PCs say they will ‘save’ Bombers by writing off stadium debt
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Hey there, time traveller!
This article was published 25/09/2018 (2186 days ago), so information in it may no longer be current.
The Progressive Conservative government is writing off $82 million worth of Blue Bombers stadium debt, claiming its action will “save” the team by placing it on a more secure financial footing.
Premier Brian Pallister and his finance minister called a news conference Wednesday to accuse the former NDP government of “cooking the books,” and forcing the Tories to make “significant contingency write-downs” in several areas.
Pallister said the former government left his administration with “unpaid bills, undisclosed obligations and dangerous deferrals.”
In addition to having to write off the Blue Bomber debt, the government said it discovered it had to absorb losses on loans to Child and Family Services agencies and make greater provisions for expenses in cleaning up contaminated sites.
“These are all examples of what I call stealth accounting — designed to mislead, designed to create a false impression,” Pallister said.
He said the stadium loan deal, which was reached under the NDP government, “was designed to fail the Bombers.”
Until this year, the club did not have to pay interest on the $82 million ‘Phase 2’ loan. With interest costs, its liability will climb to $4.4 million a year, the government said.
Write-downs announced by the Pallister government on Wednesday:
Blue Bombers – The government is writing off Phase 2 of the club’s Investors Group Field stadium loan. This amount is in addition to the previously confirmed $118.7 million Phase 1 write-off. The Phase 2 loan was to be repaid between 2014 and 2058. The Bombers were to start covering interest costs this year on the Phase 2 loan. That would have resulted in principal and interest costs totalling $4.4 million a year. The government says that is not sustainable for the team. It still expects the Bombers to make payments on the loan, but it is not clear now how much the team will have to pay.
Blue Bombers – The government is writing off Phase 2 of the club’s Investors Group Field stadium loan. This amount is in addition to the previously confirmed $118.7 million Phase 1 write-off. The Phase 2 loan was to be repaid between 2014 and 2058. The Bombers were to start covering interest costs this year on the Phase 2 loan. That would have resulted in principal and interest costs totalling $4.4 million a year. The government says that is not sustainable for the team. It still expects the Bombers to make payments on the loan, but it is not clear now how much the team will have to pay.
Advances to CFS agencies – The government says it is setting aside $30 million relating to “working capital advances” made previously to social services agencies. The provision is being made because the government has determined that there is “a high risk” that it won’t get the money back. For years, the previous NDP government allowed the advances to be issued as interest-free loans, with no repayment terms, the Tories say. The government says it is now “recognizing that the advances to these agencies were in fact grants, not loans.”
Contaminated site remediation – The government says the previous administration had made provision for $281 million to clean up contaminated land. But it says there was never a provision made for cost hikes due to inflation. It’s decided to earmark an additional $21.8 million to the clean-up fund.
Finance Minister Scott Fielding said high interest costs and ongoing stadium maintenance costs led the government to decide to write off the debt. He said the provincial auditor general agreed with the government’s action.
The Bomber debt and two other write-downs the PCs are blaming on NDP financial mismanagement total $133.8 million and will be reflected in the final accounting for the 2017-18 fiscal year. The government is set to release its audited financial statement for that fiscal year on Friday.
The write-downs mean the government will show less progress in battling its annual operating deficit.
Fielding said he wanted to assure Manitobans that the Bombers will still be required to make stadium payments. However, it is unclear how much the team will be required to pay.
“We want to protect taxpayers as much as we can,” the minister said.
The premier said the old stadium deal was forcing the club “to do the impossible.”
“It wouldn’t be an overstatement to say our decisions will help save the Bombers by making them sustainable financially,” he said.
In a statement, Bomber president and CEO Wade Miller said he agrees with the province that the team’s current loan deal is “unsustainable” in the long run.
“We look forward to working with the province and other stakeholders to arrive at a viable long-term solution for all parties,” he said.
Miller said the club has made “cumulative annual excess cash payments” totalling $17 million to Triple B (the consortium that owns the stadium) and will continue to meet its financial obligations and make the payments required under the current management agreement. (Triple B is comprised of the City of Winnipeg, the province, the University of Manitoba as well as the football team.)
NDP finance critic Matt Wiebe accused the premier of engaging in “political theatre” while refusing to produce numbers to back up his claims.
“The Winnipeg Blue Bombers, up to this point, have not said that they weren’t able to meet their obligations, and I think that’s important,” he said. “They’ve met their obligations up to this point and they haven’t made any assertion that they couldn’t continue to meet those obligations.”
Wiebe accused the government of attempting to make the province’s books look worse “to justify more cuts” to services.
larry.kusch@freepress.mb.ca
Larry Kusch
Legislature reporter
Larry Kusch didn’t know what he wanted to do with his life until he attended a high school newspaper editor’s workshop in Regina in the summer of 1969 and listened to a university student speak glowingly about the journalism program at Carleton University in Ottawa.
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