Back in late December a supporter of the Canadian Taxpayers Federation (CTF) described a thought-provoking story about the future of Manitoba.

He described riding in an elevator at a large office tower at Portage and Main and overhearing a high-ranking business executive describe his Christmas plans to a colleague. The executive was particularly excited that a daughter in the United States and a son in Britain would be coming home for the holidays.

What was particularly interesting about the anecdote was our friend’s comment –“what happens when the guy in the elevator and his spouse pass away? His two kids are likely going to receive the inheritance, spend the money somewhere else and probably won’t come back to Winnipeg … certainly not nearly as often.”

The person retelling the story was making a good economic point. For too long, Manitoba has lost thousands of citizens to other provinces while policy makers have shrugged their shoulders. Thousands have fled to Alberta, British Columbia, Ontario and in recent years, Saskatchewan.

According to Statistics Canada, between 2003-04 and 2013-14, Manitoba lost 49,961 more people to other provinces than the number of people that moved to Manitoba from other provinces.

Some have tried to excuse the problem by noting the provinces that are poaching Manitobans have a higher cost of living. In many cases that’s true, but incomes are higher outside of Manitoba and taxes are lower. Private sector job opportunities are also often more abundant; entrepreneurs in other provinces pay less in taxes so they have more money to expand their businesses.

Manitoba used to be able to boast about its low cost of living and affordability of cottage country. The latter was a great selling feature – “move to Manitoba and you don’t have to be rich to own a nice cottage an hour away from Winnipeg.” However, the “low cost of living” and “affordable cottages” selling points have lost their shine.

The government has been busy raising taxes and making it harder for families to get by; sales taxes, income taxes (see secretive tax increases known as “bracket creep”), alcohol taxes and fuel taxes have all gone up. Not only have housing prices jumped substantially, so too have costly land transfer tax bills.

Rising property and school taxes have led to middle income cottage owners telling the CTF that they can no longer afford to keep cottages that have been in their family for generations.

Fortunately, some data from the Frontier Centre for Public Policy sheds a light on one way the province can turn things around. The Frontier Centre used Statistics Canada data to show that if Manitoba could merely get its bloated municipal and provincial government employment levels down to the national average, over $2 billion could be saved annually.

That’s enough to drop the PST down 7 per cent, eliminate school taxes, reduce income taxes and pay down some debt.

Fortunately, the government could downsize in a pain free way; as thousands of government employees retire in the years ahead, only replace the truly necessary positions.

If the government addresses such problems, taxes subsequently go down and entrepreneurs are able to create more opportunities, perhaps the guy in the elevator will have something more positive to talk about.

Colin Craig is the outgoing Prairie Director of the Canadian Taxpayers Federation