Province diverting $123M from programs, departments to pay for election promises By: Danielle Da Silva Posted: 12:58 PM CST Wednesday, Dec. 13, 2023 Last Modified: 6:48 PM CST Wednesday, Dec. 13, 2023 Updates

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This article was published 13/12/2023 (1048 days ago), so information in it may no longer be current.

Manitoba’s NDP government has ordered $123 million worth of cuts and reallocated spending to pay for its gas tax holiday, health and homelessness initiatives, with former Tory plans for health-care bearing the brunt.

On Wednesday, Premier Wab Kinew also directed an expenditure management review targeting health-care service delivery organizations in an attempt to “hold the line” on the projected financial shortfall: a forecast $1.6-billion deficit.

“Whenever you find yourself in this deep of a financial hole, the first thing you have to do is stop digging,” Kinew said during a news conference alongside Finance Minister Adrien Sala.

According to the province, several health authorities are forecast to spend significantly more than was budgeted for the 2023-24 fiscal year, which is creating pressure on the government’s overall framework.

Last week, Kinew and Sala announced the forecast deficit had increased to $1.6 billion from $363 million, as of Sept. 30, with health-care spending expected to be $566 million over budget.

Financial management, capital projects and system and operating costs at health authorities expected to surpass their budget are currently under review, with an expectation expenses will be reduced, according to the province.

Sala said the NDP government has not set a target for cost reductions at those organizations.

“We were on this trajectory that the previous government had put us on — they left us with this $1.6 billion number,” the finance minister said. “Our focus right now is going to be to make sure we hold that line and do everything we can through expenditure management, through the measures identified here… to keep that in check.”

Kinew said his government remains committed to balancing the budget within one term, while making good on other campaign promises.

The NDP’s first budget is expected in the spring.

In the meantime, the province has cut or redirected approximately $123 million in spending to finance initiatives currently being rolled out by the NDP, without deepening the deficit, officials said.

Sala said Manitoba has paused the purchase of $16.3-million worth of personal protective equipment that would have gone into its stockpile.

It also found $14 million in health-care administration “efficiencies,” he said, describing them as “administrative roles that were duplicated.” No jobs will be lost as a result, Sala added.

A spokesman for the minister later clarified most of the $14 million was initially to be spent on administrative roles to deliver the PC government’s health human resources action plan. However, those positions were not needed, owing to an over-estimation of need and lower-than-expected demand.

Nearly $6 million set aside to help nurses recruited from the Philippines settle in Manitoba will not be spent this year, as they will not arrive before March 31.

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Another $32 million budgeted for a COVID-19 command centre and $25 million set aside for the provincial civil service Idea Fund were cut to pay for other programs.

The NDP, which secured a majority in the Oct. 3 election, already disbanded the former Tory government’s economic development advisory board secretariat and its diagnostic and surgical recovery task force. Disbanding the task force is estimated to save $15 million.

Opposition finance critic Obby Khan said the government is setting the stage for future tax increases while cutting programs Manitobans need.

“This is premier has chosen to, for the holiday season, to prime the pump for Manitobans that it is doom and gloom in the future and that is not a responsible way to govern,” Khan said Wednesday.

Meantime, the NDP government is also looking at reducing administrative redundancies and discretionary expenditures to free up funding. Sala said his department has already tightened its belt.

“The last government had booked in $2.6 million of costs above budget in finance.”–Finance Minister Adrien Sala

“The last government had booked in $2.6 million of costs above budget in finance,” Sala said. “We’ve pulled back some of those expenditures, those are related to things like conferences and audit fees. So those have been canceled and brought back into the department.”

However, the premier said he doesn’t expect the civil service to sacrifice professional development opportunities if departmental spending is in line with the budget.

“We don’t think it’s fair if there’s a deficit being driven the service delivery organizations in health care to ask the staff in the department of agriculture to give up on professional development or a holiday party, things like that,” Kinew said.

Discretionary spending will be under the microscope elsewhere, the premier warned.

“We have an expectation that if you’ve missed your budget by hundreds of millions of dollars, then senior executives will be very judicious with their spending.”

The government’s gas tax holiday — which will temporarily pause the 14-cent per litre levy, starting Jan. 1 — is forecast to cost the provincial treasury $82 million by March 31.

The government is also implementing a “winter response plan” to address homelessness and provide temporary accommodations, with about $31 million allocated for projects focused on people at risk.

Health-care initiatives rolled out by the NDP — including adding beds at Grace Hospital in Winnipeg, hiring staff to discharge more patients on weekends, and a mobile MRI for northern Manitoba — will cost $10 million this fiscal year.

danielle.dasilva@freepress.mb.ca

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