PCs tally core deficit at $1B

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This article was published 18/05/2016 (3433 days ago), so information in it may no longer be current.

Manitoba’s core government deficit for the last fiscal year is now projected to exceed $1 billion — $346 million more than the outgoing NDP administration pegged it at just 10 weeks ago, the province’s new Progressive Conservative finance minister says.

Cameron Friesen accused the former government of misleading Manitobans about the true state of the province’s finances in the days leading up to the April 19 election.

At a news conference on Wednesday, he pegged the 2015-2016 deficit at $1.012 billion, but provided little supporting information to back up the projection. 

“Manitobans are open and trusting people who want open government, but it would seem that they were misled,” Friesen said of the NDP deficit numbers.

“I would want to underscore that this was not accidental. It was not a one-off. It was reckless,” he said. “The NDP chose to present to Manitobans information that was not accurate. They withheld important information.”

Premier Brian Pallister called the deep fiscal hole the new government finds itself in as a “desperate, but not impossible, situation.”

He was careful not to blame the civil service for previous NDP estimates.

“It’s clear to me the political agenda was to low-ball the nature of the problem,” Pallister said. “And to now try to pretend that it was as it was stated is really, really misrepresenting the facts,” he said.

The largest deficit in the province’s history occurred in 2011-2012 when the costs of a massive flood put the government $999 million in the red. However, that deficit was calculated on a summary basis, meaning it included the operating results of Crown corporations, regional health authorities and other reporting agencies.

Friesen declined to reveal how large the provincial deficit would have been this past year on a summary basis, which is the accounting method employed by Manitoba’s auditor general. The government is expected to offer that information when it introduces its 2016-2017 budget on May 31, two months into the fiscal year.

Manitoba New Democrats accused the finance minister of failing to back up his billion-dollar deficit claim.

“It’s his obligation as finance minister to be transparent. How are we supposed to evaluate” whether the figure is accurate?” MLA James Allum (Fort Garry-Riverview) told reporters.

Allum said that when the NDP released its fiscal update on March 8, its numbers were “solid.”

He said Friesen is setting the stage to place services in peril. “His number today says they won’t be able to do anything,” the NDP finance critic said.

In its fiscal update, the former NDP government projected a $666 million 2015-2016 core deficit ($646 million after transferring $20 million in funds from the province’s rainy day fund). It estimated the summary deficit at $773 million, some $351 million greater than originally budgeted.

Friesen provided few details to reporters on how he came up with the $1 billion deficit figure. He said the NDP had overstated revenues in its fiscal update by about $180 million. He suggested that part of this was due to declining tax revenues.

After facing demands from Opposition MLAs and the media for more details on how it came up with its $1 billion deficit figure, the government released a statement late Wednesday clarifying that revenues were $174 million lower than what the NDP had stated while spending was $94 million higher than earlier projected. The higher costs were the result of $53 million in municipal disaster financial assistance claims for 2011 and 2014 as well as “several year-end liability adjustments,” the statement said.

Meanwhile, despite the deep fiscal hole the government has inherited, Pallister continued to insist that the PCs would lower the PST by a percentage point within their first mandate.

— with files from Nick Martin

larry.kusch@freepress.mb.ca