The Selinger government has pleaded poverty in reneging on its legal obligation to hold a referendum before increasing the PST. On Wednesday, it introduced legislation to override the balanced budget law, which requires a public referendum to approve tax increases. Finance Minister Stan Struthers' budget has revealed his government's promises are worthless, something Manitoba's universities learned in spades on budget day.
Manitoba's universities were told in 2010 they could budget on five per cent increases to operating grants from 2011-2012 to 2013-2014. On Tuesday, the government scrapped that commitment and cut its pledge in half, to 2.5 per cent increases in grants this year. This digs a hole in the universities' budgets -- $8 million at the University of Manitoba alone. Colleges, too, are looking to trim expenses to deal with a two per cent increase.
It is, in Mr. Struthers' parlance, the little bit of pain all Manitobans must bear to ensure finances (and revenues) are sufficient to meet the challenges -- that is why his government said it must hike the sales tax to eight per cent.
But by that same spread-the-pain logic, post-secondary schools ought to be able to raise their own revenues to pay for rising expenses. Yet, to date, the universities have been held to tuition caps at inflationary levels, which held tuition increases to about one per cent since 2011. The cap on tuition followed a decade of tuition freezes imposed by the NDP government, a policy that has made post-secondary schools overly dependent on provincial funding. Today, a one percentage point rise in provincial grants is worth the equivalent of three percentage points of tuition.
The small thaw in the freeze on tuitions was made palatable only by the robust hike to operating grants from the province. But as with poor budgeted spending plans and this government's repeated rewriting of balanced budget legislation, that promise has also been shown to be worthless.
The sales tax hike puts onto the shoulders of all Manitobans the cost of a government that, through a decade of dramatically rising revenues fuelled by record federal transfers, recklessly spent beyond its means. The reneging on a pledge to universities proves the province can't afford to fund the rising operating costs in post-secondary institutions. It is time to lift the onerous controls on tuitions to allow the schools to set them at levels that better reflect their costs and what the markets can bear.