Failing grade for fiscal transparency

Manitoba received the worst grade among provinces, territories and the federal government from a conservative think tank for transparency on how it taxes and spends.

The province received a D- in the C.D. Howe Institute report Making the Grade: The Fiscal Accountability Report Card for Canada’s Senior Governments, 2025. Alberta topped the class with an A+ for budgets, estimates and public accounts that were timely, accessible and reliable. The federal government earned a D for lateness and obscure presentations in its budget and estimates.

Manitoba scored low for the timeliness of its budget, estimates and public accounts. Its financial statements received multiple qualifications from the auditor general and it restated its budget projections in its public accounts.

“Budgets should come before the start of the fiscal year — you want to have a plan before you set off on your journey,” report co-author Nicholas Dahir said Friday.

“Manitoba’s 2024-25 budget was released after the April 1 start of the fiscal year, which means that for that fiscal year money was being raised and spent without the stewards of public funds having voted on a budget plan,” Dahir said. That makes it hard to hold them accountable for what occurs during that time, he said.

Jesse Hajer, associate professor of economics in the labour studies program at the University of Manitoba, said the province’s lower score is based on several factors, including preparing reports later in the calendar year than other province, having qualifications on the auditor’s opinion and running a much larger deficit than budgeted.

Last December, for the seventh year in a row, Manitoba’s auditor general issued a “qualified audit opinion” on the province’s 2023-24 consolidated financial statements, also referred to as the public accounts. A qualification is a warning to users of the financial statements that there is information that could not be audited and, therefore, may not be reliable.

Auditor Tyson Shtykalo’s report “identified significant weaknesses in financial statement preparation and the control environment…. We found an unprecedented number of errors that required correction by the province during the audit,” it said.

“Many of the issues related to processes the province used to consolidate financial information from departments and other entities in the public sector into the summary financial statements.”

The concerns could be addressed by the province building capacity to produce reliable financial information and strengthening its internal controls, the auditor said.

Finance Minister Adrien Sala said the bulk of Manitoba’s D- is owing to the former Progressive Conservative government’s 2023-24 big-spending, pre-election budget.

“That’s the same budget that left Manitobans with a $2-billion deficit,” he said. “The last government left Manitoba with a fiscal mess, so we had a lot of issues to work through,” Sala said in an interview, and pointed to the 2024-25 public accounts.

“Ultimately, as a result of the efforts that were made, we were able to come out with a clean audit opinion for the first time in over seven years.

“What I can say with confidence is that next year, when that C.D. Howe report card comes out, we’re going to see significant improvement.”

The NDP government must ensure that it is providing a true and complete picture of the province’s finances, Tory finance critic Lauren Stone said.

She said the province is collecting $148 million more in education property taxes and has stopped indexing tax brackets to the rate of inflation, pushing taxpayers into higher tax brackets without a corresponding increase in their real income.

“Manitobans are struggling to make ends meet,” she said. “What they need is fiscal restraint, not unprecedented accounting errors and financial errors by this NDP government using Manitoba’s tax dollars.”

The Tory government’s “massive” cuts to property and income taxes left Manitoba with a “huge deficit hole in the provincial budget that is very difficult to close,” said Molly McCracken, the Canadian Centre for Policy Alternatives’ Manitoba director.

“Emergency or other unforeseen expenses leave Manitoba vulnerable.”

She called on the province to boost revenues “by taxing those with the means to pay a bit more in taxes, to guarantee quality public services we all rely upon.”

Hajer said there is broad public sentiment that public services such as health care were underfunded by the Tories and require investment.

“At the same time, with the U.S. trade challenges and people still feeling squeezed on affordability, increasing tax rates is a tough sell. People may be more accepting of higher deficits in these circumstances,” he said.

carol.sanders@freepress.mb.ca