Manitoba government prepares plan to deal with larger deficit as legislature breaks

WINNIPEG -

Manitoba's NDP government plans to review some of the commitments made by the former Progressive Conservative government in order to address a larger-than-expected deficit, Premier Wab Kinew said Thursday.

"We are going to be pulling back on certain areas where we need to tighten our belt as government," Kinew told reporters after delivering his annual state of the province speech to the Winnipeg Chamber of Commerce.

"Because of vacant positions or initiatives that didn't get off the ground, we're able just to hold those initiatives back. In other areas, it has to do with commitments that were made which the leg work was never done to be able to deliver on."

Kinew said details are to be revealed next week as part of a broader plan to finish the fiscal year.

Earlier this week, the government said the provincial deficit is now forecast to reach $1.6 billion -- more than four times the original prediction. Kinew and his finance minister blamed the former Tory government, accusing it of making promises and spending commitments without setting aside money in the run-up to the Oct. 3 election.

The Tories have shot back and have accused the NDP of overstating the deficit projection to score political points. The new deficit figures include a sharp drop in corporate and personal income tax revenues, which the Tories say runs contrary to the healthy economy.

"Key economic indicators were very positive in the recent report that came out," Tory Leader Heather Stefanson said.

Kinew said despite the extra red ink, the NDP is committed to fulfilling its election promises, including a one-year freeze on hydroelectric rates. There is still no firm timeline, however, for implementing the freeze at Crown-owned Manitoba Hydro.

"We've just appointed a new board, so we want the board to come up with a multi-year forecast and financial plan for Hydro," Kinew said.

"Likely that'll be a three-year time horizon. Once we get that planning, then I think we'll be able to drill down into that election commitment."

Kinew's comments came a few hours before the legislature started its winter break.

The three-week fall sitting saw a few bills passed into law to fulfil NDP campaign promises. One suspends the provincial fuel tax for at least six months, starting Jan. 1. Another makes Orange Shirt Day on Sept. 30 a statutory holiday. A third recognizes Metis leader Louis Riel as Manitoba's honorary first premier.

The Tories, now in Opposition, managed to score a few points in the sitting. Backed by demands from snowmobile groups and agricultural producers, they pressed the government to amend its own bill and expand the fuel-tax cut to more vehicles.

The Tories are in rebuilding mode after the election loss. The party is in the process of setting rules for a leadership convention to replace Stefanson, who announced on election night she would step down as leader. Party delegates are scheduled to vote on changes in January.

Stefanson has said she will stay on while the party works out the rules. She gave no indication Thursday she would not be back when the legislature session resumes in March.

This report by The Canadian Press was first published Dec. 7, 2023