The Manitoba government keeps hoping it’ll find the money to balance its endless deficits. The finger-crossing seemed to pay off in the second quarter financials as it turned out the government actually collected millions in unexpected revenue.

But the deficit didn’t go down. It didn’t even hold steady. Manitoba’s spending is so out of control that the deficit actually went up despite a surprise dump of cash.

First the good news.

The Manitoba government budgeted for just under $15 billion in revenue. Half way through the year, revenues are projected to be higher by $86 million. The government’s original budget projected a deficit of $422 million – the extra revenue isn’t enough to balance the budget, but it should help.

Now the bad news.

The Manitoba government budgeted to spend more than $15.5 billion. After only six months, Manitoba’s expenses are $214 million over budget.

Here’s the bottom line. Manitoba’s deficit for this year has soared from $422 million to $550 million even though the government found millions in new revenue. And the year is only half over.

The government spinners had to dig deep to find an upside.

“Half of government departments [are] projecting to come in on or under budget,” bragged the government’s release.
Pause. Let that sink in. It means half of the government’s departments are blowing their budgets. Shouldn’t the government have something to say about that?

Finance Minister Greg Dewar shrugged.

“You hit some of the targets, [some] you don’t,” said Minister Dewar. He went on to say “[the deficit is] stubborn and it’s not going in the right direction.”

Apparently, Minister Dewar believes government budgeting is like little league. Just try hard. But sometimes the score goes the other way. What’s a finance minister to do?

The problem is that the province’s debt numbers are getting scary.

Manitoba’s total debt at the end of the last fiscal year was $33.5 billion.

Manitoba’s debt is projected to be $36.3 billion by the end of this year.

Minister Dewar may be turning a blind eye to the situation, but lenders are watching closely. Moody’s, a bond rating agency, downgraded Manitoba’s credit rating this summer. That means the province’s future loans will cost more. And the province is already spending $842 million to cover the interest on its current debt.

This debt is not an act of nature. It’s the sum of a thousand small choices. And there are alternatives.

Saskatchewan’s facing even tougher decisions. The plunging price of oil means Saskatchewan is suddenly without hundreds of millions in revenue. That commodity volatility came at a particularly bad time as Saskatchewan had just embarked on $700 million of borrowing for infrastructure. Add it all up and Saskatchewan’s debt is projected to rise by nearly a billion dollars this year.

Premier Brad Wall responded by committing to trim spending. Saskatchewan’s opposition NDP also recommended cuts. And Saskatchewan is already starting to turn things around. It trimmed spending by more than a hundred million dollars in the first half of the year. There’s more work to do, but it’s a start.

The Manitoba government’s problem isn’t that it doesn’t have enough money – it is collecting $86 million more than it thought it would have just eight months ago. Had the government stuck to its spending plan, the deficit would be falling, not rising.

This rising deficit isn’t a mystically “stubborn” circumstance beyond our control. The situation is simple: the Manitoba government is spending too much money.