It’s always a bit odd to see two trucks stuck in the mud. Maybe the first driver didn’t know about the mud. But what was the second driver thinking?
It’s similarly baffling to watch the Federal Liberals campaigning on the same economic plan the Manitoba NDP has been running since 2009.
Canada’s economy has declined by 0.2 per cent and 0.1 per cent in the last two quarters and that qualifies as a recession. Liberal Leader Justin Trudeau is hitting the panic button and promising to run deficits of up to $10 billion per year for up to three years to kick start the economy. He says borrowing billions will create jobs.
Maybe Mr. Trudeau should take a look at the Manitoba NDP’s record. The province’s unemployment numbers have been stuck for years. And yet Manitoba continues to spin deeper and deeper into debt. It’s worth going back over the tracks to see how we got into this mess.
Back when Premier Greg Selinger was finance minister, he rolled out stimulus funding to create jobs. But he bragged that he wouldn’t have to borrow money.
“Most jurisdictions in Canada will fund stimulus through deficit,” said then Finance Minister Selinger when he delivered the 2009 Budget. He continued to say he would be “implementing initiatives that are sustainable within a balanced budget.”
His pride came before Manitoba’s fall back into the red.
In 2009, the deficit came in at $555 million. The economy declined by 0.9 per cent and unemployment was 5.2 per cent.
When Rosann Wowchuk took over as finance minister, she was honest enough to call her budget a deficit. But she promised to get the books balanced again within five years.
In 2010, the Manitoba’s deficit was $467 million. As with other provinces, the economy bounced back with 2.5 per cent GDP growth. But unemployment actually went up to 5.4 per cent.
Stan Struthers was the next one left holding the budget bag as finance minister. He increased the PST without the legally required referendum. He promised the budget would be balanced by 2016.
Even with millions more in revenue from the PST hike, Manitoba ran a deficit of $583 million in 2012. Unemployment was 5.3 per cent.
In 2014, the last full year of numbers available, Manitoba ran yet another deficit of $424 million. Guess what happened with economic growth and unemployment? Almost nothing. GDP growth was 2.4 per cent and unemployment was 5.4 per cent.
But now Grew Dewar is finance minister.
“Industry is telling us not to take our foot of the gas,” said Minister Dewar in his budget speech. “Our government also has a long-standing commitment to return to a balanced fiscal position.”
So he’s spinning further into debt, but the long-standing commitment to balanced budget will remain at a standstill for the foreseeable future.
Maybe the Ministry of Finance’s own numbers aren’t convincing enough. Maybe some outside perspective would help.
Moody’s, a bond rating agency, downgraded Manitoba’s credit rating this summer. DBRS, another rating agency, didn’t immediately move to downgrade, but stated the province has “weak fiscal discipline.” How did Minister Dewar respond?
“We have a plan,” said Minister Dewar. “Our plan is working.”
That’s an amazing statement.
But even more amazing is that, despite all of this, Mr. Trudeau is looking at Minister Dewar’s plan and nodding his head. He still believes that billions in new debt will create jobs and deficits are temporary. And he wants to run this plan nationwide.
Is Canada Off Track?
Canada has problems. You see them at gas station. You see them at the grocery store. You see them on your taxes.
Is anyone listening to you to find out where you think Canada’s off track and what you think we could do to make things better?
You can tell us what you think by filling out the survey