#1HISTORIC HELP FOR MANITOBANS 2023/24 First Quarter Report Fiscal and Economic Update July 2023 N Manitoba#2Budget 2023 Update Budget 2023 Focuses on: Historic Help for Manitobans Manitoba Safer Streets Healing Health Care Stronger Communities Budget 2023 is investing nearly $2-billion in new funding to provide historic help for Manitobans with across the board funding increases in all 19 government departments. Opportunities Ahead 3#3Q1 2023/24 Forecast Update Manitoba Fiscal position unchanged in the First Quarter of 2023/24 First quarter deficit forecast on budget at $363-million • No change in summary net debt 2023/24 First Quarter Fiscal Update Forecast Budget Change (Millions of Dollars) Revenue 21,534 21,514 Expense 21,897 21,877 Net Income (Loss) (363) (363) Summary Net Debt 31,057 31,057 Net Debt to GDP 34.6% 34.6% 20 20 20 I 23#4Q1 2023/24 Forecast Explained . • Revenues and Expenditures are both forecast to increase by $20-million: . One-time increase in federal transfers for the Labour Market Transfer Agreement with corresponding increase in expenditures No change in deficit forecast Risk of Hydro not meeting budgeted net income mitigated by $200-million revenue contingency Manitoba#5Manitoba Historic Help for Manitobans Providing historic help to make life more affordable for Manitobans was the focus of Budget 2023 and remains of critical importance to our government. We've implemented several measures to help you keep more of your money in your pocket: ✓ increased Basic Personal Amount to $15,000, saving the average two-income family more than $1,000 this year compared to 2022 ✓ adjusted Manitoba tax bracket thresholds to $47,000 and $100,000, saving the average two-income family more than $1,250 in 2024 when combined with the Basic Personal Amount ✓ increased the School Tax Rebate for residential and farm properties to 50%, saving the average homeowner $774 this year ✓ reducing payments charged to Manitoba Hydro, saving Manitoba Hydro and rate payers more than $4-billion over the next 20 years 23#6Safer Streets We've taken a balanced approach to crime that addresses root causes like homelessness, addiction challenges and mental health issues, while also getting tough on violent crime and violent criminals with the following actions: ✓ adding 29 Crown attorneys to prosecute violent criminals ✓ our two-year, $51.8-million Violent Crime Strategy is enhancing policing and public safety initiatives to crack down on crime ✓ investing nearly $3.4-million to develop 400 new community-based social housing units this year, through rent supplement agreements ✓ increasing funding for overnight shelters ✓ funding 1,648 new addictions treatment spaces – surpassing target of 1,000 Manitoba N#7Manitoba Healing Health Care We're making historic investments to heal health care for Manitobans: ✓ significant reduction in pandemic-induced backlogs, allowing Diagnostic and Surgical Recovery Task Force to shift focus to building health-system capacity ✓ implemented 12 initiatives under the Health Human Resource Action Plan to support retention, training and recruitment with more initiatives coming - 1,500 new hires to date ✓ constructing several capital projects across the province as part of the Clinical and Preventative Services Plan ✓ advancing six personal care home projects that will add approximately 670 beds to planning stage#8Manitoba Stronger Communities We're investing hundreds of millions of dollars to renew vital infrastructure and support communities including: ✓ over 31,000 Manitoba children now have access to $10-a-day child care - achieved 3 years ahead of target ✓ 60% of the 43 actions in the five-year K to 12 Education Action Plan are already completed or underway ✓ adding one million square feet of learning space through capital projects ✓ expanding child-care spaces 2 ✓ largest single investment in Community Living disABILITY services since the program's inception#9Manitoba Opportunities Ahead We're making historic investments in infrastructure and other initiatives that will transform Manitoba into a global trade and transportation corridor: ✓ access-controlled perimeter highway freeway system ✓ investing in national trade corridors ✓ increased the payroll tax exemption and the reduced rate threshold ✓ launched suite of programs under the new Sustainable Canadian Agricultural Partnership ✓ supporting businesses through launch of new Communities Economic Development Fund Business Loan Program, $20-million investment to support economic development and investment attraction and $10-million in the Labour Market Fund to deliver new and enhanced training for high demand areas of the labour market 3#10Manitoba Manitoba Economy Surpassing Expectations in 2023 ✓ more Manitobans working than ever before - averaging over 690,000 jobs in 2023 ✓ full-time employment is up 4.2% in the first half of 2023, the highest among provinces ✓ Manitoba has the lowest unemployment rate in Canada at 4.3% in June 2023 ✓ Manitobans spent a record $26.4-billion on retail sales in 2022, up 8.6%, third highest among provinces. Sales are up another 5.5% through May 2023 ✓ manufacturing sales are up 10.4% in 2023, highest among provinces ✓ Manitoba farmers cash receipts reached a $9.7-billion milestone in 2022 and have further increased by 17.2% in the first quarter of 2023, third highest among provinces ✓ international exports are up 18.7% in 2023, second highest among provinces ✓ labour income is up 7.3% in 2023, third highest among provinces 3#11Manitoba Manitoba Economic Outlook at a Glance Despite higher interest rates, the Manitoba economy showed unexpectedly solid gains in the first half of 2023, with sales from retail, wholesale and manufacturing sectors continuing to increase at a steady pace. Persistently-high inflation combined with ongoing increases in interest rates are expected to slow growth in the second half of 2023 and into 2024. Budget 2023 2023F Q1 Report 2023F Budget 2023 2024F Q1 Report 2024F Gross Domestic Product Real 0.7 1.7 1.1 0.9 Nominal 2.2 3.9 3.0 2.7 Consumer Price Index 3.8 3.9 2.2 2.3 Employment 0.4 1.8 0.8 0.8 Unemployment Rate (%) 5.4 4.9 5.9 5.4 Population 1.0 1.6 1.0 1.3 per cent change unless otherwise noted Source: Manitoba Finance Survey of Economic Forecasts#12Economic Update Manitoba Economic Indicators, Year-to-date Growth, 2023 Manitoba Avg. Weekly Earnings April 2023 Employment Jun 2023 Building Permits May 2023 Manufacturing Sales May 2023 Retail Sales May 2023 4.9% 2.1% -7.7% 10.4% 5.5% 1 CPI Jun 2023 4.9% fo 1 Farm Cash Receipts Q1 2023 International Exports May 2023 Housing Starts Q1 2023 New Motor Vehicle Sales May 2023 17.2% 18.7% -10.2% For up-to-date economic information, please visit the Manitoba Finance's Economic Recovery Dashboard. For further detail on Budget 2023 initiatives that are underway, please visit 2023/24 First Quarter Report Backgrounder. 3.9% Source: Statistics Canada 23