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NDP Take a Page off Taxpayer's Agenda

Author: Victor Vrsnik 2002/06/24
Lightning struck twice this week as the Canadian Taxpayers Federation found itself complementing the Doer government for following up on two pivotal CTF recommendations.

The first involves the status of Venture Manitoba Tours, a financially troubled crown corporation that runs the Hekla Island Resort and the Falcon Lake Golf Course.

The CTF and its surveyed members have long called for the sale of Venture. Now word has it that a provincial working group is exploring options including the sale or lease of Venture to the private sector.

Seems like a no brainer. Why on earth is the province in the hotel and golf business in the first place Is the province so short of entrepreneurs to justify the government's continued ownership and management of tourist resorts

Anyone who likes the idea of politicians running our hotels and golf courses is likely to favour nationalization of Popsicle stands as well.

The arms-length Crown Corporations Council's review of Venture pretty much summed it up why governments should not meddle in businesses that are best suited to the private sector.

"Council's overall assessment of risk remains High with a Negative trend-.Venture continues to face long term operational and financial challenges."

Selling off Venture would be a stroke of genius for the NDP who could deflect the criticism that the party is ideologically opposed to privatizations. And besides, a little common sense on the fiscal front wouldn't hurt either.

Then out of nowhere, like a bolt from the blue, the Manitoba NDP issue a news release denouncing business subsidies. After awarding a multi-million aid package to keep a bus manufacturer from leaving Winnipeg, the Doer government is taking the moral high ground on the inequities of business subsidies.

"Reducing business subsidies and creating a level playing field is critical to creating a good business climate in all provinces," said Industry, Trade and Mines Minister MaryAnn Mihychuk.

Wow! What could have been a scripted line for a CTF communications director is now stated policy for the Manitoba government.

The province took the critical first step toward the reduction of costly and inefficient business subsidies at the internal trade minister's meeting in Vancouver. Manitoba is pressing for an inter-provincial agreement to reduce subsides to business.

The CTF has actively fought against provincial and federal business subsidies and has repeatedly urged the province to make good on its pre-election promise to reduce its business subsidy programs by half. Over the past five years, the CTF released six landmark studies documenting the excessive waste of economic development programs.

To put its best foot forward, the province should press for a simple recommendation, namely that all governments outlaw all forms of business subsides and inducements. The province should also press for the elimination of industry-specific credits and firm-specific credits that are an indirect form of subsidy.

To improve the business climate, the provinces and federal government should offer competitive corporate income taxes as a tried and true policy for economic renewal. Specifically, Manitoba should replace its business subsidy structure with a phasing out of the payroll tax.

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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