Business says it’s not enough
Spending $1.6 billion won't fix economy
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Hey there, time traveller!
This article was published 26/03/2009 (5065 days ago), so information in it may no longer be current.
The NDP will provide the province with a much-needed jolt by unleashing billions of dollars in spending but business leaders say it won’t be a magic bullet to cure what ails the flagging economy.
The most significant initiative is a planned $1.6-billion expenditure on infrastructure renewal, including roads and highways, public schools, water and waste-water projects and public housing. The investment, which is a $625-million increase over last year’s spending, is forecast to create 10,000 person years of employment and provide the incomes that will ideally convince Manitobans to get off their wallets.
Finance Minister Greg Selinger said sound budgeting decisions in the past have put Manitoba in a better position than most to face the economic unheaval.
“The dividend of this steady financial management is the ability to stimulate our economy today and build for the future,” Selinger said in his speech. “Manitoba will not be immune to a global recession, but we are determined to take advantage of our economic strengths to sustain our way of life.”
John McCallum, an economics professor at the I.H. Asper School of Business at the University of Manitoba, said for an economy of 1 million people that comprises about three per cent of Canada, the biggest drivers won’t come from the big thinkers on Broadway. Instead, it’s the Bank of Canada’s decisions on interest rates, federal spending and tax policies and the value of the loonie that determine how high (or low) the Manitoba economy will fly.
"A province is really limited as to how much it can stimulate itself," he said.
McCallum said one’s opinion of the budget’s stimulative impact depends on one’s view of how long the economic downturn will last.
"If, as many think, it’s up we go with the economy later in the year and we have an okay 2010, then a year from now, we’ll think this was a good approach. But if the recession lingers well into 2011 and the recovery is slow, then I think we’ll all wish we had kept our spending much slower and had the dollars to spend to keep our services whole down the road.
"You only get to spend each dollar once. I don’t think the worst recession since WWII will end that quickly."
Dave Angus, who heads the Winnipeg Chamber of Commerce, said he believes the infrastructure spending will be sufficient to trigger funds from the recently-passed federal stimulus package.
"The dollars will be there if we can get shovels in the ground on a timely basis," he said.
But because the amount of money being put back in the pockets of entrepreneurs and companies is modest, he said expectations of the budget’s impact can’t be too high.
"We need to be much more aggressive as we move forward, especially on tax competitiveness," he said.
Lanny McInnes, Manitoba director of government relations and member services with the Retail Council of Canada, said he doesn’t think the budget goes far enough to give consumers the confidence to get them back into spend mode.
"I think 2009 is going to be a tough year for retailers," he said. "We didn’t think the government would take any radical steps. We expected they would take a steady approach and that’s what we saw with this budget," he said.
A thesaurus costs $5.99 on Amazon
The Doer government has a love affair with certain catch phrases, like ‘moving forward’ or ‘robust multi-pronged integrated stakeholder initiative.’ Finance Minister Greg Selinger’s 22-page budget speech was littered with some of the government’s most oft-repeated words. Here’s a sample.
Build or Building: 34
Invest or investing: 80
Balance or balanced: 19
New Word Alert: Planful
It appears to be Health Minister Theresa Oswald’s favourite new word to describe health care spending, as in "it’s a very planful and clear investment." The word doesn’t appear in the Oxford dictionary, and it may not be a word, but it appears to be gaining currency among government wonks.