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A migrant worker wears a mask and practices social distancing to help slow the spread of the coronavirus disease (COVID-19) while loading trays of onions at Mayfair Farms in Portage la Prairie, Manitoba on April 28, 2020.

Shannon VanRaes/Reuters

After a brutal hit from the COVID-19 outbreak, Manitoba is vying for a consolation prize: the best provincial economic growth of 2020, albeit in a year of contraction.

Given its success in containing the coronavirus outbreak, Manitoba is set to absorb a weaker economic hit than most other provinces, leaving it with less ground to recover in the coming months.

In a recent forecast, Royal Bank of Canada said Manitoba’s inflation-adjusted gross domestic product would shrink 3.8 per cent in 2020, which would rank best among the provinces, and considerably stronger than a national drop of 5.9 per cent. Toronto-Dominion Bank is projecting a 3.4-per-cent pullback, with only Prince Edward Island faring better.

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Manitoba’s relative fortune is “largely because the initial hit [from the pandemic] wasn’t as devastating as it has been for other provinces,” said Robert Hogue, a senior economist at RBC.

There are also homegrown factors at play, too – notably, that Manitoba isn’t overly exposed to any single industry, let alone one that will take years to recover. On the other hand, demand should remain strong for its key agricultural products.

“The Manitoba economy is relatively diverse,” said Fletcher Baragar, an economics professor at the University of Manitoba. “That provides more balance, and that balance provides, in general, more stability.”

Over the past three months, Manitoba has been somewhat unscathed by the outbreak. As of Tuesday, it had registered 325 confirmed or probable cases of the novel coronavirus. There have been roughly 23 cases for every 100,000 people, behind only PEI and New Brunswick among the provinces.

That’s allowed Manitoba to reopen at a quicker pace than most others. It moved into the third phase of its reopening plan on June 21, which allowed occupancy restrictions to be removed at retail stores from a previous 50 per cent. Patron limits were also scrapped for bars and restaurants, although physical distancing rules are still in effect.

As virus fears ramped up, Manitoba was also slower to shut down than many others. The provincial government ordered non-essential businesses to close as of April 1, or about a week later than Ontario and Quebec. “It does show up in the [economic] numbers,” Mr. Hogue said.

On several fronts – job losses, retail sales and manufacturing shipments – Manitoba has suffered historic losses, only not as deep as most of its peers.

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As the recovery unfolds, it helps that Manitoba isn’t overly tied to deeply affected industries, such as tourism. Between July and September of last year, international tourist spending in Manitoba amounted to less than 0.2 per cent of provincial GDP, lower than everywhere but Saskatchewan. “Manitoba is not really a tourist hot spot,” Prof. Baragar said.

Instead, the provincial economy is fairly diversified. Manufacturing was the largest industry by GDP in 2019, but made up just under 10 per cent of the total economy. A key contributor is agriculture and food manufacturing, which combined for 7 per cent of GDP last year. “Food manufacturing, which represents a relatively large share of output, is likely to outperform,” TD’s forecast said.

“Manitoba doesn’t really get those extreme booms that move the economy as a whole,” Prof. Baragar said. “But on the other hand, we usually do better during downturns or recessions.”

There are some risks to the outlook. In TD’s report, it pointed to a probable decline in non-residential investment, China’s continuing restrictions of canola imports from Canada, and Manitoba’s “heavy reliance” on exports to Alberta and Saskatchewan, which are not only coping with the pandemic hit, but lower commodity prices.

Like other provinces, Manitoba is susceptible to a second wave of virus cases, and its businesses are often reopening to weaker sales and greater debt obligations.

Sutton Smithworks, a jewellery design and repair shop in Winnipeg’s Exchange District, returned in early May. It received a loan from the federal government, and is using the federal wage subsidy to rehire all workers and help with payroll. Even with operations up and running, revenue is down about 50 per cent, co-owner Peggy Sutton said. “The whole wedding industry is in the sewer this year,” she said.

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Still, Ms. Sutton was expecting sales to be worse, and she’s cautiously optimistic about the future. “I’m just happy that Manitoba is doing as well as it is,” she said.

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