Manitobans are getting primed for the NDP government's announcement that it will not meet its deficit projections this year. Premier Greg Selinger noted Thursday, at a "state of the province" address to the Winnipeg Chamber of Commerce, that the deficit will rise this year. Fighting the province's largest flood on record has cost $841 million -- the province's share is $343 million -- and the bills are not all in yet.
Mr. Selinger is playing a classic political game, the girding of the people for harsh news, so a government can then claim "fiscal prudence" when the numbers come in better than a worst-case scenario. In the spring, Rosann Wowchuk, then finance minister, said hard work trimmed about $80 million off the 2010/11 deficit, initially set at $545 million. Then, in September, the public accounts for that year showed the summary deficit at $298 million. Fiscal prudence, was the refrain.
At the time, Mr. Selinger said the government would meet, or beat, its promise to eliminate the deficit by 2014. This, even as the largest flood on record was swamping the province with extraordinary expenses.
With his party securely back in government, Mr. Selinger was singing a different refrain Thursday. The government, he said, will meet the 2014 deadline, but no one should be surprised that the deficit will rise this year.
Asked how the government can blow its projection this year and still balance the budget by 2014 -- in effect, leaving it two years to dig out -- he replied, "prudent" management.
Prudent management over the course of a decade of steadily rising revenues, dramatically rising transfer payments, would have produced surpluses even as a global recession took hold. It would have socked away money in the fiscal stabilization fund, to backfill a drop in tax revenues. Instead, the NDP spent the money on unrestrained program expansion. And even in deficit-financing days, the government's publicity mill on Broadway churns out regular announcements of the latest cheque getting cut to yet another worthy public works or community effort.
Mr. Selinger has time to bring Manitoba's 2010/11 budget under the deficit projected. It is time to cut back spending -- government-wide. The premier refused Thursday to say whether or where the "budget challenges" would translate into spending cuts. That would be a much more difficult song to sing in a province conditioned to constantly expect more.