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The Manitoba government has quit on the deficit

Author: Todd MacKay 2016/03/11

Sometimes a team quits before the game is over. The score gets lopsided. Trash talk eclipses effort. Fans shake their heads.

The election writ has yet to drop, but the Manitoba government has already quit on the deficit. There will, of course, still be a campaign. Candidates will knock on doors. Votes will be counted. But any attempt at responsible budgeting has ended.

Manitoba’s projected deficit is now $773 million, according the latest provincial financial update. Three months ago, the second quarter update pegged the deficit at $550 million. The spring budget’s projected deficit was $422 million.

This is truly stunning. Governments facing an election usually do everything possible to minimize deficits. They certainly try to make sure the deficit is trending down to create some optimism for the future.

The Manitoba government obviously doesn’t care how big the deficit gets. It’s effectively given up on balancing the books. Worse, this isn’t even the end of the story. The deficit has grown by $351 million in six months. By the time the year-end books are done, it’s easy to imagine the deficit ballooning to a billion.

Despite soaring deficit numbers, the government has clearly failed to make any effort to restrain spending. Expenditures are over budget by $163 million.

And somehow, the government still has the audacity to propose a tax hike. It wants to raise taxes on Manitobans making $170,000 or more to collect nearly $50 million that it says it would give back to low- and middle-class people. It’s hard to imagine a commitment that could have less credibility on more fronts.

First, during the last election, Premier Greg Selinger promised not to raise taxes and called speculation that he’d raise the PST “total nonsense.” Then the government raised the PST from 7 per cent to 8 per cent without the legally required referendum. Now the government wants the majority of Manitobans to believe that only their rich neighbours will pay more tax. It would take willful ignorance to believe Premier Selinger would refrain from raising taxes on anyone and everyone.

Second, the government apparently wants people to believe that it cares about providing tax relief to low- and middle-income taxpayers. This must have been a divinely inspired epiphany of biblical proportions because until now this government has consistently treated low- and middle-income taxpayers with callous disregard. For years it has failed to adjust the basic income tax exemption to reflect inflation. Manitoba is one of only a small handful of provinces that still abuses taxpayers in this way. By failing to index Manitoba’s income tax system, the province forces Manitobans to start paying provincial taxes on income over $9,134 while Saskatchewanians can earn up to $15,843 before they start paying provincial income taxes. Then there’s the PST hike – it hurts the poor more than anyone else.

If this government is indeed feeling the urge to repent, it should cut the PST rather than pretending to play Robin Hood, but the government has long since given up on making the tough decisions required to provide real tax relief.

Sometimes we win. Sometimes we lose. And there is honour in effort regardless of outcome. But the Manitoba government has now ceased to make any attempt to responsibly manage the finances in this province.


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