Gulf remains between Manitoba infrastructure budgeting, spending
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Hey there, time traveller!
This article was published 07/05/2020 (1055 days ago), so information in it may no longer be current.
Premier Brian Pallister’s announcement Manitoba plans to spend an extra $500 million in infrastructure projects over the next two years should be taken with a grain of salt.
What Pallister says his Tory government will spend on infrastructure — including highways, bridges, flood mitigation projects and health-care facilities — and what it ends up spending, have been two different things.
The provincial government has underspent its strategic infrastructure budget by hundreds of millions of dollars in each of the past three years, raising serious questions about the credibility of Thursday’s announcement.
In 2017-18, Manitoba budgeted $1.677 billion for infrastructure projects, including $510 million for highways and airport runways and $143 million for maintenance and preservation of highways. Hundreds of millions were marked in the capital budget for health-care facilities, schools and housing, as well as for municipal infrastructure, public service buildings and technology.
According to the province’s public accounts, $1.19 billion was spent on infrastructure that year. Spending on highways was $60 million less than budgeted, health-care facility spending was $197-million below budget, and water-related infrastructure was cut in half, to $30 million.
Government attributed some of that to delays in getting projects off the ground.
However, the same thing happened in 2018-19: $1.634 billion was budgeted for strategic infrastructure, but only $1.068 billion was spent, according to the province’s audited financial statements.
Figures haven’t been released yet for 2019-20, but according to Manitoba Finance’s third-quarter report, released in March, infrastructure spending for the last fiscal year was projected to be $323-million below budget.
The province has claimed such budget underspending was due to “lapses,” but it is really just a cut — and cutting infrastructure spending as much as the Pallister government has hurts the economy.
There’s no doubt the Tories had to get capital spending under control when they took office in 2016. Infrastructure, which is debt-financed, was the main reason the province’s net debt doubled to $23 billion between 2008 and 2016 under the NDP, resulting in three credit rating downgrades. It had to be curbed.
However, the Pallister government cut too deep. Slashing spending on roads, highways and municipal infrastructure has a negative impact on the transportation sector and other aspects of the economy.
Thursday’s $500-million announcement was designed to give the appearance the Pallister government is doing something to help kick-start the pandemic-weakened economy. The premier has been criticized for austerity measures during a severe economic downturn and is looking for some positive coverage.
However, the so-called new funding may turn out to be little more than smoke and mirrors: the kind Manitobans have already seen from the province on infrastructure spending over the past few years.
Announcing a spending plan over a two-year period has little meaning. Governments budget one year at a time; no one knows what the infrastructure blueprint will be two years from now, until it is published. Even then, the extent to which the province has recently underspent on infrastructure makes the figure just as meaningless.
The province pledged $1.783 billion for strategic infrastructure in its 2020 budget, including $368 million for highways and $124 million for highway maintenance and preservation.
If government makes good on its Thursday announcement of $250 million over and above, the province would be on track to spend more than $2 billion in 2020-21 on infrastructure. We won’t know if it reached that amount until the fall of 2021, when the public accounts are released.
Given the Pallister government’s track record, it seems unlikely.
Tom has been covering Manitoba politics since the early 1990s and joined the Winnipeg Free Press news team in 2019.
Updated on Thursday, May 7, 2020 9:52 PM CDT: Fixes typo.