Incoming NDP, outgoing Tories put province’s money where their mouths are

Hey there, time traveller!
This article was published 24/10/2023 (731 days ago), so information in it may no longer be current.

Let the finger-pointing begin.

It is customary for new governments to claim the outgoing government left behind a financial mess to clean up — and for the former office-holders to insist the books were in pristine shape when they handed over the keys to the public treasury.

It’s a rite of passage when government changes hands.

It’s no surprise then that less than a week after Manitoba’s new NDP cabinet was sworn in, those allegations are flying back and forth fast and furiously.

Premier Wab Kinew made vague accusations Tuesday that he’s “discovered” a lack of financial oversight around some spending under the previous Tory government. However, he couldn’t provide specific examples.

The Opposition Tories, meanwhile, are claiming they handed the incoming NDP government a “balanced budget.”

Both sides are hoping to sully the fiscal reputation of the other. It happens every time there is a change in government.

In 1999, the incoming NDP government went as far as commissioning an “independent” report to “prove” the former Tory government mismanaged taxpayer dollars. It was largely fiction. But it made for good politics and a few juicy newspaper headlines.

“After seven years of PC governance, Wab Kinew and the NDP inherit one of the fastest growing economies in Canada, with a balanced budget and record investments in healthcare, education, infrastructure, public safety, and affordability for Manitobans,” the Progressive Conservative caucus said in a statement last week.

In fact, the incoming NDP government did not inherit a balanced budget. They inherited a $363-million deficit for the 2023-24 fiscal year from the former Tory government.

The projected deficit was part of the Tories’ 2023 budget unveiled in March. The estimated shortfall was affirmed in the province’s first-quarter update in July.

That number will likely change, as it always does, throughout the fiscal year. It could end in a surplus, if revenues are higher than expected, or if the new NDP government dials back spending. The deficit could also grow if the NDP introduces new spending and/or if the economy tanks.

Projected deficits and surpluses are just that — projections. They represent the difference between what government expects in revenues less spending estimates, which can change from month to month.

The final numbers usually change again months after the close of a fiscal year, when all the figures are in and the province releases the audited public accounts. That’s the report that was released during the recent provincial election campaign at the end of September, which showed there was a surplus the previous year, in 2022-23.

The Tories are playing games with that figure by trying to conflate it with this year’s deficit. They are claiming, wrongly, that they left the incoming government with a surplus.

The Tories are playing games with that figure by trying to conflate it with this year’s deficit. They are claiming, wrongly, that they left the incoming government with a surplus.

The books were closed on the 2022-23 fiscal year almost seven months before the NDP government took office. Those financial results have nothing to do with the new government. They didn’t “inherit” that set of books. They inherited the budget that was unveiled by the previous government in March.

This game goes both ways, though. The new government is already setting the stage to allege that the Tories were wobbly on finances while in office.

Kinew said Tuesday during a news conference on health care that there was a lack of oversight around spending by the province’s diagnostic and surgical task force (which was set up by the previous government during the COVID-19 pandemic).

“They were making decisions about spending without having a system-wide view of what’s happening in the health-care system,” said Kinew.

That lack of financial oversight wasn’t just limited to health care, either, he said.

“There are other areas outside of health, as well, in which you’re going to see that there are serious concerns,” said the premier. But he wouldn’t say where, exactly.

Maybe there was a lack of oversight, maybe there wasn’t. It would be up to the auditor general to investigate — if he chose to do so and if it warranted such a probe — not a premier or a cabinet minister who has a partisan bias.

When it comes to the final tally for the 2023-24 fiscal year, it will be impossible to determine who was responsible for a deficit or a surplus. It will be a shared outcome. Each side will take credit or assign blame, depending on the circumstances.

The only thing we know for sure is the Tories introduced a deficit budget in March and the NDP inherited that budget. What happens with it over the next five months will be up to the new government. It will be shaped to some degree by factors beyond the New Democrats’ control, such as economic growth and inflation.

If there was improper financial oversight under the Tories in recent years, the auditor general will unearth it.

The rest is just politics.

tom.brodbeck@freepress.mb.ca