Across the country, Canadians are watching their pennies and wondering what impact the financial crisis in the United States will have on our lives. Although many economists are optimistic that the Canadian economy can weather the slowdown that our largest trading partner is experiencing, only time will tell to what extent we'll be affected.
Out east, we do know that Ontarians are already feeling the affects of the slowdown. In fact, the manufacturing sector in Ontario has already laid off thousands of workers and the Ontario economy is expected crawl with a growth rate of 0.8% this year.
In Alberta and Saskatchewan, commodity prices have played a big part in fueling their respectable economic growth. However, that doesn't mean to say that they're insulated. A prolonged, global slowdown could impact commodity sales and thus adversely effect our western neighbours.
So what does all this mean for Manitoba? Some will be quick to point out the fact that Manitoba's economy is expected to grow at 3.6% this year, the second highest rate in the country. Although that is a very positive sign, we need to keep a few other facts in mind.
According to the 2008/09 provincial budget, 36.7% of the government's revenue will come in the form of handouts from other governments - the third highest rate in the country. This year alone, "have" provinces like Alberta, Ontario, Saskatchewan and B.C. will provide over $2 billion to our provincial government through equalization payments.
What can't be ignored is the fact that those payments are calculated on a formula that essentially means -- when those provinces do well, they share some of their wealth with Manitoba. As you can see, although Manitoba's economic growth outlook looks strong, provincial government revenue will be impacted by how well our neighbours weather the global downturn.
Another consideration during these uncertain times is to look at government spending priorities. Right now, politicians in Manitoba are considering over half a billion dollars of optional infrastructure projects. Yes, that's right, between a new football stadium ($35 million), bus rapid transit corridor ($327 million) and the convention centre's expansion ($193 million), over half a billion tax dollars are being sought in one form or another.
While roads, education and health care are examples of essential services that help ensure commerce can continue to take place, the three mega projects currently being considered by our elected officials are optional.
Unfortunately for taxpayers, there has been no public forum or referendum on any of those projects. With the federal election's voting day just around the corner, wouldn't it have been simple to give voters an extra ballot and ask them to vote on these projects too? Although, the window for organizing such an initiative has come and gone, the need for public approval on these projects has not.
Fortunately for Manitobans, our economy is diversified and is in a good position for uncertain times. However, just as Manitobans are being cautious with their finances, our governments should be too. If they're not prepared to do it, then let taxpayers have a say through a referendum on those projects.
Colin Craig
Provincial Director, Manitoba
Canadian Taxpayers Federation
