Manitoba government finds $123M in savings, will use that money to pay for NDP commitments

Manitoba's NDP government expects to find $123 million in savings this fiscal year that it will redirect toward its party's  commitments rather than offsetting a deficit forecast coming in at $1.6 billion. 

Premier Wab Kinew and finance minister Adrien Sala said the government would "hold the line" on the province's finances to prevent the deficit forecast from getting worse.

"Whenever you find yourself in this deep of a financial hole, the first thing you have to do is to stop digging," Kinew said. 

Since the party's election in October, it says it has found various savings, including $15 million by disbanding the surgical task force, $25 million by cancelling a government fund to support the ideas of civil servants and $32 million because the government's COVID command centre is no longer running.

The province is also reducing $14 million in spending by eliminating duplicative work within health-care administration. No jobs will be lost as a result, the premier said.

"These are things that were set out in the budget that we don't have a staff position or an initiative where we have to spend this money now, so we're just returning that, in this case $14 million, to government," Kinew said.

The province is also realizing $16.3 million in savings by scaling back on a planned stockpiling of personal protective equipment supplies and $5.8 million in reduced expenses because only a small number of the health-care workers recruited through a recent international trip to the Philippines have arrived so far.

Redirect savings to new promises

The government will redirect the money toward new commitments, all within the current fiscal year: an estimated $82 million will cover the loss of the provincial gas tax for the first three months of 2024, $10 million will go toward additional health-care costs, such as more hospital beds, and $31 million on temporary accommodations for people who are homeless and new arrivals on temporary visas.

Meanwhile, the province will undertake a financial review of the organizations under its purview that are overspending their budgets, particularly in health care. The province will examine capital projects and operational expenses.

They'll also review spending in all government departments. Sala said the finance department has saved $2.6 million by cancelling conference trips and audit fees. 

"I would say that we have an expectation that if you've missed your budget by hundreds of millions of dollars, then senior executives will be very judicious with their spending," Kinew said.

None of the savings, however, will be directed toward reducing the deficit, which is the highest shortfall in the province's history outside of the COVID-19 pandemic.

The $1.6-billion deficit is more than quadruple the estimated number in the spring.

The Progressive Conservatives are continuing to allege the NDP is inflating the deficit number to make them, as the former government, look bad.

"If the deficit was what they claim it to be, why not apply that $125 million dollars [in savings] to the deficit?" PC finance critic Obby Khan said.

He also said the NDP is setting the stage to eventually hike taxes and cut services. 

Kinew said his government hadn't made any changes to its election promises. It is still committed to keeping tax cuts from the previous PC government and balancing the budget within four years in office.

"I think it's important that, as part of a balanced approach where we invest in health care, we're balanced with the books, that we're also offering predictability," Kinew said.

"Because you have households who have made their financial decisions for the coming year, and we can't pull the rug out from underneath you."

The Canadian Centre for Policy Alternatives, along with some unions, issued an open letter Wednesday urging the premier to backtrack on his planned tax cuts.

"Any realistic path forward that honours your election commitments entails exploring means of shoring up revenue. It also means extending your timeline to return the budget to balance given the shockingly high deficit and deep cuts inflicted on public services in Manitoba," the letter said.