Provincial deficit increases by $513 million

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This article was published 16/12/2024 (313 days ago), so information in it may no longer be current.

Manitoba’s forecasted deficit for 2024-25 has risen by $513 million, but the NDP is billing the latest fiscal report as a “good news story” given overall improvements since the party formed government 14 months ago.

Finance Minister Adrien Sala provided a mid-year fiscal and economic update Monday afternoon.

His new 18-page report suggests the province is on track to end the fiscal year ending on March 31 with a $1.3-billion deficit. That’s up from a $796-million projection in Budget 2024.

It places blame on longstanding failures to both deliver health-care services within funding and properly anticipate clinical pressures, as well as a breakdown of accountability resulting in overages in the sector that are “not only accepted but assumed unavoidable.”

The Department of Health, Seniors and Long-Term Care is anticipated to overspend by $438 million — $230 million of which is tied to health authorities’ bills.

“To put it simply, we are seeing too much money being spent in the boardroom rather than at the bedside,” said Sala, who co-hosted an afternoon media event with deputy premier and Health Minister Uzoma Asagwara.

Wayne Ewasko, leader of the Opposition Progressive Conservatives, accused the province of attempting to bury what is actually a “bad news story” by releasing details in the wake of the federal finance minister’s resignation.

Chrystia Freeland, who was deputy prime minister and had overseen national budget planning since 2020, stepped down from her high-profile role Monday morning — hours before Ottawa was scheduled to deliver its fall economic statement.

Ewasko said he’s curious to know what Premier Wab Kinew — who is in Toronto for a meeting of provincial officials across the country — makes of the situation.

The Kinew government remains committed to balancing the books by the end of the NDP’s four-year mandate, Sala said, adding about $32.9-million of savings are being found by streamlining procurement processes.

“This is a good news story. It shows that we’re making progress on our commitments,” he told reporters.

The province also announced it is eliminating three different PC initiatives, including the Teachers’ Idea Fund, regulatory accounting secretariat and the Ministry of Families’ transformation division to free up an additional $4.4 million in total.

Sala boasted the gas tax holiday’s continued impact on reducing inflation, as well as a number of key indicators that are improving relative to budget-time expectations, including higher average weekly earnings among Manitobans and a lower unemployment rate.

The finance minister also noted the province has added more than 20,000 new jobs on a year-over-year basis and there’s been a deficit reduction, relative to the prior year’s true result.

The province released the public accounts for 2023-24 in September, revealing a record-high deficit — $1.97 billion — for a non-pandemic year.

It was the product 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.

Monday’s update for the second quarter of the current fiscal year projects a $662-million improvement to the deficit forecast, now at $1.3 billion.

“This is increasing debt-servicing costs on Manitobans — $6 million a day is going just to service Manitobans’ debt. That needs to come down,” PC finance critic Lauren Stone said.

Stone accused NDP officials of not sticking to their budget, failing to provide details about how local jobs will be protected if Donald Trump’s U.S. government enacts tariffs when it takes power Jan. 20 and harming patient care with what she called an “eight per cent cut.”

“This is a good news story. It shows that we’re making progress on our commitments.”–Adrien Sala

Last week, the health minister’s office confirmed the government had issued a directive to Shared Health and regional authorities to redirect eight per cent of dollars previously earmarked for corporate services to improve patient care.

“The previous government’s approach for 7-½ years created chaos and created structural inefficiencies in terms of financial spending that we’re working very hard to address,” Asagwara said, adding that the NDP walked back plans to dismantle Shared Health because health-care workers and patients want stability.

The former psychiatric nurse said Monday that 30 corporate positions at Shared Health have been cut and the province has hired third-party accountants to audit health authorities’ budgets, spending practices and accountability measures.

The audits will be finalized and released publicly in the future, Asagwara said.

Manitoba Nurses Union president Darlene Jackson said she was disappointed by the projected deficit, fearing it will spell further strain on a beleaguered health-care system that is “already very lean.”

“I’m not sure that we are going to be able to actually make any difference without accountability and without some monitoring,” Jackson said.

The union leader said she is in support of the NDP’s plans to slash spending on private-agency services, ongoing financial audits and the elimination of 30 corporate positions, although she questioned when, and from where, those jobs were eliminated.

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Asagwara said some of those roles were the result of provincial contracts, including several given to staff not living within Manitoba.

Seeing the government find tens of millions of dollars in savings by identifying inefficiencies is positive, but there’s a long way to go if the NDP expects to balance the budget before 2027, as promised, said Gage Haubrich, prairie director of the Canadian Taxpayers Federation.

“It was already difficult, even by the government’s own numbers,” Haubrich said. ”Until we actually see the full fruits of that, we’ve got to tell the finance minister to grab a shovel and keep trying to find that waste.”

— With files from Tyler Searle

maggie.macintosh@freepress.mb.ca

Maggie Macintosh
Education reporter

Maggie Macintosh reports on education for the Free Press. Originally from Hamilton, Ont., she first reported for the Free Press in 2017. Read more about Maggie.

Funding for the Free Press education reporter comes from the Government of Canada through the Local Journalism Initiative.

Every piece of reporting Maggie produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.