Cabinet ministers give themselves a break on pay cuts

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This article was published 19/03/2018 (2228 days ago), so information in it may no longer be current.

A year after rewriting the province’s balanced-budget law, the Pallister government is tinkering with it again.

Cabinet ministers would continue to see 20 per cent of their pay deducted if the government doesn’t meet certain deficit-reduction goals.

But, in a bill introduced Tuesday, Finance Minister Cameron Friesen proposes to allow ministers to recoup any pay they lose in a given year — as long as the deficit is entirely wiped out by the 2024-2025 fiscal year.

That would theoretically be at the end of the Progressive Conservatives’ second term in office, a date by which Pallister has long promised to put Manitoba’s books into the black.

The refunds would be paid whether the ministers who suffered the penalties were still in government or whether they were still alive. Their heirs would be contacted and payment would be made to them.

The new provision was one of several changes contained in Bill 27 (The Fiscal Responsibility and Taxpayer Protection Amendment Act). Other amendments would remove a disincentive to lowering the deficit by more than $100 million a year (the threshold below which cabinet ministers start losing pay) and to require that all salary reductions under the act be reported in the annual public accounts.

The bill also allows the government a one-time opportunity to adjust a deficit or surplus for the purposes of the act if revenues decline by more than $25 million due to changes in public sector accounting standards or what is included in calculating summary financial statements.

Friesen said it may be “a little administratively tricky” to locate former cabinet ministers down the road to rebate them for any monies deducted from them for not meeting their deficit targets. “But we felt if the exercise is about fairness to taxpayers we have to be fair on both sides of the equation.”

NDP Leader Wab Kinew wondered why Bill 27 and the act it is amending needed to be so complicated.

“Why wouldn’t they just pass a law that says if you run a deficit, you take a pay cut? That was the rule that was in place when they took office,” he said.

NDP cabinet ministers had seen their pay docked 20 per cent for running deficits, although the former administration amended previous legislation to keep ministers from facing even bigger pay cuts for repeated deficits.

The old legislation also allowed a one-year grace period for ministers of an incoming government for running a deficit. The Pallister government replaced the old act with the current law, which does not punish ministers as long as the deficit is reduced by $100 million annually.

Kinew said that was tantamount to the Pallister government giving the premier and his ministers a 20 per cent pay hike.

So far, the Progressive Conservatives have met the requirements of the new act. But if they run afoul of it in a given year, penalized cabinet ministers still have a chance to recoup their losses.

Kinew expressed scorn at that.

“Let it go,” he said. “That they should get a six-figure payout 10 years from now because the budget is balanced at some date to be determined — to me that doesn’t make a lot of sense.”

larry.kusch@freepress.mb.ca