Premier Wab Kinew’s economic horse got a little weaker in December.
Statistics Canada reported Friday Manitoba lost 7,200 jobs last month and saw its unemployment rate jump to 6.2 per cent from 5.8 per cent.
Manitoba was the only province in Canada with an employment decline in December. It wasn’t a great way to start the year.
An employment decline of any kind right now is bad news, writes Tom Brodbeck. Not only is there is a loss of taxation revenue, it puts an additional strain it puts on government support services, such as income assistance and rent support.
Kinew frequently repeats the mantra that Manitoba needs a strong “economic horse” to “pull the social cart.” Like all provinces, Manitoba relies on good paying jobs and strong economic output to produce the tax revenues government needs to pay for front-line services in areas such as health care, education and justice and to fund municipalities.
Employment is just one aspect of measuring the strength of the provincial economy, but it’s an important one. December was the second month out of the previous three where Manitoba saw a drop in employment.
It’s too soon to hit the panic button — employment figures could very well take a turn for the better in January. But it’s not the way the NDP government, which is grappling with a $1.3-billion deficit in 2024-25, wanted to start the new year.
Fortunately, most of the job losses in December were part-time positions. That’s not to diminish the importance of part-time work, which many households rely on to pay the bills and which governments need to help generate income taxes and consumption taxes. But it is not as bad as losing full-time jobs.
Of the 7,200 jobs lost in December, about 7,000 were part-time positions. It was the second month in the fourth quarter of 2024 that Manitoba lost jobs. The province saw a net employment increase of 6,600 in November (all full-time positions as there was a decline in part-time jobs), following an employment decline of 1,300 the previous month.
It’s part of the reason the provincial government, in its second-quarter financial report released last month, reduced its income tax projection for 2024-25 by $39 million. It also downgraded real economic growth for Manitoba in 2025 to 1.6 per cent from 1.9 per cent in the 2024 budget.
Manitoba still has one of the lowest unemployment rates in the country at 6.2 per cent (fourth lowest among the provinces). The national rate was 6.7 per cent in December. And overall, the province saw a net increase of 13,300 jobs from December 2023 to December 2024 (although part of that is from population growth of 41,200, which contributed to a labour force increase of 29,800 during that period).
Still, for a province running such a deep deficit, an employment decline of any kind right now is bad news, not only because of the loss of taxation revenue but also because of the additional strain it puts on government support services, such as income assistance and rent support.
It doesn’t help that both the previous Progressive Conservative government and the NDP government cut taxes by hundreds of millions of dollars, which has had a devastating impact on the provincial treasury.
Growing the economy and creating net new jobs is the only way the province will eliminate the deficit over time.
Growing the economy and creating net new jobs is the only way the province will eliminate the deficit over time. It’s unlikely there will be any additional support from the federal government in the form of transfer payments in the short term, beyond the regular incremental increases. There could even be a decrease in equalization payments for Manitoba if the Conservatives win the next federal election (which they almost certainly will).
Conservative Leader Pierre Poilievre has indicated in the past he wants to make the equalization formula “fairer” for all provinces, including Alberta (which does not receive equalization).
All of which means the NDP government will have to do far more to encourage private sector growth in the province through strategic investments in key industries. Last week’s announcement that the province is pouring $17 million into the aerospace sector (an $8-million grant and a $9-million loan through Magellan Aerospace) is a good example of the kind of investments that are needed. But so much more is required, including finding ways to provide startup companies with much-needed venture capital.
Education and job specific training will also be critical to economic growth, as there are still severe shortages of skilled workers in many industries.
Strengthening the economic horse that pulls the social cart means making smart decisions in government that contribute to economic growth. So far, Manitobans haven’t seen much of that from the Kinew government, which has been focused primarily on gimmicky policies, like bringing in a fuel tax holiday and proposing to freeze Manitoba Hydro rates.
That will have to change if the province wants to grow the economy and return to a balanced budget.
tom.brodbeck@freepress.mb.ca
Tom Brodbeck
Columnist
Tom Brodbeck is a columnist with the Free Press and has over 30 years experience in print media. He joined the Free Press in 2019. Born and raised in Montreal, Tom graduated from the University of Manitoba in 1993 with a Bachelor of Arts degree in economics and commerce. Read more about Tom.
Tom provides commentary and analysis on political and related issues at the municipal, provincial and federal level. His columns are built on research and coverage of local events. The Free Press’s editing team reviews Tom’s columns before they are posted online or published in print – part of the Free Press’s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.
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