Premier wants federal government to create agency to save provinces on borrowing costs

Federal government can borrow money for as much as one per cent less than provinces due to better credit rating

Manitoba Premier Brian Pallister called on the federal government March 26 to create a centralized agency to enable provinces to borrow money for less as their revenues decline and health care expenses rise as a result of the COVID19 pandemic.

“Our revenue is down, not a little, a lot. Way down,” said Pallister at a press conference, noting that Manitoba’s rainy day fund, though it is close to $900 million, is only enough for three months or less of operations due to lost revenue and increased expenditures resulting from the pandemic. “That rainy day money will get used up.”

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A planned reduction of the provincial sales tax, from seven per cent to six per cent, scheduled for July 1, will not go ahead this year as a result of the pandemic, Pallister said.

The federal government’s credit rating allows it to borrow money for as much as one percentage point less than provinces can, the premier says. 

“They’ll pay a lot less to get that money,” he said. “If we can borrow at one per cent less then we’re going to have the funds available for health care.”

Health care is the biggest expense provinces have, Pallister said in a press release, accounting for nearly half of most provincial budgets.

“Different provinces are going to run into liquidity problems,” Pallister said. “The reality is our economies have slowed down because people have to stay away from work.”

Manitoba NDP leader Wab Kinew said in emailed statement that Pallister should be making sure Manitobans have the health care resources and other supports necessary to cope with the novel coronavirus pandemic first and worrying about the funding of them later.

“Manitobans need help today - front line health care workers need more supports, regular workers need help making ends meet, and businesses need help meeting payroll,” said Kinew. “Yet there was no announcement of any new program to help struggling Manitobans today. Funding our health care system properly has never been more important than right now - and Mr. Pallister's history of underfunding health care and cutting ICU [intensive care unit] beds have forced us to play catch up in the middle of a pandemic.”

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