Sala to deliver economic update next week

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This article was published 10/12/2024 (323 days ago), so information in it may no longer be current.

Manitobans will get a double dose of economic news next week.

The federal Liberal government will release a fiscal update Monday, while Manitoba is preparing to unveil its own economic report next week.

The provincial government wouldn’t specify which day its report will be unveiled, or say whether Finance Minister Adrien Sala will announce an extension of the gas-tax freeze beyond Dec. 31. At that time, Manitoba will have lost about $300 million in fuel tax revenue while it spends more than $2 billion a year to service its increasing debt.

In September, the province released the public accounts for 2023-24 that showed a record high deficit for a non-pandemic year, of $1.97 billion. It’s the result of a drop in Manitoba Hydro revenue, increased health spending, new collective agreements with educators and civil servants, and the suspension of the 14 cent per litre fuel tax.

Questions about how the province plans to balance the budget by the end of its first term, as promised by Premier Wab Kinew, will be answered at next week’s fiscal update, Sala’s press secretary said.

The Free Press has for weeks been asking what steps the government is taking to rein in spending — such as reducing the use of consultants; imposing limits on spending increases on anything but health, education and families; restricting out-of-province travel and conference attendance; and leaving some jobs unfilled.

“The path ahead to recover from the previous government’s reckless spending and mismanagement will be challenging, but our government is committed to stabilizing the province’s finances and looks forward to updating Manitobans in the near future,” a statement from Sala said Tuesday.

In February, the province released a consultant’s report — a “Post Election Financial Accountability Review” that blamed the former Tory government for the deficit. “…Decisions were made that collectively represent high budgetary risk,” it said.

“Our team will continue to invest in the priorities of Manitobans, while being balanced when it comes to the books,” the finance minister’s statement said Tuesday.

The province’s tight lid on the fiscal update and its planned path to a balanced budget is to be expected, said veteran political observer Paul Thomas.

“It will also want to present the facts and frame the narrative around them in the most positive manner possible,” said the University of Manitoba political studies professor emeritus.

“It will be interesting to see if premier Kinew stands alongside finance minister Sala to symbolize that there is a strong partnership to achieve prudent financial management,” Thomas said Tuesday.

“The finance minister must have the support of the premier if he is to play the role of saying ‘no’ to the rest of cabinet who are spending ministers.”

He pointed to a perceived rift at the federal level between Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland over spending increases and missed deficit targets.

On Tuesday, Freeland would not promise to hit the $40.1-billion deficit target she set last year, as the Liberal government appears to throw off the shackles of spending constraints ahead of a federal election next year.

The Kinew government may want to avoid having its fiscal update overlap with the federal government’s fall economic statement on Monday, Thomas said.

“The Trudeau government has broken its spending promises and is at the end of its political life.”

carol.sanders@freepress.mb.ca