WINNIPEG: The Canadian Taxpayers Federation (CTF) today responded to reports that the NDP government plans to invoke section 3(2)(a) of the Balanced Budget, Debt Repayment and Taxpayer Accountability Act. This portion of the Act states: "the government is not required to post a positive balance if an expenditure required in the fiscal year as a result of a natural or other disaster in Manitoba that could not have been anticipated and affects the province or a region of the province in a manner that is of urgent public concern."
Manitoba's Balanced Budget law is widely considered to be the most effective and comprehensive taxpayer protection law in the country on the account of stiff penalties to politicians and the wide scope of the law. This legislation includes real enforcement mechanism which would dock the pay of provincial cabinet ministers by 20 per cent if a deficit is incurred in one year, and 40 per cent if a deficit is carried over two or more years. In 1994 CTF researchers went to work drafting model taxpayer protection legislation that would broadly do three things:
- Require budgets be balanced by law;
- Impose financial penalties on politicians for non-compliance; and
- Require voter approval for new or increased taxes.
CTF-led campaigns led to laws meeting these three criteria in Manitoba (1995) and Ontario (1999). "For the NDP government to use this important piece of legislation to justify their over-spending is not only irresponsible, it is completely misguided," stated Provincial Director Adrienne Batra.
"The finance minister is blaming BSE, forest fires and fewer federal transfers to allow the province to keep certain costs off the books of the Operating Fund and legally run a deficit," stated Provincial Director Adrienne Batra. "Year after year the CTF raises concerns about the growth in provincial government spending. The situation has become so bad, that we are again in a deficit situation in Manitoba." As a percentage of Manitoba's GDP, provincial government spending this year stands at 21 per cent, the highest proportion of the four western provinces and in stark contrast to ten years ago, when Manitoba had the lowest proportion in the west.
According to a TD Economics report on Canadian government finances, Manitoba's revenues have increased by nearly $1 billion since 1999, yet expenditures have increased at a higher rate. In 1999/00 the province took in over $6.3 billion, but spent $6.4 billion. By 2003/04 revenues were $7.2billion and spending was $7.3 billion. "You don't need a Ph.D. in economics to figure out that if you spend more than you take in, at some point you're going to break the bank," added Batra.
The CTF's 2004/05 pre-budget recommendations called for a 10 per cent reduction in most government departments, retaining indexed increases in health and education. This results in $297 million in savings. "If health and education are going to be the NDP government's main focus, then increased costs to these departments must be offset with reductions in other non-priority areas," stated Batra. "However increased health costs should also be cause for alarm, it is incumbent upon this government to do whatever they can to find efficiencies within the system, a full value for money audit of our health care system would be a start."
"Depending on which approach is adopted by the government, a combination of staff and service reductions could accomplish many of the savings. However, a more fundamental analysis of government's role may be appropriate. Manitobans do not expect their provincial government to be all things to all people - they expect it to work. Invoking a rarely used clause from what is arguably Manitoba's most important piece of legislation as a means to support this government's spending habit is going to come back to haunt taxpayers," concluded Batra.