Brace for impact: ‘tough’ budget arrives April 11

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This article was published 02/03/2017 (3487 days ago), so information in it may no longer be current.

This is going to hurt.

Finance Minister Cameron Friesen delivered a heads-up Thursday: April 11 is D-Day — desperate times, drastic measures — when he will tell Manitobans how painful it’s going to be for the Tories to tackle the province’s $1-billion deficit.

“We need to look hard at what we can afford to do now,” Friesen told reporters Thursday, flanked by two experts appointed in December to help the government sort out the deteriorating situation.

“This budget has to include some tough measures.”

And by tough measures, taxpayers can expect some form of wage controls on civil servants, less money and strict rules about spending it in provincial departments and some cuts in management positions.

Premier Brian Pallister later told reporters that there could be consequences for cabinet ministers failing to meet their budgets — he did not reject the suggestion of pay cuts — and unspecified consequences for senior managers missing their budget targets.

“In the past, there were no consequences. The consequence of the lack of consequences brought our credit rating down,” said Pallister. The enforcement mechanism of failing to keep spending within revenue in a business or home is bankruptcy, he said, so it’s only reasonable and fair that there be consequences in the public sector.

“The province of Manitoba has consistently missed its deficit targets,” said Janice MacKinnon, who co-chairs the advisory panel created by Premier Brian Pallister at the end of last year with former Winnipeg Chamber of Commerce president and CEO Dave Angus.

MacKinnon, a former Saskatchewan NDP finance minister, said credit-rating agencies have watched Manitoba’s deficit grow year after year since 2007, all on the previous NDP government’s watch.

There are three keys to achieving a balanced budget over the next eight years, she said: prudent management of operational and capital spending, including finding reductions and efficiencies; growing revenues without new or higher taxes; and identifying assets that can be managed more efficiently.

“The core task of the government is to reduce expenditures over time so you can achieve a balance,” she said. “It’s a spending problem here —you can’t tax more in Manitoba.”

MacKinnon, who served as finance minister under NDP premier Roy Romanow, said Pallister is taking action sufficiently early to reverse the financial woes over time.

Managing compensation levels is a must, Angus said.

About 70 per cent of the budget goes to paying employees, including $1 billion in civil-service wages and $9 billion to others in the public-sector, such as Crown corporations.

The panel discovered layers of management it says add to costs but not to outcomes; senior management ranks are up 33 per cent in the public sector since 2005, raising the possibility that Pallister’s orders to chop 15 per cent of those positions could be revised for more savings.

“There’s systemic changes that have to be made,” Angus said. “We can’t sustain the status quo.”

Friesen did not release any written reports from the advisory panel, and said that while he promises to be accountable to the public, he would not commit to making public the ongoing reviews and audits into government spending.

However, Pallister later said he would release documents, including two lengthy KPMG reviews of government services, with some privacy redactions, although not until after the budget.

“I want people to see it” and spark ideas for further discussion, the premier said.

Nor would Friesen say if he has defined the “front-line services” and “front-line workers” the government has vowed to protect.

NDP finance critic James Allum said it’s unfair to keep public sector workers and their families in fear whether they’ll still have a job after the April 11 budget.

“It would be best if they just came clean,” Allum said.

nick.martin@freepress.mb.ca