Canadian province Manitoba cuts deficit forecast to C$2.9 billion

WINNIPEG, Manitoba (Reuters) - The Canadian province of Manitoba forecast on Tuesday a fiscal year deficit of C$2.9 billion ($2.13 billion), down from an earlier estimate of C$5 billion, as the spread of coronavirus infections remains low.

The 2020-21 deficit could still reach C$5 billion if the economic downturn is prolonged or infections accelerate, Premier Brian Pallister said.

Manitoba, whose economy is based on manufacturing, farming and mining, has had low daily case counts of coronavirus infections compared with most provinces. Much of the province of 1.4 million people is sparsely populated outside of its capital Winnipeg, which accounts for about half the population.

Its economy has largely reopened after lockdowns.

“What’s changed is Manitobans have responded arguably better than citizens anywhere else in the world,” Pallister said, referring to public safety measures. “We’ve earned the right to be optimistic now.”

The province has 18 active coronavirus cases.

Pallister said he would not consider raising the provincial sales tax to narrow the deficit.

Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Richard Chang