Manitoba projects deficit close to $2B, government launches health-care audits

WINNIPEG — The Manitoba government issued a new, higher deficit projection Friday and announced financial audits of health authorities to crack down on what it called overspending.

The deficit for the fiscal year that will end March 31 is forecast to come in just under $2 billion — up from $1.6 billion in the last fiscal update in December. It would be the highest deficit ever in Manitoba outside the COVID-19 pandemic.

The NDP government, elected in October, has blamed the former Progressive Conservative government for making health-care promises that were not accounted for in the Tories’ budget a year ago. 

“The increases in health-care expense were spurred by decisions made by the previous government but were unbudgeted,” Finance Minister Adrien Sala said.

Money was also not set aside for recent collective agreements that awarded salary increases to health workers, Sala said.

The Tories, now in Opposition, rejected the accusations and said the last budget had hundreds of millions of dollars set aside for contingencies and unexpected costs.

Tory finance critic Obby Khan accused the government of exaggerating the deficit.

“Manitobans should be very concerned about this narrative that this NDP government is trying to paint … saying the world is on fire and then magically pop up on (budget day) and say, ‘Oh, everything’s fixed,'” Khan said.

Sala said a sharp rise in health spending will necessitate financial audits at four of the province’s five regional health authorities as well as at Shared Health, the central planning body, although he refused to say what prompted the move.

“Today, we won’t be speaking about the details of those audits,” Sala said.

Costs have also jumped by more than $200 million to set aside money to settle long-standing lawsuits in justice and social services. Sala again refused to provide any details or identify the lawsuits.

Another factor is the government’s decision to temporarily suspend the provincial fuel tax, as of Jan. 1, for at least six months. That is costing the treasury an estimated $82 million in the first three months.

The extra red ink comes as Sala prepares his first budget, set to be delivered April 2.

Manitoba has registered deficits in every year but two since 2009, and the NDP has promised to balance the budget within its first term while also boosting health care.

“Our government will show that we can balance the need to invest in priority areas while we … find that path to balance,” Sala said.

This report by The Canadian Press was first published March 22, 2024.

Steve Lambert, The Canadian Press