Premier Brian Pallister deflected questions Monday on whether he would consider a multibillion-dollar bailout for Manitoba Hydro, suggesting such discussions are premature.

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Premier Brian Pallister deflected questions Monday on whether he would consider a multibillion-dollar bailout for Manitoba Hydro, suggesting such discussions are premature.

At a press conference called ostensibly to restate the province's demands for greater federal health transfer payments, Pallister suggested the Crown corporation make its financial case to the Public Utilities Board when it seeks its next consumer rate hike.

Sandy Riley, the Progressive Conservative-appointed Hydro chairman, has said the corporation needs a massive provincial equity infusion to get back on its feet. Hydro has also unveiled plans to trim its workforce by about 15 per cent.

Pallister said the investigative role of the Public Utilities Board should be allowed to play out.

"Unless we understand how we got in this mess in the first place, we shouldn’t move ahead with remedial action because we are not going to be addressing the causes," the premier told reporters. "We may even be repeating the causes of the problem. So the first thing that has to happen is that we have got to investigate and get to the bottom of how we got into this mess in the first place...

"Until we understand how we got into this multibillion (dollar) hole in the first place, talking about solutions would be premature."

Hydro is currently finalizing its financial forecasts for the PUB, a spokesman for the Crown corporation said Monday. No date has been set for a hearing by the regulator.

Pallister would not say whether he has had talks in recent days with Riley over his public appeal for a cash injection. "I don’t talk about personal discussions," the premier said.

Pallister castigated the previous NDP government for placing Manitoba Hydro in a perilous financial predicament by forcing it to greatly expand hydroelectric power production for the American export market. He said Manitobans were not properly consulted.

"I’m not afraid of a public discussion on Hydro or anything else. I think it’s a good healthy thing," he said.

Meanwhile, in beating the drum for higher federal health payments, Pallister cited the findings of six independent studies that show the course Ottawa has set will make it difficult for provinces and territories to maintain adequate funding for social programs and balance their books in the future.

The federal government this year is ending a string of six per cent annual increases in provincial health funding. It has reduced the annual transfer to three per cent and then kicked in extra money for home care and mental-health services. The total increase amounts to about 3.4 per cent this year. Manitoba and the country's largest provinces are demanding an overall increase of 5.2 per cent.

Pallister noted that because of Ottawa's intransigence on the issue so far, Manitoba has been forced to build Ottawa's new health funding formula into its forthcoming budget. The date of the spring provincial budget has not yet been announced.

The premier said the province remains committed to working with organized labour to find cost savings that will allow it to avoid laying off front-line staff and maintaining provincial services.

While he expressed disappointment in the province's inability to negotiate with Ottawa on health funding, Pallister said the two levels of government are working smoothly on the immigration file, including the recent flurry of asylum claims at the Canada-U.S. border point at Emerson.

Federal-provincial discussions have centred on security issues at the border and the cost to social agencies of dealing with larger numbers of asylum-seekers.

"My first concern is for the security of Manitobans, but I’m also, of course, concerned for people seeking refuge here," Pallister said. "Manitoba has always been that welcoming place for people seeking help, and I want to make sure that continues. And I believe Manitobans do, too."

Larry Kusch

Larry Kusch
Legislature reporter

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.

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