Projected deficit in Manitoba up half a billion dollars, finance minister says
The latest mid-year report from Finance Minister Adrien Sala has revealed some concerning news for Manitoba’s fiscal situation. The projected deficit for the current fiscal year has grown by half a billion dollars, with the province now expecting to end the 2024-25 fiscal year with a $1.3 billion deficit. This is $513 million more than originally anticipated when this year’s budget was tabled, which had a deficit of $796 million.
The primary reason for this increased deficit is attributed to rising health-care costs. The report points to “longstanding failures to deliver services within funding or anticipate financial pressures,” suggesting that health regions are not effectively managing their spending. There has been a breakdown of accountability between the government and service delivery organizations, leading to overages in health spending becoming accepted as unavoidable.
Manitoba has been running deficits for most years since 2009, with the exception of two years when the former Progressive Conservative government managed small surpluses. However, the recent loosening of purse strings by the Tories, combined with revenue shortfalls at Crown corporation Manitoba Hydro and a significant legal settlement over child welfare payments, has created a substantial deficit for the current government to address.
In response to these challenges, the NDP government has implemented measures that have further strained the budget. These include a temporary suspension of the provincial fuel tax, collective agreements with public-sector workers that include significant pay raises, and a commitment to keeping annual spending growth below 2.5%. However, some of the collective agreements contain wage increases that exceed this threshold, posing a challenge to the government’s budget-balancing efforts.
Despite the growing deficit, Finance Minister Sala attempted to frame the situation as positive progress compared to the previous year’s deficit. He reaffirmed the government’s commitment to balancing the budget by 2027. However, opposition critics like PC health critic Lauren Stone have criticized this perspective, highlighting the substantial increase in the deficit as a cause for concern.
In an effort to control costs, Manitoba is looking to streamline its health-care bureaucracy. While there have been calls to consolidate the functions of Manitoba Health, Manitoba Shared Health, and the province’s regional health authorities, the government has expressed concerns about creating instability in the system. The focus is on ensuring that frontline workers have stability and support in delivering essential services to Manitobans.
Overall, the fiscal challenges facing Manitoba are significant, but the government remains committed to addressing them and working towards a balanced budget in the coming years. By implementing strategic measures to manage spending and streamline operations, Manitoba aims to improve its financial outlook and ensure long-term stability for the province’s finances.
