#1MOVING MANITOBA FORWARD Manitoba Economic and Borrowing Program Update May 2020 Manitoba#2MOVING MANITOBA FORWARD Stable Economy . Manitoba is the most stable provincial economy in Canada, with a diversified base where strong growth in one sector can offset challenges in others. Manitoba posted the second strongest provincial growth rate over the past decade, averaging 2.0% compared to 1.7% real GDP growth in Canada overall (2008-2018). Manitoba has the most stable and resilient labour market in Canada. Absorbing near record numbers of new working age population, while maintaining among the lowest unemployment rates in Canada. GDP by Industry Shares, 2018 Education Services. 5.8% Agriculture, Forestry and Fishing 3.7% Mining, Oil and Gas 2.7% Health and Social, Services 9.8% Public Administration 8.7% Accommodation, Food, Arts, Entertainment,. Information and Culture 5.2% Professional and. Scientific 3.5% Administration, Management of Companies and Other. Services 4.3% Real Estate, Rental and. Leasing 3.9% Utilities 3.4% Construction 7.8% Manufacturing 9.7% Wholesale 4.8% Retail 5.9% Transportation and Warehousing 6.7% Finance and Insurance 5.6% Goods-Producing Commercial Services Public Services 2 Manitoba#3MOVING MANITOBA FORWARD COVID-19 in Manitoba Canada 78,499 11 2,444 6,683 5 0 592 290 Number of total cases of COVID-19 30001 and higher 20001 to 30000 10001 to 20000 2001 to 10000 1001 to 2000 1 to 1000 43,627 23,384 Note: The total number includes publicly reported confirmed and probable cases. 260 0 Total Cases 300 250 200 150 100 50 27 1,043 120 13 Repatriated Travellers 3 Mar Case Status Apr Active Cases Recoveries Deaths Manitoba May#4MOVING MANITOBA FORWARD COVID-19: Impact on Manitoba's Forecasts 2020B 2020F 2021B 2021F 6.0 Real Gross Domestic Product 1.3 -5.5 4.0 1.5 5.0 2.0 Nominal Gross Domestic Product 3.3 -4.5 3.4 6.3 0.0 Consumer Price Index 1.9 1.0 1.9 1.9 -2.0 Employment 0.5 -2.9 0.8 2.9 -4.0 Unemployment Rate (%) 5.5 8.5 5.5 6.9 -6.0 Updated: May 12, 2020 Based on survey of nine economic forecasters used by Manitoba Finance -8.0 2013 2014 Manitoba Real GDP Growth 2013-2021F (%) -5.5 2015 2016 Manitoba 2017 2018 2019 2020F 2021F 5.0#5MOVING MANITOBA FORWARD COVID-19: Impact on Fiscal Policy: Current Estimates IMPACT ON REVENUE AND EXPENDITURE Low impact is ($1,033) million Low revenue and low expenditure Medium impact is ($2,592) million Medium revenue and medium expenditure High impact is ($4,784) million High revenue and high expenditure IMPACT ON NET INCOME Low impact is ($1,253) million Low revenue and low expenditure added to base net income of $(220) million Medium impact is ($2,812) million Medium revenue and medium expenditure added to base net income of $(220) million High impact is ($5,004) million High revenue and high expenditures added to base net income of $(220) million Economic Growth Impact* Lower economic growth results in lower government revenues Low ($M) (533) Low ($M) (1,033) (500) Health and Other Expenditures Medium (SM) (1,533) (1,000) High ($M) (2,533) (2,000) Medium ($M) (1,592) (2,092) (2,592) (3,592) High ($M) (2,784) (3,284) (3,784) (4,784) Net Income Under Various Scenarios For 2020/21 Lower economic growth results in lower government revenues Low ($M) Medium ($M) High ($M) May 12 2020* Low ($M) (753) (1,812) (3,004) (1,253) (2,312) (3,504) (500) Health and Other Expenditures Medium ($M) (1,753) (2,812) (4,004) (1,000) High ($M) (2,753) (3,812) (5,004) (2,000) * Low assumes nominal GDP growth that is 2.6% lower than Budget 2020 forecast Medium assumes nominal GDP growth that is 7.8% lower than Budget 2020 forecast High assumes nominal GDP growth that is 13.7% lower than Budget 2020 forecast 5 Manitoba#6MOVING MANITOBA FORWARD COVID-19: Impact on Highly Uncertain We are hopeful that Manitoba will have a "V" Many possible paths for the economic recovery Nominal GDP Growth Under Various Scenarios (%) shaped rebound, leading to full recovery in 2021/22. Further re-opening of our economy will drive fiscal impacts. Will there be subsequent outbreaks? Will consumer demand in MB and globally return to -Budget 2020 Low Impact -Medium Impact 8.0% 5.7% 3.0% 3.3% 3.0% 0.7% -High Impact 9.0% 5.9% 3.4% 3.3% pre-COVID levels, and how will the economy be restructured? How soon will there be effective vaccines? -2.0% -4.5% -7.0% This is not a structural fiscal issue -- this is akin to a natural disaster. -10.4% -12.0% 2018/2019 2019/2020 2020/2021 2021/2022 Manitoba#7MOVING MANITOBA FORWARD Manitoba Measures to Fight COVID-19 Manitoba Protection Plan • • Extended tax filing deadlines for PST Retail Sales Tax to June 22, 2020 Not charging interest or penalties for Manitoba Hydro, Centra Gas, Workers Compensation Board and Manitoba Public Insurance (MPI) Relax policy renewals and collections at MPI Not disconnecting customers of Manitoba Hydro/Centra Gas COVID-19 NOVEL CORONAVIRUS COVID-19 Screening Tool - Experiencing symptoms? Take a self-assessment Contact Health Links-Info Santé at 204-788-8200 or 1-888-315-9257 (toll-free) if you're experiencing symptoms of the 2019 novel coronavirus. Do not call 911 unless it is an emergency. Search for information on COVID-19 COVID-19 Updates SEARCH Information and Support for Manitobans Information and Support for Business • No interest on MBLL receivables from restaurants, bars, wine stores • Not charging interest on education property taxes Current situation cases news and test data in Manitoba Information for individuals. communities, schools, daycares Information and financial Support for businesses • • Removal of $75M in annual PST from residential and business properties effective July 1 New call centre to help businesses, non-profits and charities to connect with support programs; Workers Compensation Board is returning $37M surplus to employers, including $6.2M to health-care sector State of Emergency / Public Health Orders Manitoba gwenment declared a province-wide state of emergency. About COVID-19 Symptoms spread and treatment for coronavirus ICOVID-19 Flight/Event Exposure Information Flights or events with confirmed cares • $120M Manitoba Gap Protection Program for small businesses $120M Summer Student Recovery Plan $45M Manitoba Seniors Economic Recovery Assistance • $150M Hero Pay Program 7 Prepare and Prevent Community Screening Resources, Factsheets and Links Locations 2m Social distancing mousing.nisk of infection from COMID-19 Individuals who are directed by Health Links Info Sancto De ressed for COMID-19 Latest resources, factsheets and access links Manitoba#8MOVING MANITOBA FORWARD Borrowing Requirements New Cash Requirments $1.954 Billion $718 M Other Crowns & Org. Refunding Maturing Debt $3.696 Billion $1,534 M General Programs $769 M Capital Investments $2,629 M Manitoba Hydro ✓ Budget 2020 was tabled on March 19, 2020. ✓ Expected borrowing requirements were C$5.65 billion. Revised requirements are $9.60 billion. ✓ Planned funding through both domestic and international capital markets. ✓ To date, we have funded $5.1 billion, 53.2% of our needs for fiscal 2020/21. Manitoba#9MOVING MANITOBA FORWARD Last 5 Years Avg. Funding Sources CAD MTN, 8% CAD FRN, CAD Public Debentures, 56% 2% USD Global, 16% AUD ✓ CHF EUR ✓ CAD Debentures, GBP ✔ Other Int'l Markets, 18% Private Placements 41% HKD JPY ✓ NZD ✓ SEK ✓ 9 Post-Budget CAD MTN Private Placements 17% CAD Debentures, Public Placements 19% CHF✓ International 14% EUR ✓ T-Bills 9% Manitoba#10MOVING MANITOBA FORWARD (C$ Billion) 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Debt Maturity Profile As of April 28, 2020. Excludes short-term debt and other liabilities, and the incremental impact of future financing. Net of sinking fund maturities. Manitoba 10#11MOVING MANITOBA FORWARD Cash Reserves Manitoba Liquidity Profile Provincial Cash Balance Rainy Day Fund Canada T-Bills, Repo's, Provincial Paper & BA's CANHOU's & Provincial FRN's Sinking Fund Provincial Bonds Authorized Issuance Treasury Bills Promissory Notes Revolving Credit Facility Amount 3,900,000,000 1,000,000,000 504,000,000 $5,404,000,000 * forecasted May 31, 2020 balance 11 2,371,000,000 800,000,000 $3,171,000,000 $1,100,000,000 Outstanding Amount 2,730,000,000 75,000,000 Available Amount 1,170,000,000 925,000,000 504,000,000 $2,805,000,000 $2,599,000,000 Manitoba#12MOVING MANITOBA FORWARD Credit Ratings Rating Agency Rating Outlook As of Date S&P A+ Stable May 2020 Moody's Aa2 Stable November 2019 DBRS A (High) Stable May 2020 S&P Global Ratings - May 15, 2020 - revised its outlook on the Province of Manitoba to stable from positive. Moody's - August 8, 2019 - affirmed rating with stable outlook DBRS - May 28, 2020 - confirms rating with stable trend Manitoba 12#13MOVING MANITOBA FORWARD Contact Information Websites: Manitoba COVID-19 Updates: https://manitoba.ca/covid19/updates/index.html#cases Contact: Don Delisle, CPA, CA Director, Capital Markets Manitoba Finance, Treasury Division (204) 945-5404 [email protected] Disclosure Statement This presentation was compiled by the Manitoba Department of Finance, Treasury Division and Treasury Board Secretariat. The information in this presentation is for general information purposes only and does not constitute an offer to sell or a solicitation of offers to purchase securities. Certain forward looking information or forward looking statements have been included in this presentation for such general information purposes. These statements are based on the Province of Manitoba's current estimates or projections which the Province believes are reasonable. Such statements are not guarantees of future performance, and accordingly, you should not place undue reliance on them. Forward looking information or statements involve known and unknown risks, uncertainties and other factors which could cause the state of the Province's economy to differ materially from the forecasts and economic outlook expressed or implied by any forward looking information or statements. Forward looking information or statements speak only as of the date they are made. Manitoba undertakes no obligation to update any forward looking information or statements to reflect new information, future events or otherwise, except as may be required under applicable law. While the information in this presentation, when posted or released, was believed to be reliable as of its date, no warranty is made as to the accuracy or completeness of this document or the information it contains as of any other date than the date it was posted or released. 13 Manitoba