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Time to judge government by its actions

Author: Todd MacKay 2016/09/27

Governments are judged by their actions and there’s been a lot of action coming from the Manitoba government lately.

First, there’s the decision to stop Liquor and Lotteries from moving into a new downtown headquarters. The move was projected to cost at least $75 million. The previous government said it would save nearly $24 million over 20 years.

Critics demanded to know why the government didn’t want to save money.

“The savings of almost $24 million … is now down the toilet,” said NDP MLA Ted Marcelino.

But the move was projected to cost $75 million and everyone who’s done a home renovation knows what happens to projected costs.

“Net savings from this project are negated by the risks of construction cost over-runs,” said Liquor and Lotteries Chair Polly Craik.

In other words, Liquor and Lotteries concluded the move would be a money-loser and it would be better to focus on selling six packs and scratch cards rather than renovating commercial real estate.

Second, the government is refocusing its plan to build the East Side Road to provide year-round road access for northern communities on the east side of Lake Winnipeg.

The auditor general blasted the East Side Road Authority for spending millions on training and capacity building within First Nations communities without proper accountability measures. Premier Brian Pallister had already shut down the authority and given its responsibilities to the infrastructure department, but now he’s refocusing the project on road building.

Critics wondered what would happen without the social engineering.

“The only jobs for these 13 First Nations communities will be low-skilled jobs,” said interim NDP leader Flor Marcelino.

People from those communities saw things differently.

“All that people were given were shovels to dig holes; we know how to dig holes,” said Steve Berens, from Berens River First Nation, of the social projects.

The Manitoba government will now use road building money to build roads. Local businesses are welcome to bid on the work, but they’ll be paid for that work rather than bureaucratically-defined social outcomes.

Third, there’s the admission that Manitoba Hydro has wasted nearly a billion dollars building the Bipole III transmission line on an inexplicably long route and racked up dangerously large amounts of debt. Despite this admission, the government isn’t slamming on the brakes.

“The Bipole III project is much further along than we were initially led to believe, meaning that a review, delay or contemplation of rerouting would only increase the costs levied on Manitobans,” said Crown Service Minister Ron Schuler.

Hydro’s debt will soar to $25 billion within four years. Even at historically low interest rates, that debt will cost Manitobans more than $600 million per year in interest costs. Hydro has projected 4 per cent rate increases every year, but higher hikes are likely.

NDP MLA James Allum said Premier Pallister is “fear-mongering” and the assessment of Hydro’s situation is “a political farce.”

S&P Global is an international bond rating agency and it’s entirely unfarcical.

“The downgrade reflects our assessment of the significant rise in Manitoba’s debt burden,” wrote S&P Global when it downgraded Manitoba’s credit rating. “This stems from the province’s ongoing fiscal shortfalls and significant debt on-lent to Hydro, which we no longer consider self-supporting.”

In other words, the bond rating agency is worried Hydro is borrowing so much it may have trouble making payments and leave taxpayers on the hook.

There’s a lot of work left to do on the Hydro file. Construction will continue. And a billion-dollar mistake merits an independent investigation. But at least this admission gives taxpayers some confidence Hydro won’t be attempting new debt-fueled megaprojects.

The new Manitoba government’s track record is becoming clear. It’s not arbitrarily halting every project initiated by the previous government. Nor is it rubber stamping past decisions. It’s weighing each decision and making the best of bad situations.


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