Province demanding better accounting from ‘sausage grinder,’ finance minister tells business leaders

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This article was published 13/03/2018 (2767 days ago), so information in it may no longer be current.

The Pallister government is demanding greater financial accountability from Crown corporations, regional health authorities, school divisions and the rest of the nearly 200 “reporting entities” whose performance factors into the provincial budget.

Finance Minister Cameron Friesen said Tuesday that core government departments represent only about one-fifth of the province’s summary budget expenditures. Other governmental entities that report directly or indirectly to government account for the rest.

“This sausage grinder that we call the government reporting entity must modernize,” Friesen told a breakfast meeting of the Manitoba Chambers of Commerce, a day after unveiling his third provincial budget.

Afterwards, the finance minister said he has and will continue to demand more timely financial accounting from entities, such as Crown corporations, health authorities, school divisions, universities, child-welfare authorities and others whose financial status affects the government’s bottom line.

“We need to know in advance where groups are tracking. We need to know in advance if they are anticipating a variance that is significantly different than they budgeted,” Friesen said. “We should have the ability to look at new numbers on a weekly basis.”

In recent years, the provincial government, at the urging of the provincial auditor general, has employed summary budgeting (taking into account the performance of 180 reporting entities including government departments) in reporting on the state of its finances. On a summary budget basis, the government is projecting a deficit of $521 million in the coming fiscal year. After placing $50 million in its rainy-day fund, the government projects a core government deficit of $639 million for the fiscal year that begins April 1.

In the past, variations between what a Crown corporation such as Manitoba Hydro expected to earn in a year and what they wound up earning could be off by $100 million, the finance minister said. Large variances have also occurred in other areas that have left finance ministers feeling “blindsided,” he said.

Friesen said the government expects all reporting entities to do a better job of communicating their financial status on an ongoing basis.

“We’ve said to the Crown corporations, ‘We’re all in this together, you must do better.’ And we’re counting on them to get a better return,” he said.

Government wants to be able to give direction to Crown corporations and examine their operations to ensure they are fulfilling their mandate, he said.

“We’re not out to micromanage those agencies. They have CEOs and they have senior administration as well as boards,” he said.

Meanwhile, the finance minister defended his budget to business leaders, saying that the government was keeping its promise to reduce the deficit and it will keep its pledge to return all carbon tax revenues to Manitobans in the form of tax cuts. That will include lowering the PST by a percentage point by 2020, he said.

Friesen also said by reducing the summary deficit to $521 million in the coming year, the government had engineered a $1-billion turnaround from where the deficit was heading in future years under the previous NDP administration.

larry.kusch@freepress.mb.ca