Province loosens the purse strings

Opinion

“Reserves are the things that have been most, sort of, affected by this freeze. So that’s likely a spot we’re going to need to go. It isn’t sort of, ‘free money.’ It is compensating for money that should have probably been there for years and it is in particular our reserves that had paid for that. So, you know, that will definitely have to be part of our conversation.”

— Brandon Mayor Jeff Fawcett

 

Following a series of funding announcements over the last several weeks, Manitoba suddenly finds itself awash in cash.

There are, of course, many reasons for this. In the province’s 2022-23 mid-year fiscal report last December, the Stefanson government noted that Manitoba had collected higher tax revenues than originally budgeted for.

Individual Income Tax revenue was $355 million higher than budget, and Corporation Income Tax revenue was up $135 million more than the original forecast, reflecting what the province called “higher than forecast economic growth.” On top of that, the Retail Sales Tax was forecast at $83 million higher than budget, “reflecting higher consumer spending and higher prices.”

Also last December, the federal government announced that it would increase federal funding transfers to Manitoba to $5,881 million for 2023-24 in accordance with the Federal-Provincial Fiscal Arrangements Act — an increase of $733 million over 2022-23.

And just yesterday, it was announced that the Manitoba and federal governments have struck an agreement on a deal that will see more than $6 billion in health-care funding be flowed to the province. According to a report by The Canadian Press, most of that will be through increased annual health-care transfer payments, with about $1.2 billion under the bilateral agreement focusing on shared health-care priority areas, which are to be determined.

With a budget coming down in early March, this infusion of cash will allow the Progressive Conservatives a fiscal life raft in a year that will see the province go to the polls for a provincial election come the fall.

The numbers must be good — just yesterday, Manitoba Premier Heather Stefanson ended a more than seven-year freeze on municipal funding with a $47-million bump in unconditional cash. That extra cash also seems to have become the new baseline funding for municipalities for 2024 “and beyond,” as Brandon Coun. Bruce Luebke tweeted out on Friday morning.

“There is also a newly modernized grant formula that is more transparent and streamlined,” Luebke wrote.

While this is clearly good news for cash-strapped rural and urban municipalities, which have been trying to get the province to loosen its purse strings for years, it seems our municipal officials may be forgetting who shut off the faucets in the first place.

Manitoba is indeed awash in cash, but the Stefanson government is swimming in a sea of political desperation. Well behind in all recent political polls, the Tories had hoped that a new leader would have flipped the script somewhat and given the party a little breathing room — not to mention a bump in said polls. But that hasn’t happened.

In fact, it’s hard not to look at the sheer size and number of funding announcements coming out of the province these days as a cynical attempt by the Stefanson government to buy the silence of municipal officials and school division trustees in the march toward October’s election.

Recall that it was just a few weeks ago that the province announced a $100.2-million increase in education funding for the coming school year, with the Brandon School Division receiving a $6.3-million boost.

Had a proper funding plan been in place before the Tories moved to reduce property taxes, this wouldn’t have been necessary. But it’s also true that good news headlines make for good politics. And throwing cash around in an election year is an old ploy. We’ll have to see how well memories can be washed away with a little cash.

For the record, we’re glad to see that Brandon’s mayor wants to use this extra cash to replenish our city’s diminishing reserves. Fawcett is not wrong when he says that the province’s municipal funding freeze has forced the city to dip into its cash reserves.

After all, if the Tories are lucky enough to be re-elected back into government, who knows how long these newfound windfalls will last.