Irresponsible Provincial Budget Shouldn't be a Surprise

This column originally ran in the Winnipeg Free Press on May 4, 2015 To be fair to Charlie Brown, Lucy always tells a creative new story to convince him to kick the football. Lucy’s audacity pales in comparison to Greg Selinger’s government. The NDP’s 2015-16 budget dispenses with even the flimsiest attempt to feign financial credibility.

This budget runs a deficit of $422 million. It shouldn’t be a surprise. The Manitoba government has been running deficits since 2009. Last week it said it will continue to run deficits until 2018. And yet, like Charlie Brown, there remained a small glimmer of hope that this government would deliver a slightly better result this time. But no, of course not, the government continues to make Manitoba’s mountain of debt even bigger. While brought low by this disappointment, it’s worth gazing up at that mountain of debt and considering its impact. Manitoba’s provincial debt will be $36 billion. That’s nearly $28,000 for every man, woman and child in the province. This year, Manitoba will spend $842 million on debt servicing costs alone. Let’s compare this mountain of debt to the government’s attempt to address the issue. The 1 per cent PST hike will deliver $286 million. That means the government’s debt servicing costs are about three times higher than the revenue generated by the PST hike. Those are the kind of numbers that force even the most optimistic supporter to walk away muttering: good grief.

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There’s no evidence the government has learned anything from this math. It’s now clear why the NDP considered a 2 per cent increase, but settled for 1 per cent. When asked if there would be further tax increases in the future, the government said probably not if the economy is good, but certainly left the door open. Given the government’s willingness to throw legislation into the shredder in order to hike the PST, it’s not hard to imagine rates going up again with the slightest excuse. The PST hike isn’t the solution. It’s hard to believe the NDP ever expected anyone to believe it would be, but it’s now indisputable. The PST hike was apparently necessary to increase revenues. Yet the deficit is still here. The PST hike is still here too. Even a second PST hike wouldn’t solve the problem. Given that the deficit problem remains firmly in place, any hope for a solution obviously rests on an effort to rein in spending. Surely the government could find some token waste to cut. But no, the government apparently views every single dollar it spends as indispensable and therefore impossible to cut. Not only that, the government increased spending in this budget by $289 million. If the government comes looking for sympathy regarding the impossibility of cutting spending, they will not find any among Manitoba families. The PST hike alone has cost Manitobans $220 per capita. That means a family of four has been forced to find almost $1,000 to cut out of their household budget and send to the provincial government. Like Charlie Brown, we’ve become wary. Maybe even cynical and jaded. But we should, if only out of politeness, listen to government’s explanation for the situation. The government points to falling oil prices. They blame the federal government because the provincial welfare cheque from the Equalization program is lower than they think it should be. Also, the government didn’t appreciate the federal move to make retirement savings more flexible, because now the province won’t be able to pull as much money from seniors’ pockets. To recap, in the search for someone to blame, the Manitoba government offers international commodity markets, the federal government and seniors. This provincial government is unwilling to take even a fractional share of the responsibility. Today Manitobans are paying $650 per capita every year in debt service costs alone. That’s not even paying down the principle on the $36 billion debt. That debt is being left for future generations. And the deficit is piling up another $422 million this year. Anyone who believes this government is willing to become fiscally responsible should consider trying out to replace Charlie Brown as the Peanuts place kicker. Todd MacKay is the Prairie Director for the Canadian Taxpayers Federation