Manitoba Tories may duck cabinet pay cut under balanced budget law

Cabinet ministers in Manitoba's new Progressive Conservative government may escape a mandatory pay cut as they try to balance the budget over the next eight years.

The government is suspending the province's balanced-budget law and plans to introduce a new one next year. Finance Minister Cameron Friesen would not commit Wednesday to reinstating a section that cuts the pay of all cabinet ministers every time the government runs a deficit.

The reason, Friesen said, is the Tories inherited a $1 billion deficit from the previous NDP government in the April 19 provincial election.

• Brian Pallister and PC government table first budget today
• Mild criticism for new PC government's fiscal debut

"We're going to ... have to incorporate in any new bill we bring both those meaningful penalties in place for members, but also understand that we're starting out with a billion-dollar deficit."

Friesen indicated there may be two sets of rules under the new law one for the eight-year period in which the Tories have promised to balance the budget, and another for the ensuing years.

"There's going to be a conversation around what we do in the interim period in which we are trying to arrive back in balance, and there will be a conversation about what we do once we achieve balance."

The consequences "would have to be reasonable."

Liberal finance critic Jon Gerrard accused the Tories of hypocrisy because while in opposition, they criticized the NDP government for watering down penalties under the balanced-budget law.

"Turnaround is fair and now that the Conservatives are in government, if they're not going to balance the budget, ministers should have pay cuts too," Gerrard said.

The Tories should also be able to put an end to deficits within four years instead of eight, he suggested.

All cabinet ministers are supposed to see the ministerial portion of their salary not the base pay given to all legislature members cut by 20 per cent the first time a government runs a deficit. At current salary levels, the cut works out to $10,186.

Any consecutive deficits cause the pay cut to jump to 40 per cent.

The NDP changed the law when it started running deficits in 2010 to cap the penalty at 20 per cent.

The law does grant a one-year grace period for new governments that inherit a deficit. Gerrard said that should be enough for the Tories.