Should Government Legislate Balanced Budgets for Crown Corporations and Agencies?

Dorothy DobbieThe People's Voice

WINNIPEG, MB – “Departmental spending accounts for just 22 per cent of the overall government budget,” declared Finance Minister Cameron Friesen in a speech to the Manitoba Chamber of Commerce the day after the budget was announced March 12. The other 78 per cent? That is spent by Crown corporations and agencies.

These Crown operations have no accountability within the budget process. If they overspend, the government has to deal with it. Their overspending leeches money away from departmental operations and the ability of government to directly deliver needed services.

It’s time to deal with this.

The City of Winnipeg and all the municipalities are under legislation that prohibits them from having a deficit. Why would the rules be different for Crown operations? Perhaps it is time to pass the same type of legislation to govern the management of these corporations and agencies.

More, perhaps it is time to rethink the wisdom of delegating government responsibility in this area to third party organizations.

Everything has a season and the season for “business knows better” may be waning for a time. Back in the eighties and nineties and up until today, this has been the mantra. In an attempt to avoid the ultimate buildup of governmental inefficiencies and heavy bureaucracies, governments across Canada began divesting themselves of all sorts of former government responsibilities and services. And for a time, these new entities were reported to have served us well. But over time, these supposedly faster, leaner, meaner independent orgs learned that no matter what happened, they never had to pay the piper. Governments were like benign bankers, willingly forking over money no matter how egregious the shortfall.

Years ago, I was on a task force putting together a Crown agency. I was shocked to hear the chairman say of government instruction, “Don’t worry about that. As soon as we become a Crown we’ll be rid of them and then we can do what we want.”

Make no mistake. The clear goal of each of these entities is always to keep government out of the picture, to make autonomous decisions that don’t ultimately benefit the public – or its purse – and to build independent empires that are unassailable from a public point of view. If your politicians screw up, you can fire them at the polls. If these guys screw up, you are helpless – and so are the politicians because of the way the rules are written. Although some changes have been made with respect to how these agencies operate and how they must report to their minister, there is no limit on their ability to spend. Current law simply requires them to report.

They need to rewrite the rules.

Crowns should be forced to balance their budgets and where applicable, bring a net return to government coffers.


Power authorities worst offenders

The worst cases of overspending across the country right now are the power authorities. Consider that Manitoba Hydro’s borrowing needs exceed those of all other government agencies by a factor of three-plus, and it is not alone. Newfoundland, Ontario and Saskatchewan are all in the same boat. Manitoba Hydro has burdened Manitoba with a debt of over $13 billion which is expected to grow to $25 billion over the next five years. Their grasp of financial reality is extremely distorted, an affliction the corporations apparently find easy to visit on their boards which, no matter how experienced they might be in private business, seem compelled to rubber stamp whatever their deluded bureaucrats hand them.

The board of Manitoba Hydro it is reported resigned, en masse, when the government balked at agreeing to pay the Métis Federation $70 million as a “bribe” to ease the way to American markets (which don’t necessarily exist, anyway). You can hardly blame Brian Pallister for resisting this expenditure. How can a premier support this kind of giveaway in the face of Hydro’s demands for rate increases that would more than double hydro bills over the next five years?

WRHA employs twice the workers as total for all other departments

Hydro is not the only culprit. Another example is the Winnipeg Regional Health Authority that has consistently overspent its budget and yet delivers an inefficient, top-down service in a high handed and dictatorial manner. An example of inefficiency: A friend who can barely walk was referred by her family doc to a knee surgeon. The knee surgeon could not accommodate her with an appointment for one full year. Meanwhile, another friend told me that her knee surgeon could do three times as many surgeries as he currently gets but he is stymied by the WRHA’s triage system. Putting him and my first friend together resulted in her getting an appointment in just one week!

In 2016, the WRHA had an annual operating budget of nearly $2.6 billion dollars, which it overspent by $30 million. The CEO was rightfully fired. Consider that, according the Civil Service Commission of Manitoba, all the other government departments employed, in total, only 14,000 people throughout the province in 2017, half as many as WRHA, which employs over 28,000!

You should also know that the WRHA is also a granting agency, handing out about $30 million a year to other agencies. You see this in many, many Crown agency reports. Some do very little more that act as money disbursement centres for government. Why is that a good idea? It adds to the cost of government by adding an additional layer of authority and reducing the legitimacy of the elected members.

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