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Few surprises in Jennifer Howard’s first provincial budget

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Finance Minister Jennifer Howard’s first budget contains only minor fee increases and a commitment to raise the minimum wage again — two of the few standouts in a budget that focuses most on holding the line and putting more people to work.

Included in the budget, one of the shorter ones in recent years, is also a commitment to be out of deficit by 2016 when Manitoba’s books will be $39 million on the positive side.

Also highlighted is a four-year plan to help Manitoba’s poor through a new shelter or rent assist benefit program to support low-income Manitobans living in private rental housing. The NDP says the goal is a rate target of 75 per cent of median market rent, an issue that poverty advocates have pushed government for several years.

"Reducing poverty and helping people move from welfare to work is not just the right thing to do, it is what our economy needs to grow," Howard said in her budget speech, read in the legislative assembly this afternoon.

As promised by Howard earlier this week, today’s budget has no tax shocks or cuts.

There will also be no new cigarette tax increases this year or any other tax increases, the NDP having raised the provincial sales tax last year by one point to eight per cent and the year before extending what services were covered by the PST, such as haircuts more that $50 and some insurance products.

And what fee increases there will be are minor and confined to small groups. Hunters will pay a new $5 fee to go towards preserving wildlife and the sale of government maps will increase up to $72, depending on the type of map being bought. Included in the budget are already-announced fee increases to cottage owners in provincial parks and an increase in fees for veterinary diagnostic tests.

Howard said she and her government make no apologies for a budget that centres on job training.

"That may not be the most exciting, sexiest thing ever in a budget, but it is critically important to the future growth of this province," Howard told reporters.

The budget’s other main focus, as already reported, is on infrastructure. The government said it will spend $5.5 billion over the next five years, not only to improve roads and highways like Highway 75, but to further jumpstart the province’s economy.

"There are many good things about Manitoba, but one thing you can never take away from us is our geographic location," she said. "To build on that means investing in those trade corridors."

The budget will also put a limit of two per cent on government spending growth to ensure it doesn’t grow faster than the economy. There will be a freeze or reduction to the budgets of nine government departments.

Towards that end, the government has recruited Standard Aero’s Rob Despins to chair a new lean council to advise government on how a smaller government can continue offer efficient services.

"That isn’t about providing people with less services," Howard said. "We aren’t asking Manitobans to do with less. We want them to have excellent services, but we need to get more efficient at providing those services."

Howard also said the government has adjusted the size of the projected 2015-16 deficit in part to deal with less money in per capita federal transfer payments due to Statistic Canada reducing the estimate of Manitoba’s population by 18,000 people. The province says that discrepancy will take $100 million out of that year’s budget.

The projected deficit for that year was $164 million, but has been adjusted upwards to $218 million. The following year the government says it will be back in surplus.

"I think the path forward is achievable," Howard said.

Reactions to the 2014 Provincial Budget

Progressive Conservatives

Leader Brian Pallister said he was skeptical of the budget promise to hold core government spending increases to two per cent.

“This is a government that has increased spending at almost two and a half times the rate of inflation and population growth. Spending has been out of control for 15 years with the NDP,” he said. “I like deeds better than promises.”

He also scoffed at the NDP government’s plan to embrace lean management practices for government departments. “Lean management practices and that school of management theory has been around for decades and decades. This government’s been in place for 15 years and they’re just discovering lean management? And they don’t decide to act on it. They decide to do what? Set up a committee. That’s what you do when you don’t plan on doing anything.”

 

Manitoba Liberals

Leader Rana Bokhari said she welcomed the government attempting to become more efficient in its operations and curtail spending.

However, she said it’s taken them 14 years of being in power to realize such measures were needed.

“If that’s what they chose to do now, it’s in every Manitobans best interests that they do actually do that,” she said.

Bokhari also said she would have liked to see a more precise accounting of exactly what infrastructure projects will be funded through PST revenue earned from last year’s tax hike.

 

Post-secondary institutions

University of Winnipeg president Lloyd Axworthy accused the NDP of failing to address the longstanding funding gap between U of W and the University of Manitoba and Brandon University.

Combined with low tuition, that puts U of W in a tough position, said Axworthy. On a per-student basis, U of W is thousands of dollars behind the other two schools, he said.

Axworthy said that U of W will have to chop at least $2 million in spending to make ends meet this coming fall.

“There is an equity issue, a fairness issue,” said Axworthy, who believes the province made a mistake by legisating the tuition cap at the rate of provincial growth.

U of W isn’t asking for a full change overnight to a system based on funding operating costs based on the number of credit hours students take, he said: “We’re looking for $3 or $4 million.”

Every other province works enrolment or course loads into its funding formula, rather than just applying an increase to the previous year’s grant: “We’re double the size we were when I came in. There’s no formula within the grants system to take account of the number of students.”

University of Manitoba President David Barnard said he was appreciative of receiving a 2.5 per cent increase in operating grants again — government had advised schools to prepare their 2014-2015 budgets based on zero.

U of M will again need to make adjustments in its own budget, and determine where to use resources, he said.

Barnard applauded the government’s decision to shift the council on postsecondary education from an arm’s length body to becoming part of the minister’s office.

“It’s one less link in the chain of communications” that will make government ‘more nimble and agile’, he said.

COPSE decides how government money will be dispersed, and among other responsibilities, decides whether to approve new programs.

Axworthy said moving COPSE into the minister’s office will make for ‘a more seamless education system’ from K-12 right through postsecondary.

BU president Deborah Poff said she expected the 2.5 per cent grants and the continuing cap on tuition — any reference to zero was an annual government exercise in reporting the potential impact of worst-case scenarios, she said.

“Tuition is very low — I know it’s a commitment of government,” she said.

BU has finally straightened out its pension contributions problems, and should be able to balance its budget, Poff said.

Red River College officials could not be reached.

History

Updated on Thursday, March 6, 2014 at 3:25 PM CST: Fixes typos in highlight box.

4:29 PM: Adds reactions.

4:37 PM: Adds video.

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