Manitoba·Analysis

Without firing a shot, PC government sets tone for its tenure

If politics has seasons, summer is definitely over for Manitoba's Progressive Conservatives.

Week saw scathing East Side Road Authority audit, Liquor and Lotteries HQ change and Hydro report

Pallister and his party made some pre-election noise about reviews by the Public Utilities Board and moving the Bipole III transmission line east, but once in government that quickly dissolved to calls for a sober review by a new Hydro board. (CBC)

If politics has seasons, summer is definitely over for Manitoba's Progressive Conservatives.

But the rookie government of Brian Pallister didn't fire the opening salvos of the fall. Those chores were left up to newly-minted board chairs at Manitoba Hydro and Liquor and Lotteries.

In the crosshairs were some of the legacy commitments of the previous NDP government. 

In short order Manitoba Liquor and Lotteries board chair Polly Craik and Manitoba Hydro chair Sandy Riley skewered a couple of social and financial engineering projects of the previous NDP government.

There would be no downtown Liquor and Lotteries HQ. The mandarins of sin will continue to be dispersed around the edges of Winnipeg. The $75-million price tag, in return for 400 or so employees in downtown, was deemed too high a price in a new Manitoba that is happening before your eyes.

In short, clipped sentences, Craik finished off any chance of a downtown headquarters. "We don't need it," she told reporters.

Sandwiched in between Liquor and Lotteries and Hydro announcements this week was a pretty scathing audit of the now disbanded East Side Road Authority.

When asked if there was sloppy accounting at the agency, Manitoba Auditor General Norm Ricard struggled with the question for minutes before settling on the phrase "weak administrative practices."  

Ricard wasn't in jeopardy of ruffling feathers at that point. The PC government had already ripped apart the Authority and pulled the operation of building the road into the Infrastructure department.

Manitoba Hydro is the big one 

The now completed review of a hydro transmission line Bipole III was a far deeper exercise, with much greater implications.

A glance at a Manitoba map dotted with two route options for Bipole III would get the most modestly observant to wonder about choosing the west side of Lake Winnipeg . It isn't the direct route. Full stop.

Polly Craik, chair of the Manitoba Liquor and Lotteries board of directors, says the Crown corporation reviewed its relocation plan and decided to abandon it due to cost concerns. (CBC)

But environmental issues and complex politics made the previous government get behind the west-side route, and by the time the saws started cutting and the anchors for the poles were going in, this was a force of nature hard to stop.

Pallister and his party made some pre-election noise about reviews by the Public Utilities Board and moving the line east, but once in government that quickly dissolved to calls for a sober review of the route by a new Hydro board. A Hydro board populated by people who read balance sheets for breakfast.

Despite promises, with $2 billion already committed to Bipole III west-side, the route was never, ever going to change. That part of Hydro chair Sandy Riley's presentation was, or shouldn't have been, any surprise.

What was surprising, or perhaps even unsettling, was Riley's surgical dismemberment of years of Hydro strategy and the direction it was given by the former NDP government.

On the massive Keeyask dam project, Riley wasted few words: "If we had been the board at the time we would have not proceeded with it, but the fact is we have."

Follow the red ink on Keeyask and Bipole III and all of Hydro's financial statements, and it was not a surprise to hear Finance Minister Cameron Friesen assert it has made bond buyers and credit-setters take a second look at Manitoba — and not with favourable eyes.

Selinger isn't here to sell anymore

In year-end interviews and even in casual interviews in the corridors of the Legislature, then Premier (and one-time finance minister) Greg Selinger maintained a consistent line on growing deficits and mounting debt.
Mb. Hydro Chair Sandy Riley sees rate-hikes as part of solution to fixing the company's books. (Sean Kavanagh CBC News)

The cost of borrowing is low, Selinger would assert. This is the time to take advantage of cheap rates and build legacy infrastructure, he would say.

But Selinger isn't around to address these issues now. His role in the new NDP opposition is to answer question about Francophone Affairs. Instead, the job fell twice this week to Tyndall Park MLA Ted Marcelino.

Tory accusations that Manitoba Hydro was awash in red ink at the behest of the previous NDP government were greeted by Marcelino's assertion that history would be the judge.

"We could not now second guess, look in the rear view mirror and say, 'Wow, you said $1 billion and it's now $4 [billion].'" said Marcelino. "Well, it's part of the decision-making process. You decide on the basis of the evidence."

Brace yourselves

Manitoba Hydro's huge capital spending requires both favourable weather to keep the water flowing through its dams, plus consistent and ever growing rate increases for electricity consumers. Board chair Sandy Riley wouldn't pin down where those increases will be, but a good wager is more than the projected 3.95 per cent planned for the next two years.

Finance Minister Cameron Friesen worries Manitoba's credit costs will rise. (Sean Kavanagh CBC News)

Manitoba Public Insurance is also looking for increases in premiums and there are rumblings the rates to insure your vehicle will go higher.

These are the kind of charges the PC government can step back from and claim are not tax increases. 

Like the bad news at Hydro or the reversal of the Liquor and Lotteries headquarters project, these are decisions where the new government claims it has no control over the process. 

However, there are now literally dozens and dozens of decisions waiting to be made on hundreds of millions in spending that can't so conveniently dropped on some semi-autonomous board or body. 

Manitoba is now very close to the time where voters will see exactly what kind of PC government is in power.  

ABOUT THE AUTHOR

Sean Kavanagh

Civic affairs - city hall reporter

Born and raised in Winnipeg, Sean has had a chance to live in some of Canada's other beautiful places (Whistler, B.C., and Lake of the Woods, Ont.) as well as in Europe and the United States. In more than 15 years of reporting, Sean has covered some of the seminal events in Manitoba, from floods to elections, including as the CBC's provincial affairs reporter.

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