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Don’t fear the voter

Author: 2016/01/22

Manitoba’s civil service is clearly worried. A no-layoff clause is the most prominent provision in a tentative deal between the Manitoba government and the 14,000 members of the Manitoba Government Employees’ Union. The deal is clearly meant to put minds at rest regardless of the next election’s outcome.

But it is not the result of the next election that should be keeping civil servants awake at night. The mathematical reality of Manitoba’s financial situation should be much more concerning. And there’s reason for hope: hard work now can avert eventual disaster.

First, let’s usher the partisan boogeyman out of the debate.

Alberta Premier Ralph Klein and Ontario Premier Mike Harris are the names often associated budget trimming. And yes, they were both Conservatives. But they were not the only ones who made difficult budgetary decisions.

As finance minister, Paul Martin tackled a spiraling deficit and soaring debt by making deep cuts. He reduced government spending by more than $25 billion and shrank the federal civil service by 45,000 positions. And he was a Liberal.

Saskatchewan Premier Roy Romanow is an even more striking example. From 1982 to 1991, Saskatchewan’s provincial debt went from zero to nearly $15 billion. Bond rating agencies knocked its credit rating down to BBB which meant there was a significant risk that the province couldn’t pay its bills. Romanow cut spending to the point that he closed 1,200 hospital beds. And, of course, he was a New Democrat.

Political philosophy of Martin and Romanow ultimately mattered little – they had to cut spending or risk financial ruin. Math is absolutely unpartisan.

This has important implications for Manitoba. The province’s financial trajectory is well known and it’s not good. The government is spending half a billion dollars more than it has. Its debt is nearly $36 billion. Interest payments on the debt will total $842 million this year. Moody’s, an international bond rating agency, recently downgraded Manitoba’s credit rating.

If Manitoba continues on its current path, cuts will come regardless of which party is in power. Whether it’s a Conservative like Mike Harris or a New Democrat like Roy Romanow, financial necessity will negate partisan philosophy. A no-layoff clause that provides false security today could force deep cuts in the future.

This is not, however, a reason for civil servants or anyone else to panic. Manitoba’s trajectory is bad, but its ultimate destination is not yet determined. We have a choice.

According to the Frontier Centre, Manitoba has one of Canada’s largest bureaucracies. Its financial weight is simply unsustainable. But if growth is curtailed through hiring freezes and reductions are implemented through retirements and other gradual steps, the situation will significantly improve. Realistically, some job loses will be unavoidable, but early action is the best way to prevent a future blizzard of pink slips.

The Progressive Conservatives and Liberals have both called for the government to get its budget under control, while the NDP has promised to keep its foot on the gas with spending. Voters will make an important choice in the coming election. But the result of that choice should not be the primary concern for Manitoba’s civil servants.

It’s the math that should worry Manitoba’s civil servants – either Manitoba will gradually shrink its government to an affordable size now or the harsh economic realities of soaring interest costs will impose much deeper cuts in the future.


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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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