October 2020

PROVINCE OF MANITOBA

Manitoba Economic and Borrowing Program Update

PROTECTING MANITOBAN’S AGENDA

Public Accounts: Key Fiscal Results for 2019/20

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Province of Manitoba reported a surplus net income for 2019/20

Revenues up by $613 M compared to prior year driven by:Strong growth in income tax, own source revenues & major federal transfers

Expenses up by $422 M compared to prior year mainly due to:Higher health and education expenses partially offset by savings in other areas and further clean up of write-down and other accounting provisions.

Progress to Balanced Budget Over Four Years

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Surplus was achieved through prudent fiscal management and responsibly aligning public service demands with revenue growth:

• Spending $3.4 billion more on Health, Education and Families

• Improving efficiencies and accounting practices across all government reporting entities and writing off improper practices

• Supporting growth initiatives:

Increased tax free small business income limit to

$500,000 - saving $7 million annually

Cut sales tax to 7% - saving $325 million annually

Indexed tax brackets and the basic personal amount –

saving over $75 million by 2020 and growing

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Agriculture, Forestry and Fishing 5.2%

Mining, Oil and Gas3.0%

Utilities 3.4%

Construction 7.6%

Manufacturing 9.7%

Wholesale4.8%

Retail 5.5%

Transportation and Warehousing 6.6%

Finance and Insurance5.4%

Real Estate, Rental and Leasing 3.9%

Administration, Management of

Companies and Other Services 3.9%

Professional and Scientific 3.3%

Accommodation, Food, Arts, Entertainment,

Information and Culture5.5%

Public Administration8.0%

Health and Social Services 9.1%

Education Services5.8%

GDP by Industry Shares, 2019

Commercial Services

Goods-Producing

Public Services

• Manitoba is the most stable provincial economy in Canada, with a diversified industrial base where strong growth in one sector can offset challenges in others.

• 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 rate in Canada.

• Centrally located in North America with a

comprehensive transportation and

communication network.

• Population: 1.4 million, one of the fastest

growing provinces in Canada

Stable Economy

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Private Sector Surge in Capital Investments

423 459

432 471

528 509

570

737

1,135

-

200

400

600

800

1,000

1,200

Record level of private sector capital investment since

2015.

Manitoba has led the nation in manufacturing capital

spending since 2015, and increasing to over $1.1

billion in 2019

o HyLife expanded its integrated pork production and

processing capacity.

o Winnipeg based Canada Goose expanded by investing in

a new factory.

o Roquette is currently building the world’s largest pea-

protein processing facility.

o Simplot is doubling its food processing capacity for

frozen french fries and formed potatoes.

o Maple Leaf Food and McCain Foods are investing in

capacity expansion.

Capital Investment In Manufacturing, 2011-2019 (In Millions of Dollars)

COVID-19: Manitoba’s Position

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Rapid response with investments in personal protective equipment (PPE) and other health care equipment related to COVID-19 efforts such as ventilators and testing swabs.

Manitoba’s per capita and % share of GDP pandemic-related spending in 2020 to be the third highest in Canada, after only Quebec and Ontario (the two hardest hit provinces).

COVID-19: Significant Investment in Protection

Projections for 2020/21 show a deficit of $2,938 million compared to a deficit of $220 million in the Budget:

Revenue is projected to be $1,560 million lower than Budget as a result of the economic shutdown related to COVID-19

Expenses are projected to be over budget by $1,158 million, reflecting the additional costs related to the Manitoba Protection Plan for COVID-19 and the programs announced more recently as part of #RestartMB programs.

COVID-19: Impact on Fiscal Situation

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COVID-19: Impact on Manitoba's Economy

• Economic growth is significantly impacted by COVID-19 with multiple paths for post-2020 recovery

• GDP forecast for 2020 is a 5.2% contraction and for 2021 growth of 4.8%

• Economic uncertainty remains extremely elevated going forward

2020B 2020F 2021B 2021F

Real Gross Domestic Product 1.3 -5.2 1.5 4.8

Nominal Gross Domestic Product

3.3 -3.8 3.4 6.0

Consumer Price Index 1.9 0.6 1.9 1.6

Employment 0.5 -3.8 0.8 3.9

Unemployment Rate (%) 5.5 8.3 5.5 6.7

Updated: September 03, 2020Based on survey of nine economic forecasters used by Manitoba Finance

COVID-19: Manitoba economy is performing relatively

well on many key economic indicators in 2020

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Economic Performance Indicators, Relative to Canadian Provinces:

• Real GDP Forecast growth in 2020: Third Highest

• Unemployment Rate average so far in 2020: Lowest

• Private Sector Employment year-to-date growth: Second Highest

• Merchandise Exports year-to-date growth: Second Highest

• Wholesale Trade sales year-to-date growth: Second Highest

• Total Employment year-to-date growth Third Highest

• Retail Trade sales year-to-date growth: Third Highest

• Non-residential Buildings Investment year-to-date growth: Third Highest

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COVID-19: Manitoba’s Priorities

Protecting Health Care

• Investing in PPE• Securing more testing sites/capacity• New income support program for

Manitobans with disabilities• Capital upgrades to enhance the

health and safety in personal care homes

Protecting Education & Child Care

• Keeping schools open, and children safe• Access to remote and in-class learning• 20 new schools• Increase of $1.6 billion of funding over 4

years• Providing affordable childcare

Protecting Manitoba’s Future

• 3-part plan focusing on Manitoba’s financial, climate, and energy future

• Two-term balanced budget plan• Clean energy advantage with Manitoba Hydro• New initiatives to reduce carbon emissions

across all sectors

Protecting Jobs

• Support workers, students, and businesses

• Labour market training• Creating an independent, private

sector-led economic development agency to attract investment

• Modernizing apprenticeship training• Updating provincial tourism strategy

Protecting Incomes

• Lower taxes• Amending work leave provisions• Lower rates from MPI• Less expensive private liquor retail• Continue $2,020 Tax Rollback

97.4% of electricity generation is hydro, 2.5% is

wind and 0.1% is thermal.

Roughly 1/4 of the electricity generated is exported

outside of Manitoba (U.S., Canada).

Manitoba Hydro’s current generation capacity is

5,615 MW, with an additional 5,110 MW more of

potential generation identified.

Manitoba Hydro is currently investing in a major

generation project and has put into service a major

transmission project.

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20 Retail Price of Electricity

(Cents/kWh $C)

NORTH AMERICA’S CLEAN ENERGY LEADER

KeeyaskHydro Generating Station Project

Design Capacity:

695 MW

Anticipated First Unit in Service Date:

Fall 2020

Anticipated Cost: $8.7B

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Borrowing Requirements

Budget 2020 was tabled on March 19, 2020.

Expected borrowing requirements were C$5.65 billion. Revised requirements are $7.8 billion.

Planned funding through both domestic and international capital markets.

To date, we have funded $6.9 billion, 92.5% of our needs for fiscal 2020/21

• 82% when including $1.0 billion in pre-funding for 21.22

$1,534 M General Programs

$718 M Other Crowns & Org.

$769 M Capital Investments

Refunding

Maturing Debt

$3.0 billion

$2,629 M Manitoba Hydro

Refunding Maturing Debt$3.696 Billion

New Cash Requirments$1.954 Billion

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Manitoba Liquidity Profile

Authorized Issuance

Amount

Outstanding

Amount

Available

Amount

Treasury Bills 3,900,000,000 2,430,000,000 1,470,000,000

Promissory Notes 1,000,000,000 75,000,000 925,000,000

Revolving Credit Facility 504,000,000 - 504,000,000

$5,404,000,000 $2,220,000,000 $2,899,000,000

* September 30, 2020 balance14

Cash Reserves

Provincial Cash Balance Canada T-Bills, Repo’s, Provincial Paper & BA’s 3,119,000,000

Rainy Day Fund CANHOU’s & Provincial FRN’s 800,000,000

$3,919,000,000*

Sinking Fund Provincial Bonds $1,100,000,000

International10%

T-Bills4%

CAD MTN Private Placements

14%CAD Debentures,

Private Placements49%

CAD Debentures, Public Placements

23%

Funding Sources

CAD Public Debentures

53%

CAD

MTN

EUR

CHF✔

✔

CAD Public Debentures, 56%

CAD MTN, 8%

CAD FRN,2%

USD Global, 16%

Other Int'l Markets,

18%

AUD

GBP

HKD

JPY

NZD

CHF

EUR

SEK

✔

✔

✔

✔

✔

✔

✔

✔

15

Last 5 Years Avg. Current Fiscal Year

Debt Maturity Profile

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2021

2023

2025

2027

2029

2031

2033

2035

2037

2039

2041

2043

2045

2047

2049

2051

2053

2055

2057

2059

2061

2063

2065

2067

2069

2071

(C$ Billion)

As of September 30, 2020. Excludes short-term debt and other liabilities, and the incremental impact of future financing. Net of sinking fund maturities.

2121

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Manitoba – Credit Rating Profile

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“The stable outlook reflects our expectation that the economic repercussions of the COVID-19 pandemic will have a significant, albeit

temporary, impact on Manitoba's budgetary performance. We expect that the recovery trajectory in the next two years will be

sufficient to allow the government to resume its focus on fiscal sustainability.””

- Research Update – May 15, 2020, S&P

“Manitoba’s Aa2 rating reflects strong debt affordability supported by low interest rates, a solid institutional framework, and

economic diversity which reduces the province’s vulnerability to macroeconomic shocks.”

- Research Update – July 22, 2020, Moody’s Investors Service

Sources: Moody’s Investor Services and Standard and Poor’s Rating Services

A1 (N)

Aa3

Aa3

Aa2

Aa2

Aa2

Aa2

Aa2

Aaa (N)

Aaa

NL

ON

AB

PE

NB

NS

QC

MB

SK

BC

Moody’s Credit Ratings

A (N)

A

A + (N)

A +

A +

A +

AA -

AA -

AA

AAA (N)

NL

PE

AB

NB

ON

MB

NS

QC

SK

BC

S&P Credit Ratings

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Contact InformationWebsites:

Contact:

Don Delisle, CPA, CA

Director, Capital Markets

Manitoba Finance, Treasury Division

(204) 945-5404

Don.Delisle@leg.gov.mb.ca

Treasury Division Website: https://www.gov.mb.ca/finance/treasury/index.html- SEC Registration Statement- EMTN Prospectus- Current Investor Presentation

Manitoba COVID-19 Updates: https://manitoba.ca/covid19/updates/index.html#cases

Disclosure StatementThis 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.