No sympathy for Selinger's budget blues

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WAYNE GLOWACKI / WINNIPEG FREE PRESS Premier Greg Selinger speaks to the media after delivering his state-of-the-province address at the convention centre Tuesday.

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   • Credibility deficit balloons

The Selinger government's decision to postpone balancing its books by another two years sent shivers through the business community Tuesday and sparked concerns of new tax hikes for Manitobans.

In a speech to nearly 1,000 people at a Winnipeg Chamber of Commerce luncheon, Premier Greg Selinger made only a fleeting reference to an admission to the Free Press that the province would be unable to avoid deficit budgets until 2016-17. (It had been saying it would escape red ink by 2014-15.)

But that didn't stop business leaders and the Conservative Opposition from weighing in on the implications of the government's new fiscal timetable.

Tory Leader Brian Pallister said the NDP government's problem is it can't control spending. It can't keep blaming last year's Assiniboine River flood for its fiscal woes, he said.

"It was supposed to be the flood of the century, not the excuse of the century," he told a news conference.

Pallister said last spring the government responded to its budget problems by handing Manitobans their highest tax increase in a quarter of a century. In the absence of assurances otherwise, he suggested next year's provincial budget could see more hikes.

"We believe that (the government's) high spending problem is a high tax problem for citizens of our province," he said.

At the Winnipeg Convention Centre, where the premier delivered his state-of-the-province address Tuesday, business leaders wondered what the shifting timeline for balancing the province's books meant for them.

Chamber president Dave Angus said he is "very concerned" about a delay in balancing the province's books. He said as deficits persist, so does pressure for tax hikes.

But he said that's the last thing Manitoba businesses need as they and individual Manitobans are already taxed at a higher rate than their counterparts in Saskatchewan and Alberta, creating a competitive imbalance.

"We have concerns about the continuation of a fiscal framework here in Manitoba that we believe is not where we need to be," said Angus. He added the province needs to make long-term commitments on tax relief to boost business confidence.

Selinger told the audience Manitoba is not alone in having to reset its sights for balancing the government's books. He noted most provinces and the federal government are in the same situation. The problem is a global economy that's been in the doldrums for an inordinate length of time, he said.

Jim Carr, president and CEO of the Business Council of Manitoba, said that after more than three terms in office, the NDP should know the internal workings of government well enough to be able to ferret out more cost savings.

"I understand that Manitoba is not an island within the world of economic turmoil but the name of the game is focus and discipline," he said.

Finance Minister Stan Struthers said Tuesday the province will be releasing its most up-to-date numbers on its finances shortly before Christmas.

In the meantime, he's meeting with his provincial counterparts in Toronto on Friday and federal Finance Minister Jim Flaherty in Ottawa on Sunday to discuss the economy.

Struthers added the province believes it's still owed roughly $350 million from Ottawa as part of federal cost-sharing programs in fighting the 2011 flood. That money should flow to the province, depending on how negotiations progress, over the next year or so.

"We're going to continue to get on Ottawa's case to make sure they come through with the rest," he said.

Colin Craig, prairie director for the Canadian Taxpayers Federation, said after Selinger's speech the NDP have only themselves to blame by not containing spending when times were good and government finances were in surplus.

Craig cited "luxury projects" like a new park at the Red River Floodway when Birds Hill Provincial Park is so close and the "huge bureaucracy" that is the provincial public service.

He said the province could save $1 billion a year by trimming its workforce.

"In the past five years they've grown it by 1,200 and now they say they're going to cut it by 600 and they're expecting applause," Craig said, adding projected increases in health-care spending due to an older population will put further pressure on the NDP to spend money it doesn't have.

"We've done nothing to save for that," he said.

larry.kusch@freepress.mb.ca bruce.owen@freepress.mb.ca

Province to assist

in business transfers

THE Manitoba government will help retiring entrepreneurs transfer their businesses to the next generation by creating an agency devoted to the cause.

The Manitoba Business Succession Resource Centre will assist workers in small- and medium-size businesses to take over the operation when an owner retires, Premier Greg Selinger said Tuesday. The province will also offer a tax credit to assist with ownership transfers.

Selinger said it's estimated 40 per cent of owners of small- and medium-size businesses plan to retire in the next five years.

Meanwhile, the premier repeated a promise -- first made in November's throne speech -- to grow the provincial labour force by 75,000 people over the next eight years.

Selinger has asked his Economic Advisory Council, chaired by Free Press co-owner Bob Silver and labour rep Robert Ziegler, to convene a skills summit to map out a strategy for achieving the ambitious job-creation goal.

The summit will address education and training needs and how to provide job opportunities for the Métis and First Nation communities. It will also discuss how to ensure the province's successful immigration program continues to grow.

Republished from the Winnipeg Free Press print edition December 12, 2012 A4