Deficits the rule, not exception

Tuesday was one of those days when the darker, weaker aspects of politics conspired to betray the public interest.

It was a historic day. New Manitoba Progressive Conservative Leader Brian Pallister made his first appearance in the legislature and his first question challenged Premier Greg Selinger to increase the basic personal exemption to provide tax relief for Manitobans. That question is part of a strategy by Pallister to get the NDP government to debate Tory ideas. It's an elegant strategy, all in all. Selinger swatted away the Tory idea with a replay of the tax relief measures his government introduced since it took power in 1999.

How, you might ask, does this exchange betray the public interest? Anyone who was hoping that Pallister's arrival would signal a new age of political debate had to be disappointed. The situation was the same as it has always been: The questions are meaningless, partisan hyperbole; the answers so shallow that only the most simple-minded would see them as genuine attempts to explain, elaborate or elucidate. On both sides, it was an intellectually dishonest debate.

The Tories did get closer to a salient point in their second question, when new Tory finance critic Kelvin Goertzen asked the government about its admission Monday that it would not balance the budget by 2014 as it had promised. However, even though the subject was more relevant, the question was too politically charged.

Goertzen wanted to know whether Selinger would agree he was either incompetent or patently dishonest for breaking his word about balancing the budget. Generally, I love the "you're-either-stupid-or-you're-a-liar" line of attack. But not here. Selinger responded by seizing every positive way of describing his current predicament, without actually providing any commentary on the issue at hand: whether we can balance budgets and protect key services.

For those of you who have been hiding under a rock, it is by no means a certainty we will be able to afford quality health care, public education and supports for individuals in perpetuity. Now, four years after the greatest economic downturn in 80 years, the concern is even if the global economy recovers, it will be as a crippled invalid, unable to generate the revenues needed to support services. When you consider the gravity of the situation, Tuesday was little more than a concerted effort by the government and opposition to whistle in harmony past a graveyard.

We seem to be trapped in a shallow debate about deficits and whether they are forensic evidence of bad government. The reality is that all governments in this country have been forced into deficit. That's not a defence of any NDP policy; it recognizes we're all standing in the same glue pot, and no party -- opposition or otherwise -- has a magic bullet to get us out.

Drastically cut government spending? Even conservative economists believe that will deepen our economic predicament. Massive tax cuts? Taxpayers have neither the inclination (thanks to global uncertainty) nor the resources (thanks to personal debt) to spend our way to economic growth.

Deficits are now the rule, not the exception. The federal government last week announced its deficit for this year has grown by $5 billion. Alberta's deficit is expected to top $3 billion this year. Newfoundland and Labrador has seen its deficit triple to nearly $700 million. Saskatchewan, despite the growth driven by the twin engines of oil and potash, had to use a $300-million draw from its rainy day fund and a $125-million special dividend from SaskPower to produce a nominal surplus last year.

The challenge in Manitoba is a bit different. We've always been a "last in, last out" economy when it comes to recession. Diversified enough to avoid deep slowdowns but not robust enough to create enormous wealth or economic opportunity. That is the burden Manitoba has carried for decades.

A bump in the BPE may make for great political hay, but would any Tory suggest it's a solution to our current fiscal crisis? Unlikely. So why are we talking about it? As for the NDP government, is there anything about past accomplishments that provides comfort now? Then why are we dwelling on a medley of its greatest hits?

If we want greater economic opportunities, we need a new approach to governing and fiscal management. Unfortunately, neither the NDP nor Tories seem interested in a new approach. They seem happy to languish in meaningless proposals and hyperbolic sparring matches.

Let's accept that all over Canada, there isn't enough economic activity to generate the revenues needed to pay for public services. Furthermore, if we're going to change the trend line, it's going to take creativity and vision and a new tenor of debate.

Frankly, at this critical stage in our history, we deserve nothing less.

dan.lett@freepress.mb.ca

Sea of red across the nation

If misery loves company, there's a lot of love right now across Canada. Recent deficit updates for Canada's provincial governments reveal a bad situation that's getting worse. Of the 10 treasuries examined, only one -- Ontario -- is doing better than it forecast on the deficit. The figures below also contain original budget estimates for the debt-to-GDP ratio (the principal benchmark for measuring fiscal solvency), revenue and expenditures.

British Columbia

Current deficit/surplus forecast: $1.14-billion deficit (up from $968 million in 2012-13 budget)

Debt to GDP: 26.2%

Revenue: +2.9%

Expenditures: +3.7%

Alberta

Current deficit/surplus forecast: $3-billion deficit (up from $886 million in 2012-13 budget)

Debt to GDP: 4.1%

GDP: +1.8 per cent

Revenue: +4.6%

Expenditures: +3.5%

Saskatchewan

Current deficit/surplus forecast: $95-million surplus (fiscal update not available)

Debt to GDP: 26.2%

GDP: +3.8%

Revenue: +2.9%

Expenditures: +3.7%

Manitoba

Current deficit/surplus forecast: $448-million deficit (fiscal update due next month)

Debt to GDP: 27.4%

GDP: +2.3%

Revenue: +0.3%

Expenditures: -1.0%

Ontario

Current deficit/surplus forecast: $14.4-billion deficit (down from $153-billion deficit projected in 2012-13 budget)

Debt to GDP: 26.2%

GDP: +1.7%

Revenue: +2.9%

Expenditures: +2.5%

Quebec

Current deficit/surplus forecast: $1.6-billion deficit (up from $1.5-billion in 2012-13 budget)

Debt to GDP: 35.2%

GDP: +1.5 per cent

Revenue: +5.9%

Expenditures: +2.0%

New Brunswick

Current deficit/surplus forecast: $356-million deficit (up from $182 million in 2012-13 budget)

Debt to GDP: 34%

GDP: +1.3%

Revenue: +5.2%

Expenditures: +1.3%

Nova Scotia

Current deficit/surplus forecast: $249-million deficit (up from $211 million in 2012-13 budget)

Debt to GDP: 34.8%

GDP: +1.7 per cent

Revenue: +4.3%

Expenditures: +3.2%

Prince Edward Island

Current deficit/surplus forecast: $74.9-million deficit (no fiscal update available)

Debt to GDP: 35.6%

GDP: +1.4%

Revenue: +1.3%

Expenditures: -0.55%

Newfoundland and Labrador

Current deficit/surplus forecast: $700-million deficit (up from $258 million forecast in the 2012-13 budget)

Debt to GDP: 25%

GDP: +0.1 per cent

Revenue: -10.9%

Expenditures: +1.7%

Republished from the Winnipeg Free Press print edition November 21, 2012 A4