The Pallister government says it is ahead of schedule in slaying the province's deficit, but Manitoba's auditor general says the task is already done.
For the second consecutive year, Norm Ricard has cited errors in the government's accounting practices, qualifying his audit opinion of the province's annual financial statements.
On Thursday, Finance Minister Scott Fielding released the province's public accounts, stating the deficit for the 2018-19 fiscal year at $163 million — a considerable improvement from the $521-million deficit he originally projected.
However, Ricard said if public-sector accounting standards had been properly applied, the province would have shown a $9-million surplus.
Like he did last year, Ricard took the government to task for excluding the financial results for the Workers Compensation Board in its summary financial statements. His second qualification was the government did not properly account for two newly-created trusts at Manitoba Agriculture Services Corp., a Crown corporation that lends money to farmers and also sells them crop insurance.
Ricard said not including the WCB in its summary financial statements understated government assets by $632 million and understated the deficit by $53 million. He said not including the MASC trusts in the financial statements understated assets by $490 million and overstated the province's deficit by $225 million.
A year ago, the auditor general also cited errors in the government's accounting, which, he said, overstated the 2017-2018 deficit by $347 million.
The provincial auditor's concerns aside, the government had a much better financial year than expected because a lot of things went right and there were no treasury-draining natural disasters to contend with.
As well, the government was stingy in its spending. Expenditure growth was held to 1.6 per cent — $285 million under budget. All but two departments came in under budget, which the government called "virtually unprecedented."
Health spending was $215 million under budget, although more than half of that was due to changes in accounting procedures. Education spending came in $79 million under budget.
Provincial revenues increased by $823 million — 5.1 per cent over the prior year — the largest single-year revenue growth in more than a decade.
The increase was driven by strong growth in personal and corporation income tax and sales tax revenues (the PST had yet to be lowered), and major federal transfers. Some government businesses, most notably Manitoba Hydro and Manitoba Public Insurance, made more money than anticipated.
Commenting on the results Thursday, Fielding said the government is now in "striking distance" of balancing its books.
"We’re ahead of schedule, which means good news for Manitobans. But we’re not there yet," he said of the year-end results.
The Pallister government has long disagreed with the auditor general that WCB should be counted in its summary budgeting process. It contends it does not control WCB assets, which, it argues, belong to employers and employees. Fielding said the government plans to introduce legislation, amending the Workers Compensation Act, to clarify the matter.
The government also disputes the auditor's interpretation regarding the establishment of certain trusts.
Fielding said, however, the government has been "working collaboratively" with the auditor general on the issue.
Mark Wasyliw of the NDP, who will be sworn in Friday as MLA for Fort Garry, said the government has under-spent its health budget by close to a half-billion dollars over the last two years.
"What that means is real pain for Manitobans. It means not having a nurse at the bedside. It means no personal care homes being built in the last three years. It means closing family clinics in St. Boniface. It means real cuts to services for health care that Manitobans rely upon," he told reporters Thursday.
Wasyliw noted the auditor general, who reports directly to the legislative assembly, is a non-partisan position.
"Why this government doesn’t want to follow standard accounting practices, well, I’ll leave it to them to answer. But I think it just shows a pattern of cynical politics here that they’re using these artificial deficits to create an economic crisis that doesn’t exist," he said.
Liberal Leader Dougald Lamont said in a dispute between the government and the auditor general, "I believe the auditor."
He accused the Pallister government of "playing games" with the province's financial statements.
"It’s just treating the public accounts as one more thing to spin," Lamont said.
On Wednesday, Premier Brian Pallister made the surprise announcement the government had added $407 million to the province's rainy day fund, bringing the total to $572 million. Only $50 million had been budgeted to be deposited.
This spring, the government introduced a budget forecasting a deficit of $360 million for the current fiscal year.
Jessica Botelho-Urbanski covers the Manitoba Legislature for the Winnipeg Free Press.
Larry Kusch didn’t know what he wanted to do with his life until he attended a high school newspaper editor’s workshop in Regina in the summer of 1969 and listened to a university student speak glowingly about the journalism program at Carleton University in Ottawa.
Updated on Friday, September 27, 2019 at 9:47 AM CDT: Adds missing word