Manitoba expects $577M more in equalization transfers beginning April 2023

The Manitoba government is forecast to see its equalization payments from the federal government jump by $577 million in the fiscal year that will start in April, new federal figures say.

The total of $3.5 billion represents a 19 per cent increase from the current year and is roughly double the amount Manitoba received when the Progressive Conservatives took office in 2016.

Finance Minister Cameron Friesen was not available for an interview Monday.A written statement from his office said the increase is a result of greater economic growth and higher natural resource prices in the richer provinces.

"Even with equalization, Manitoba's fiscal capacity is still below the capacity of those resource-rich provinces," the statement read.

Opposition NDP Leader Wab Kinew said the government should use the money to improve health care and reach a collective agreement with allied health professionals such as X-ray technicians and laboratory workers who have been without a contract for years.

"That would be one step that I'd like to see happen right away, along with other steps to invest in health care, given the need that's out there, but also this windfall," Kinew said Monday.

Equalization is funded entirely by the federal government and is aimed at letting poorer provinces offer similar levels of service at similar taxation levels as richer ones.

The money is given out based on a complex formula that measures the ability of each province to raise its own revenues. Quebec, Ontario, the three Maritime provinces and Manitoba are scheduled to receive equalization payments in the 2023-24 fiscal year.

The equalization increase for Manitoba is far bigger than any annual jump in recent memory, and comes at a time when the province has been racking up deficits every year since 2009, with the exception of a small $5-million surplus in 2019.

Equalization is separate from federal health and social services transfer payments, which all provinces receive.

The Manitoba government predicted a $202-million deficit for the current fiscal year back in September. Friesen is expected to provide an updated budget forecast this week.

The Progressive Conservatives have promised to balance the budget by 2028. They face an election set for Oct. 3, 2023.

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