Winnipeg Free Press - PRINT EDITION

NDP tackles massive deficit too slowly: critics

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DESPITE saddling Manitobans with large tax and fee hikes in two successive budgets, the Selinger government is making little progress in taming its huge deficit, critics say.

Manitoba is projected to incur an operating shortfall of $518 million this year -- the government's fifth consecutive deficit. The deficit for the recently concluded 2012-13 budget year will reach $583 million, compared with $460 million originally predicted a year ago, according to the latest projection.

Critics worry if the government doesn't seriously tackle the deficit soon, Manitobans will ultimately pay the price in the form of even greater tax hikes and an economy that is uncompetitive.

"The (provincial) debt's going up too quickly. The numbers are getting out of the comfort zone. We're unhappy with the size of the deficit and the slow pace at which the deficit will be reduced," said Jim Carr, president and CEO of the Business Council of Manitoba, which represents leaders of many of the province's largest companies.

Dave Angus, president of the Winnipeg Chamber of Commerce, said his organization is concerned about Manitoba's long-term financial health. "If we do not get our fiscal house in order, we're going to have to have tax increases to deal with our debt," he said, noting debt-servicing payments are projected to increase by $19 million this year.

This year's half-billion-dollar deficit will occur despite net tax increases in Tuesday's budget of $221 million. That follows the largest tax and fee hike in a quarter-century in last year's budget.

"What you saw today was the biggest tax grab in over a quarter of a century, the year after the biggest tax grab in a quarter of a century," said Progressive Conservative Leader Brian Pallister, who has hounded the government to get its spending under control.

Premier Greg Selinger announced in December Manitoba would have to extend its target date for balancing the books to 2016-17, breaking a long-held government promise of escaping red ink by 2014-15.

Tuesday's budget set out a new series of targets for reaching budget balance. According to budget papers, the government projects deficits of $365 million in 2014-15 and $164 million in 2015-16 before achieving a small surplus in 2016-17.

But some are skeptical the NDP can do this without further tax hikes -- unless it learns to make do with less.

Government spending is forecast to increase this year by $443 million -- or 3.1 per cent -- to $14.8 billion. The province's summary net debt is forecast to rise to $17.7 billion this year.

Manitoba's projected $518-million deficit would be the fourth-highest in the country this year. And two of the three provinces predicting greater projected losses -- Alberta and Ontario -- are much more populous. In his budget speech, Finance Minister Stan Struthers noted Manitoba has had to cope with sky-high flood-claim and protection costs in recent years. Total flood-fighting and protection costs during the last 15 years were four times greater than in the previous 15 years, he said.

Struthers said his financial blueprint freezes or reduces the budgets of 11 government departments. He also vowed the government will expand "lean management practices" to more departments to improve efficiencies.

Struthers said in the past year, the government saved money by reducing the number of regional health authorities, merging two Crown corporations, finding $128 million in spending cuts and realizing $75 million from the sale of government assets.

larry.kusch@freepress.mb.ca

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Republished from the Winnipeg Free Press print edition April 17, 2013 B2

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