Responsibility or austerity?

A look at the Government of Manitoba’s fiscal response to COVID-19

“What the pandemic has done is it’s torn back a veil and shown how rotten our support systems are.” - Dougald Lamont, leader of the Manitoba Liberal Party

Over the past few months, many Manitobans have surely wondered how the COVID-19 situation in Manitoba went from being one of the best in Canada during the summer months to being currently one of the worst. 

In fact, Manitoba went from having very few active cases in June and July to having, as of Jan. 11, one of the highest numbers of active cases in the country per 100,000 people (248, compared to Saskatchewan’s 316, currently the highest). Manitoba’s death rate is second only to Quebec’s. 

Manitobans are also facing a severe economic crisis, which is intertwined with the public-health crisis. The province’s gross domestic product is expected to decline significantly in 2020, and its unemployment rate increased, according to Government of Manitoba data.

Andrea Slobodian, a spokesperson for the provincial government, says the “government’s No. 1 priority is protecting our most vulnerable Manitobans from COVID-19 and ensuring our healthcare system is there for all Manitobans when they need it.”

“COVID-19 has created unprecedented fiscal and public-health challenges for Manitoba, and, in response, the Manitoba government has introduced measures to protect Manitobans and support local businesses,” she says.

“Manitoba has committed $3.2 billion in response to the health, social and economic impacts of the pandemic, which is the third-highest level of estimated per capita and as a percentage of gross domestic product support in the country,” Slobodian says. 

The funding includes the Pandemic Staffing Support Benefit ($10 million), the Safe Schools Fund and Safe Restart Contingency Fund ($185 million) and the Caregiver Wage Support Program ($35 million).

“Our focus remains on making life affordable for Manitobans and keeping taxes low while making record investments on healthcare, education and families,” she says.

However, the provincial government’s approach has been heavily criticized by many. Since becoming premier in 2016, Brian Pallister has focused on an agenda of so-called fiscal responsibility. Some have suggested that a lack of funding for essential services like healthcare has affected Manitoba’s ability to address the COVID-19 pandemic.

Manitoba Liberal Party leader Dougald Lamont says Manitoba’s disastrous second wave of the pandemic was, in part, caused by the government’s fiscal response.

Is austerity happening in Manitoba?

Austerity, as defined by Encyclopædia Britannica, is “a set of economic policies, usually consisting of tax increases, spending cuts or a combination of the two, used by governments to reduce budget deficits.” 

While reducing budget deficits is generally regarded as an important long-term goal, many economists, such as Nobel Prize winner Paul Krugman, have found that austerity measures usually are, in fact, harmful. In particular, they can affect growth and exacerbate inequality.

University of Manitoba economist Dr. Evelyn Forget, whose research focuses on healthcare policies, believes the term austerity accurately describes the current Manitoba provincial government’s policies. 

“Even before the pandemic, they were really quite fixated on reducing expenditure, reducing salary costs for civil servants, streamlining the civil service and eliminating jobs,” she says.

“I think they’ve certainly resisted hiring the people that they needed to hire in order to deal with the public-health issues.”

For instance, it is only recently that the government has posted an ad for a provincial COVID-19 immunization director.

While the fiscal policies of governments can often seem like they have no impact on peoples’ everyday lives, Forget points out a situation where such a policy directly affected many Manitobans.

“Some people who are collecting Employment and Income Assistance (EIA) in Manitoba qualified for the (Canadian Emergency Response Benefit),” she says.

“Some provinces allowed them to keep that money without reducing their EIA. Manitoba didn’t,” Forget says, adding that the government “actually clawed it back on a dollar-for-dollar basis.”

“They really did hurt the most vulnerable people in the province,” she says.

Part of the problem, Forget says, is the fiscal imbalance between the provinces and the federal government. In other words, Canadian provinces lack adequate revenue to provide adequate services. 

“Most of the provinces are in deep trouble, and Manitoba is one of those provinces that is running a structural deficit,” she says. “There needs to be a rebalancing of financial responsibilities between the provinces and the federal government.”

Especially now, during this current economic crisis, government revenues are down. However, it is unclear how the provincial government will deal with this situation.

When asked if Manitobans should expect spending cuts or tax hikes in the coming year, Slobodian says the provincial government “will continue to invest in Manitoba’s safe recovery and reinforce public health, as well as economic and fiscal resilience.”

“We will invest when and where it is needed, ensuring the public-health response and individual and business supports are in place,” she says.

“The Pallister government’s fiscal response has fallen short in many respects.” - Darlene Jackson, president of the Manitoba Nurse’s Union

How does fiscal policy affect healthcare?

Research conducted by the World Bank has shown that underfunding of healthcare and insufficient resource allocation in certain areas severely restricts the ability of jurisdictions to deal with COVID-19. Though, in Manitoba, there is essentially universal healthcare, many would argue that it is highly underfunded.

In the past few months, intensive-care units across the province have been nearing capacity, and various procedures not related to COVID-19 have been postponed. 

Darlene Jackson, president of the Manitoba Nurses Union, says “the Pallister government’s fiscal response has fallen short in many respects.”

“There simply (have) not been enough resources invested in the frontline to keep up with the COVID-19 hospitalization rates and case numbers,” she says.

“Throughout the healthcare system, the common thread is that a lack of resources and staff have hampered the pandemic response, and that more robust investment (was) needed, and still (is), to keep staff safe and reduce the spread of COVID-19,” Jackson says.

Other healthcare professionals have also been calling for more resources. In November, more than 200 Manitoba doctors wrote an open letter to Pallister, which brought forth their concerns and called for more action.

One positive development, according to Jackson, is the recently signed memorandum of agreement regarding personal protective equipment. 

“Under the new (memorandum of agreement), nurses will be automatically provided with an N95 respirator in more situations, instead of having to request one,” she says. “This now makes Manitoba a leader in Canada in terms of (personal protective equipment) access.”

Jackson also believes that lack of funding in previous years hampered the government’s ability to deal with the pandemic. 

“The healthcare system was already stretched thin before the pandemic,” she says, noting that “after three years of austerity and healthcare changes, there was little flex left in the system.”

Jackson adds that “the government should have used the summer months to build system capacity.”

“Instead, the government sat on their hands and ignored predictions that a second wave was coming,” she says.

Dougald Lamont, leader of the Manitoba Liberal Party and MLA for St. Boniface, says many of the flaws in Manitoba’s healthcare system are much more long-term.

“It’s not just this government,” he says.

He points to a cockroach infestation in Parkview Place, which was originally brought to the NDP’s attention in 2006, when they held government. This long-term care home is the site of one of the worst – and deadliest – COVID outbreaks in Manitoba so far.

“You have a 14-year cockroach infestation that was never dealt with under two governments,” Lamont says. “What the pandemic has done is it’s torn back a veil and shown how rotten our support systems are.”

Lamont believes that now is the time for governments to step up.

“Crises like this are one of the reasons that governments exist,” he says.

Lamont says Manitoba’s disastrous second wave of the pandemic was, in part, caused by the government’s fiscal response.

“By mid-August, the government had committed no new money to (going) back-to-school or personal-care homes,” he says.

It is during the autumn months, beginning with the back-to-school season in September, that the second wave of the pandemic hit Manitoba hard. Perhaps a higher level of funding could have allowed for things like smaller and more socially distant classrooms or more support for long-term care homes.

“Even before the pandemic (the PC government) were really quite fixated on reducing expenditure, reducing salary costs for civil servants, streamlining the civil service and eliminating jobs.” - Dr. Evelyn Forget, University of Manitoba economist

Where do we go from here?

Despite the fact that many have criticized the provincial government’s fiscal restraint in the past years, Slobodian says it has allowed them to better respond to the current crisis.

“The Manitoba government’s hard work and prudent budgeting since 2016 put it in a far stronger position to respond to unforeseen emergencies and much better prepared to face the COVID-19 health and economic crisis,” she says. 

As the vaccination process has begun, many Manitobans are more hopeful that 2021 will bring loosened restrictions, fewer COVID-19 cases, and a “return to normal.” However, even the vaccination rollout has not been without its flaws.

“There’s just been an ad posted for a COVID immunization provincial director,” Lamont says.

“The fact that they’re hiring for this now really tells you about how far behind we are,” he says, adding that “there should have been a plan in place a while ago.”

Earlier this month, Pallister shuffled his cabinet, which brought changes to key portfolios. Notably, Cameron Friesen, Minister of Health, Seniors and Active Living during the pandemic, was replaced by Heather Stefanson. Though Friesen remains in cabinet as Minister of Justice and Attorney General, many believe he was moved due to a poor handling of the pandemic. 

Perhaps this leadership change will bring a different approach. Regardless, healthcare professionals are urging Manitobans to “follow the fundamentals.”

“Nurses need Manitobans to keep doing their part,” Jackson says.

Published in Volume 75, Number 14 of The Uniter (January 13, 2021)

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