Cynical way of doing politics

Hey there, time traveller!
This article was published 23/12/2023 (740 days ago), so information in it may no longer be current.

On Dec. 5, Manitoba Premier Wab Kinew and finance minister Adrien Sala announced that the province’s projected deficit for the current fiscal year had quadrupled to $1.6 billion. If true — and that’s a big “if” — it would be the largest forecasted deficit in Manitoba’s history outside of the global COVID-19 pandemic.

The $1.6-billion estimate is certainly a big number, but it comes with an asterisk. That’s because more than $600 million of that figure is due to much lower-than-expected revenues at Manitoba Hydro, caused by much lower-than-expected water levels that prevented the Crown corporation from selling as much surplus electricity as had been budgeted for.

Bear in mind that the Hydro shortfall is a problem for Hydro’s balance sheet. It has nothing to do with core government expenditures, but inflates the government’s deficit because of summary accounting rules. Beyond that, it is a one-time figure relating to this year’s weather conditions. Next year’s revenues could be completely different.

Another $566 million of the $1.6-billion deficit figure is due to anticipated but unbudgeted health-care expenditures. While our NDP premier and finance minister are complaining about that amount adding to the deficit figure, are they suggesting the Stefanson government should have not spent that money to provide health-care services to Manitobans who needed them?

Are they suggesting they their government wouldn’t — and won’t — spend unbudgeted monies to alleviate the suffering of Manitobans? That may be exactly what they are saying. Keep reading.

Based on the Hydro deficit and the health-care overspend, we are already at more than $1.1 billion of the alleged “deficit,” but there’s more. Remember that the Kinew government just passed a six-month, 14 cent per litre, reduction in taxes paid on your gasoline purchases. That is expected to cost the government approximately $82 million in the current fiscal year. That moves the projected “deficit” number to almost $1.3 billion.

That reduces the real deficit for this year to somewhere around $300 million, which is lower than the Stefanson government predicted. It’s hardly the five-alarm situation that Kinew and Sala suggest.

That’s important to keep in mind, because Kinew, Sala and Health Minister Uzoma Asagwara have each used the torqued-up $1.6-billion figure in order to justify cuts that will impact the lives of Manitobans.

For example, Kinew and Sala announced $123 million in spending cuts last week, citing the $1.6-billion “deficit” as the reason the cuts are necessary. Those cuts include nearly $6 million for the recruitment of foreign nurses, more than $16 million for personal protective equipment, and $15 million from the disbanded diagnostic and surgical recovery task force (with no replacement to shorten wait times).

In reality, the money is being reallocated in order to pay for NDP campaign promises, including the gas tax holiday.

This past Monday, the Manitoba Nurses Union sounded the alarm about overcrowding in the ER at the Health Sciences Centre in Winnipeg, saying that “HSC’s ER is drowning. Wait times are 30+ hours. We’re now moving patients to unmonitored hallways to make room for critical patients. These are practices we’ve never stooped to before, and to be clear, not a single nurse is comfortable with this. Someone will die unnecessarily.”

In response, Asagwara blamed the crisis on the Pallister government’s conversion of three Winnipeg ERs into urgent care centres, along with the alleged $1.6 billion deficit left by the Stefanson government. What the minister didn’t do, however, was announce any measures that would make the ER situation less dangerous for patients and less stressful for the health-care professionals who care for them.

In other words, they used the $1.6-billion “deficit” fiction as an excuse for doing nothing about a situation that, according to the nurses union, could cause preventable deaths.

That’s bad, but it gets even worse. On Tuesday, Asagwara announced that the government has suspended several health-care capital projects, including personal care home projects that had already been announced, while it reviews the province’s finances and health-care needs. Those projects would have added a total of 670 much-needed beds to the system.

Asagwara told the media that the review is needed in part because of the $1.6-billion “deficit,” adding that “It’s a pretty big financial mess that our government has to clean up while also making sure that we’re investing in and strengthening health care.”

Conspicuously absent from Asagwara’s two statements this week, and from Kinew and Sala’s remarks last week is the fact that the government was aware that its equalization payments were about to increase by $842 million. As was reported this past Thursday, Kinew has admitted that he was aware, when he and Sala announced the $123 million in spending cuts, that the equalization transfer would rise by “as much as 20 per cent.”

That means Asagwara — who is also the deputy premier — was likely also aware of the massive revenue boost when commenting about the ER crisis, and used the $1.6-billion deficit fiction to justify the suspension of the personal care home projects.

It also means that the government knew the province’s fiscal situation isn’t nearly as bad as they said, yet they continued to use their “$1.6-billion deficit” spin in order to finance their gas tax holiday and justify spending cuts that will hurt Manitobans.

It’s a cynical way of doing politics, especially for government that has only been in office for less than three months.