Financial numbers tell tale of province falling back, not moving forward

Opinion

The Manitoba government released its annual public accounts last week. And if there’s one thing the numbers make crystal clear, it’s that the province’s finances are not only heading in the wrong direction, they’re becoming increasingly unsustainable.

The public accounts, the annual audited books of the provincial government, is where rhetoric meets reality.

Governments can talk all they want in their budgets about economic growth, deficit reduction and long-term prosperity. But when the audited numbers come out, we see what really happened the previous year.

And what really happened in 2024-2025 is that Manitoba’s economy grew slower than every other province in Canada, the province posted one of the largest deficits in its history and it became even more dependent on federal transfers to keep the lights on.

It’s not good news.

The economic story is especially troubling. Manitoba’s real GDP growth in 2024-2025 was just 1.1 per cent — well below the national average of 1.6 per cent. That may sound like a small difference, but in the world of public finance, a few tenths of a percentage point over several years can be the difference between running sustainable budgets or plunging deeper into debt.

Sluggish economic growth means weak revenue growth. And that’s precisely what Manitoba is seeing. Revenues are going up — personal income tax, corporate tax, sales tax — all continue to bring in more each year. But they’re not rising quickly enough to keep pace with the government’s spending appetite.

Spending has grown at an average annual rate of 5.3 per cent over the past four years. You don’t need to be an accountant to know that’s not sustainable when revenues are not keeping pace.

The result? A staggering deficit of $1.149 billion in 2024-25. That’s $353 million higher than what the NDP government forecast in its 2024 budget.

Part of the problem lies outside the province’s direct control. Manitoba’s exports fell by 4.3 per cent in 2024 and have continued to soften through 2025. Exports to the United States — the province’s biggest trading partner — are down 8.2 per cent so far this year.

The biggest culprit: U.S.-imposed tariffs on Canadian goods. That has hit Manitoba’s manufacturing and agricultural sectors especially hard. When you’re a small, trade-dependent province, a drop of that magnitude in exports reverberates across the entire economy.

But while some of the economic headwinds are external, government still has choices. And the choices this government is making — to allow spending to balloon well beyond its means — are squarely on its shoulders.

Meanwhile, the public accounts show that the province’s reliance on Ottawa is now at its highest level in at least 15 years.

In 2024-2025, federal transfers accounted for 33.3 per cent of all provincial revenues. That compares to an average of 28.3 per cent over the past decade-and-a-half. The direction of travel is obvious: Manitoba is becoming more dependent, not less, on the federal government to pay the bills.

That makes Premier Wab Kinew’s rhetoric about one day transforming Manitoba into a “have” province — a province that doesn’t collect equalization payments — not just fanciful but completely detached from reality.

The problem is compounded by the government’s unwillingness to rein in overall spending. Yes, health care is expensive and requires sustained, targeted investment. Yes, education needs funding. No one disputes that.

But the spending growth we’re seeing isn’t just about front-line services. A big part of it comes from administrative bloat — ever-expanding bureaucracies within health authorities and government departments. Shared Health, the Winnipeg Regional Health Authority and other health agencies continue to absorb vast sums of money with little accountability for results.

If the Kinew government is serious about getting its fiscal house in order, it has to start there.

Tough choices have to be made. So far, we’ve seen very little appetite from this government to make them.

What we’ve seen instead is a government that talks big about fiscal independence while quietly presiding over one of the most dependent provinces in the country. A government that warns about deficits while spending far more than it takes in. And a government that celebrates every incremental gain in tax revenue while ignoring the reality that economic growth is faltering and exports are declining.

Manitobans deserve better than empty rhetoric. They deserve an honest conversation about the province’s finances. That means acknowledging the province cannot keep running billion-dollar deficits year after year without consequences.

It means recognizing that while Ottawa’s transfers provide temporary relief, they also mask the structural imbalance in our finances. And it means admitting that the dream of becoming a “have” province is, for now, just that — a dream.

The numbers don’t lie. They tell a story of a province that is falling behind, not catching up. And unless Manitoba gets its fiscal house in order and does more to stimulate economic growth, the province will become even more mired in debt and will eventually have trouble providing basic front-line services.

tom.brodbeck@freepress.mb.ca