A doubly-shocking announcement of the Agassiz Youth Centre closure came months after news that Manitoba Developmental Centre is closing. A report was created for the Manitoba Government and General Employees' Union (MGEU) by the Georgetown Newberry Group (GNG) as to how this will affect Portage la Prairie financially. The effects could even ripple down to our housing market in the city.
Those are just two of the public sector employment organizations to experience employment reductions in Portage. The entire list includes: 1) Manitoba Developmental Centre; 2) Agassiz Youth Centre; 3) Red River College Polytechnic Stevenson Campus Southport; 4) Crown Lands and Property Agency; and 5) Addictions Foundation of Manitoba.
Wilf Falk is the former province's chief statistician, and held that position for 37 years. He retired in 2016 and now works with the Georgetown Newberry Group as a consultant. Falk says he prepared the report and outlines some of the highlights, or what some might choose to call lowlights.
"What the report is based on salaries of MGEU employees at these five organizations, of which the largest are the Manitoba Developmental Centre and the Agassiz Youth Centre," says Falk. "There are 456 employees currently at those five public sector organizations. Their wages and salaries, plus employee benefits, are $26.7 million. So, what the report does, it looks at what the impact is of giving employees nearly $27 million. And what the report shows is that 457.7 person-years of employment that are associated with paying those particular wages."
He says these employees get paid and some income tax is deducted, among other things, and they spend their money in the community.
"So, we've estimated there's an additional 67 jobs -- person-years -- that are associated with consumer spending," continues Falk. "I estimate that the provincial government will get about $4 million because of these wages. And the federal government and the local government in total get $10.1 million."
Falk emphasizes that this report significantly underestimates the total impact of the operations of these five organizations.
"First, we only have salaries for the MGEU employees," adds Falk. "So, management salaries and wages are excluded from that. Secondly, these organizations buy goods and services to run the operations. For example, Agassiz and the Manitoba Developmental Centre would buy food and beverages to feed their residents. We have excluded that because we couldn't get good quality information on that. I prefer not to put estimates in there that are unreliable. We've only gone with the wages where we have very good information."
He continues that the tail end of the report notes there could be a significant negative impact on the housing market.
"We don't know what's happening to us," says Falk. "For example, I was just talking about Agassiz. The minister of finance said that they're looking at maybe establishing some kind of Correctional Facility in the north. They may transfer some of these employees to the north. If those employees are transferred, I'm assuming that the vast majority own their own home, so you could see a lot of houses potentially coming on the market at the same time. What does that do to selling prices? But again, we don't know until it all settles out."
Falk explains that if 50 homes come up for sale in Portage, someone might be selling for $200,000 and be only offered $100,000 due to all the other homes they could check out.
"75 per cent or so of the Manitoba level impacts are due to residents of the city of Portage Prairie -- the employees who reside in the city of Portage Prairie," notes Falk. "To some degree, it's an impact at the Manitoba level, but it relates to the salaries paid to Portage la Prairie employees. In reference to Agassiz, some say they're going to transfer jobs to Headingley in Winnipeg. I've heard the minister quoted as saying there's going to be some kind of northern facility. That means, if it's in the north, you can't commute on a daily basis to Thompson from Portage la Prairie. You're going to have to move."
He notes travel to Winnipeg is realistic if you live in Portage, but he notes we have to see how it all transpires.
"But another small point is that not all of the income received for job losses will disappear," notes Falk. "I imagine a number of people who are eligible to retire may retire. So, you're not losing all that income. But it's a pretty significant potential hit to Portage la Prairie and the province."
Falk says the first three pages give all the gory details, so to speak, in shorthand form.
"I've tried to make the report not so esoteric, and it's pretty straightforward stuff," says Falk.