic fundamentals that the budget was drafted upon,” he says in an email to The Uniter, adding that this situation “necessitates rethinking and restructuring the spending priorities of the Manitoba government.
“COVID-19 will have demand and likely supply effects on the economy that will reduce revenues.”
The provincial government provided a supplementary document to the budget that addresses the COVID-19 situation. It indicates that additional money will be added to a rainy-day fund and an emergency expenditures fund. Furthermore, it projects that the province’s deficit for the 2020 to 2021 fiscal year could increase from $220 million to as much as $900 million.
For Hajer, this is a “status quo budget,” which does “very little” to help the current situation.
“What is important to watch is how the government will respond in the coming days and weeks, not just with respect to tax and spending, but also with respect to policies,” he adds.
Among the items in this budget are changes to government spending on post-secondary education. Scholarships, loans and bursaries for post-secondary students have increased by approximately $14 million. Grant assistance has been reduced by approximately $7.5 million.
John Neufeld, a spokesperson for the provincial Department of Economic Development and Training (which oversees post-secondary education), says in a statement to The Uniter that this budget promotes “affordability, accessibility and certainty for Manitoba’s students.”
“We are balancing affordability and access for our post-secondary students with the need for colleges and universities to be financially sustainable in the long-term – all while making sure that programs are responsive to emerging industry and business needs,” he says.
Hajer says the cuts to grants to post-secondary institutions “will lead them (to) likely increase tuition again at the maximum allowable rate of inflation plus 5 per cent.
“The research I’ve looked at in this area shows that the ‘sticker shock’ of high tuition can deter students from attending, even with offsetting financial aid.”
Overall, total spending for the Department of Economic Development and Training increased by 1.6 per cent from last year. The operating grant for post-secondary institutions was reduced by 1 per cent.
In a statement, Dr. Annette Trimbee, president and vice-chancellor of the University of Winnipeg, says she “recognizes that the provincial government has limited resources and is now dealing with a major public health challenge that is causing great concern for our economy.
“As one of the most efficiently run universities in the country, the U of W will continue to prioritize investing in a strong student experience, as well as academic excellence in teaching and research.”
Published in Volume 74, Number 23 of The Uniter (March 26, 2020)