News Releases

News Release - Manitoba

February 8, 2017

MANITOBA GOVERNMENT FUNDS HEALTH SAFETY AND SECURITY PROJECTS


Health Capital Projects to Reach Debt Level Ceiling in 2017-18, Making Difficult Decisions Necessary: Goertzen

The Manitoba government has approved 95 projects across the province to ensure safety and security requirements identified by the regional health authorities, Diagnostic Services of Manitoba (DSM), CancerCare Manitoba (CCMB) and the Addictions Foundation of Manitoba (AFM) are addressed, Health Seniors and Active Living Minister Kelvin Goertzen announced today.

“Replacement equipment, repairs to existing facilities, and upgrades to safety and security are necessary if we are to avoid the deterioration of buildings and other infrastructure within our health-care system.  Items left unrepaired run the risk of developing into more serious issues that could affect patient care and access to facilities by staff and visitors,” said Goertzen.  “As a first priority, we must ensure that our health-care facilities continue to meet provincial, national and international standards.” 

Finance Minister Cameron Friesen noted that planning, design and construction of capital projects, specialized equipment and information technology projects are paid for by funds borrowed by the province.  These funds must be paid back with interest, costs that increase as more projects are completed and repayment begins, he added. 

The majority of the projects announced today are included within the health department’s capital debt, which currently sits at $1.2 billion for completed health-sector projects.  The government sets an internal limit on the amount of health capital debt repayments each year to ensure the health department does not overcommit to capital projects and remains able to afford both payments on capital debt and day-to-day health services. 

This capital cap was introduced more than a decade ago and was raised most recently in 2009-10 to $189.5 million each year, where it remains.  Estimated principal and interest payments on the capital debt in 2016-17 are $155 million, added Friesen. 

“Manitoba is facing a challenging financial situation as a result of decisions by the previous administration to allow spending growth to outpace revenue growth year after year,” said Friesen.  “Costs associated with meeting the health-care needs of a growing and aging population are significant and compounded by the erosion of federal contributions to the costs of provincial health-care delivery.” 

Goertzen further noted that based upon the projected repayment costs for completed capital projects, the health department was notified in 2010 that total pressures of the capital program would exceed the capital cap.  The minister added that Manitoba Health will exceed its capital cap in 2017-18, making it necessary for several projects to be removed from the capital program.  Meetings with stakeholders will be taking place in the coming weeks to discuss the winding down of these projects. 

“The previous administration committed to many projects in late 2015 and early 2016 despite knowing the government’s limited ability to pay for either their construction or the operating budgets required to provide services at these new sites,” said Goertzen.  “This failure to plan has left our government with some very hard decisions to make about projects that were committed to, but not budgeted for, by the previous government.  While we are taking necessary steps to ensure the sustainability of our health-care system today and into the future, we understand this will be disappointing news.” 

The projects moving ahead, worth $30 million, are essential to maintaining the major physical assets of the health-care system and preventing any catastrophic event that could affect patient care and access to facilities, Goertzen said. 

Safety and security projects are exempt from the requirement of a community contribution and submissions are reviewed annually.  Projects are submitted by the regions, CCMB, DSM and AFM for funding consideration each year and are prioritized as individual projects in one of two categories:  projects under $150,000 and projects over $150,000 (see backgrounder). 

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BACKGROUND INFORMATION ATTACHED




Backgounder
Background Information - https://www.gov.mb.ca/asset_library/en/newslinks/2017/02/RLS-Health_Capital_BG-HL-FI.pdf