‘Unsustainable’ deficits at Manitoba health authorities driven by wages, supply costs: audits

February 5, 2025 Canuck

Staffing and rising supply costs are the main factors behind “unsustainable” deficits discovered at most of Manitoba’s health authorities over the last several years, according to audits recently released by the province.

Three audits, done by consulting firms Deloitte and MNP for fiscal years starting in 2019-20 until 2023-24, span over 300 pages altogether and examine the governance, budgeting and fiscal management of Manitoba’s health authorities, except for Southern Health.

The audits included CancerCare Manitoba, which was the only agency that didn’t report year-after-year deficits from 2019 to 2023, the audits say.

Salaries and benefits, including a new collective agreement that gave Manitoba nurses retroactive pay bumps, were a major factor behind the deficits, according to the audits. Increased costs of medicine and other supplies also were a major factor.

The audits suggest the organizations use zero-based budgeting, which would see them start from scratch and then create a budget matching expenses with revenue.

While the organizations are expected to function within the annual budgets issued by the health minister, the audits say it has “become unsustainable” for them to do so on their own, and government intervention may be needed.

The ongoing deficits also put the NDP government’s goal of balancing the budget by 2027 at risk, the audits say.

Manitoba Health Minister Uzoma Asagwara said the audits reveal a culture of dysfunction at the audited health organizations, which has resulted in fiscal mismanagement.

“Over and over again, health authorities are spending their resources on the wrong things,” including private agency staff, administration and contracts with health providers outside Manitoba, the minister said at a news conference Wednesday.

Last month, the Manitoba government directed the Prairie Mountain Health Authority to cut private agency costs by 15 per cent. That came after the province ordered health authorities in December to redirect eight per cent of their administrative costs to the front lines.

2 health leaders replaced

Temporary leaders for the two largest health authorities were also announced on Wednesday.

Chris Christadoulou has been named interim CEO of Shared Health, Asagwara said. He’s replacing Lanette Siragusa, who served as head of the health authority since April 2023, after becoming a familiar face in Manitoba during the COVID-19 pandemic.

Jane Curtis, who agreed to leave her role as head of Southern Health, has been named interim CEO of the Winnipeg Regional Health Authority, said Asagwara, calling her an emotionally intelligent leader. Curtis replaces Mike Nader, who had been in the role since April 2021.

Asagwara said Southern Health was excluded from the audits because the health authority has a record of balanced budgets.

A woman wearing a black coat and white shirt speaks at a podium. — Jane Curtis, seen in a file photo, has been named the new interim CEO of the Winnipeg Regional Health Authority. The Southern Health authority had a record of balanced budgets under Curtis’s leadership, Asagwara said. (Ian Froese/CBC)

Asagwara also thanked Siragusa and Nader for their work, saying the leadership roles “are difficult public service positions, [and] these are two folks who I know care deeply about Manitobans.”

Kathleen Cook, the Progressive Conservative health critic, said she suspects Siragusa and Nader are “being scapegoated.”

She also said the province failed to commit to any of the recommendations in the reports or lay out a plan forward.

“I suspect that the news release today is laying the groundwork for what could be some very unpopular decisions,” she told reporters.

Staffing crisis unaddressed: union

The audits also recommend using the same software for Manitoba Health’s budgeting and forecasting across all health authorities in order to boost the speed, accuracy and transparency of their reporting.

They say Shared Health and the Winnipeg Regional Health Authority need stronger demand projections, as their annual planning processes are largely based on past costs and demand, which can result in the authorities being one to two years behind demand trends.

The audits also recommend that if either of those health authorities reports a quarterly deficit, both should be required to put forward a list of cost-saving measures equivalent to three times the reported deficit within 90 days.

During an unrelated news conference, Manitoba Premier Wab Kinew would not answer questions on how that recommendation could be achieved. He focused instead on his government’s mission to improve Manitoba’s health-care system, including its working culture and conditions.

When asked how the province plans to address rising staffing costs, Kinew touted an upcoming health-care announcement from his government on Friday.

“On the fiscal side of things, all we ask for from health-care leaders in the system is just give us good predictions about what your needs are going to be this year,” he said.

Kinew also faced questions about why the province decided to release over 300 pages of audits just a few minutes before the 10 a.m. news conference with Asagwara.

“We make ourselves available to the media to ask any question that they want. We’ve disclosed the results of the audits completely, and one thing’s for certain, today you can say we are taking decisive action to fix health care for you,” said Kinew.

Both Kinew and Asagwara accused the former Progressive Conservative government, which was defeated in October 2023, for the issues outlined in the audits.

Jason Linklater, president of the Manitoba Association of Health Care Professionals, says the audits show that Manitoba health care needs more accountability, along with better planning and co-ordination.

But “real culture change in health care” depends on addressing a staffing crisis, “and that’s not happening fast enough,” he said in an emailed statement.

Without increased provincial funding “to match growing service demand and staffing needs, they are just setting up health region leaders for continued failure,” Linklater’s statement said.

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Canada News

‘Unsustainable’ deficits at Manitoba health authorities driven by wages, supply costs: audits

2 health leaders replaced

Staffing crisis unaddressed: union

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