May 30, 2015


Analysis

NDP budget fails to generate business confidence

Manitoba Finance Minister Jennifer Howard answers media questions about the Provincial Budget at the Legislature in Winnipeg on Thursday.

JOHN WOODS / THE CANADIAN PRESS

Manitoba Finance Minister Jennifer Howard answers media questions about the Provincial Budget at the Legislature in Winnipeg on Thursday.

Budget 2014 had the opportunity to resurrect business confidence in this government -- confidence eroded with the assault on balanced-budget legislation and the PST increase. Unfortunately, for every step forward, this budget took two steps back.

Business requires assurance of the government's fiscal stability in order to make generational investments with confidence. A step forward was taken with the province's target to return the books to black in 2016. It stumbled backward with the ongoing drain on the rainy-day fund to the tune of $100 million this year and $55 million in 2015.

Business welcomes a reduced tax burden as a matter of policy. Yet the tinkering approach to taxation, highlighted by the $235 seniors school property-tax rebate and $250 increase in the basic income tax exemption, adds to business concerns this government cannot see the forest for the trees.

If Manitoba's economic growth is hitting 2.2 per cent and 2.4 per cent this year and next, it can be argued the rains have passed and the time to replenish the fund is now. A commitment to building and maintaining the rainy-day fund at five per cent of revenue, approximately $700 million, was needed to reignite business faith in the government's fiscal direction.

Other examples of positive steps forward include the limit on government spending to economic growth of two per cent, the creation of both the 'lean council' and Research Manitoba, and the investment in apprenticeship. These are, however, overshadowed by the missteps such as the failure to establish annual efficiency targets and an obsessive focus on process at the expense of meaningful outcomes.

The education components of the budget are cases in point -- lots of talk about hiring 50 more teachers and graduation rates, but nothing on whether our children are achieving success in math, sciences and language skills. These results are what matter when a company is looking at hiring your son or daughter.

The five-year infrastructure plan offered a promise of what Budget 2014 could have been -- a transparent, accountable, measurable plan based on extensive meaningful engagement with industry. Instead, we got an announced increase in the minimum wage that circumvents the established consultative process with business through the Labour Management Review Committee. We are guessing the recent letter asking for management input on the minimum wage can be returned to sender.

In the area of innovation, the budget again delivered hope for business. The enhancement of the Small Business Venture Capital Tax Credit to spur investment in small business -- the engine of our economy -- is applauded. The creation of Young Entrepreneurs Technology Grants has the potential to see the next generation of business visionaries set up shop and stay in Manitoba. Support to our young entrepreneurs is vital as the high-paying, innovative careers of the future are founded in the entrepreneurial spirit.

As with other elements of the budget, this one step forward can be tripped up by regulation and red tape. Business needed to see a hard and fast commitment in the budget to regulatory review, a pledge to address burdensome rules that limit investment and growth.

In a 2010 chamber survey, the second leading obstacle to growth in Manitoba was the current government's attitude to business and its needs.

Government is a partner for business to support not only corporate goals, but community goals. Business eagerly sought in Budget 2014 a vision forward that would define Manitoba as the best place to do business and institute a game plan that moves us in that direction. Budget 2014 stayed the course when the ship needed right-sizing.

In the year ahead, government must reach out to business to begin an honest examination and discussion of business' concerns and tangible, long-term solutions.

 

David Angus is president & CEO of the Winnipeg Chamber of Commerce.

Republished from the Winnipeg Free Press print edition March 7, 2014 0

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