Winnipeg Free Press - ONLINE EDITION
The $1.4-billion question
He’s the former mayor of Brandon, a former MP and now the Progressive Conservative MLA for Brandon West.
The gregarious Rick Borotsik is also a lot of fun to watch in question period. Knowing his disposition, he’s also fun to read in Hansard, specifically the April 26 edition on page 1,398.
It was a budget-estimates meeting, in which the opposition can ask pretty much any question they darn well please and expect an answer from the government.
Borotsik was going after Finance Minister Rosann Wowchuk’s recent budget and her government’s five-year economic recovery plan that call for budget deficits in four of those years, but five when you include the budget year that’s just ended.
Here’s a snippet of Borotsik: "Over the five-year plan, which is identified in the page 10 of the budget, we're looking at the forecast deficit of $555 million for the year 2009-2010. Then we look at projected deficits of some $545 million, $448 million, $345 million and $146 million. If you add up all those numbers, Madam Minister, that comes to $2.039 billion. Those are operating deficits. Those are deficits of less revenue than expenses. Can the minister tell me how the government is prepared to pay those operating deficits of $2.039 billion?"
Wowchuk’s reply: "The deficit will be paid through the annual borrowing payment that we have. As I indicated when I tabled the budget, we will be drawing down the stabilization fund, and we will be paying over $600 million down on the debt and interest until we return to balance. And we will be leaving $200 million, about $200 million will be left in the stabilization fund. So we will–we have–our plan says to pay down more aggressively than is required under the existing legislation, using a drawdown from the stabilization fund and, at the same time, making the investments and fulfilling the commitments that we make in the five-year plan."
Borotsik: "Okay, let's call a spade a spade, Madam Minister. There's going to be $2.039 billion that's going to be required to borrow in order to offset the projected deficits over the next four years, including the fifth year, this year. So there's going to be $2.039 billion that has to be borrowed to pay for operating deficits. The total fiscal stabilization account balance right now is $675 million. So, if you're borrowing $2 billion and you only have $675 million in a fiscal stabilization fund that you tell–you say you're going to use to pay down the debt, in reality, there will be an additional $1.4 billion in debt going forward for the next four years. Operating debt."
Wowchuk: "That's true, and that's a decision we made. We made a decision that we were not going to cut front-line services. We were not going to do what happened in the '90s where people were laid off, there was no investment in stimulus, and it took years to get over that. We made a–our approach is different. We are going to invest in people. We're going to invest in education. We're going to invest in stimulus. We're going to grow the economy and, yes, we are going to borrow money to do that–we are. Nobody has said we aren't going to do it, but we also have a plan on how we're going to use the stabilization fund to pay down over $600 million of it."
Later in the exchange:
Borotsik: "So please, Madam Minister, all I want you to do is admit that you're incurring more debt, which you've already admitted, and that you can't, in fact, aggressively pay it down if you've got an additional $1.5 billion. It's like having a credit card balance of a thousand dollars. If you pay a hundred dollars on that thousand dollars and take the balance down to $900 and then put another thousand dollars on it, you now have a balance of $1,900. You can't say that you've aggressively paid down your credit card debt. Will the minister – all I'm asking for is an admission that there is not an aggressive pay-down of operating debt. Quite the opposite. There is an aggressive incurring of operating debt over the next four years."
Borotsik next asked about what the interest rate will be for its new cash borrowings.
Wowchuk replied last borrowing government did was at about 4.2 per cent. Borrowings coming due are at between five and seven per cent. New borrowings are anticipated to be lower.
Borotsik: "Anticipation is a wonderful thing when you're looking forward to an evening with someone, but anticipation's not so wonderful when you're looking forward to paying additional interest rates."
Wowchuk: "Well, the member's anticipation of an evening with whatever his imagination will take him to are probably quite different than my anticipations of an evening. But having set that aside, I can say to the member that the department is quite comfortable that, as these loans come due, that we will be able to refinance at about five per cent."
So, if you’ve read this far, what do you think any of this means?
Socialist spending run amok versus sound Tory financial management?
Whatever, I still believe in the coming months, and certainly before the Oct. 4, 2011 provincial general election, the NDP’s five-year economic recovery plan will be revised positively as Manitoba and Canada’s economies recover.
The NDP cannot go into an election campaign and think they can win a fourth straight majority government on a platform of five years of deficit budgets, especially when the recession was relatively short and wasn’t as bad in Manitoba as it was in other province’s like Ontario and Newfoundland.
To beat the Progressive Conservatives, who have recently crept up in the polls, the NDP has to beat them at their own game.
That means showing they’re better stewards of government finances and the province’s economy—and not cutters of vital services—than Borotsik and the Tories could ever hope to be.
Plus we get a new football stadium to boot.
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More Under the Dome
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Video NDP leadership hangout03/5/2015 9:57 AM 0
I participated in a Google + Hangout a few days ago to talk about the NDP leadership race.
About Larry Kusch and Bruce Owen
Larry Kusch has been a journalist for 30 years, the last 20 with the Winnipeg Free Press. His is one of the newspaper's two legislative bureau reporters.
Raised on a Saskatchewan farm, he received an honours journalism degree from Carleton University in 1975.
At the Free Press, Larry has also worked as a general assignment reporter, business reporter, copy editor and assistant city editor.
Bruce Owen joined the Winnipeg Free Press in 1990 after four years working in other media.
He's worked in a number of positions at the Freep, including pet columnist, assistant city editor and police reporter. Right now he takes up space at the Manitoba legislature.
Bruce is one of five reporters who won a National Newspaper Award for the paper’s coverage of the 1997 Flood of the Century. He's also the recipient of the 1996 Volunteer Centre of Winnipeg Media Golden Hand Award and the 1995 Canadian Federation of Humane Societies Media Commendation Award.
In a past life Bruce worked at YMCA-YWCA Camp Stephens. He has a blog where he and others write about camp and the people who worked and played there.
You can also find Bruce on Twitter where he posts and retweets all sorts of stuff.
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