Greg who? NDP has to make voters forget about last leader Kinew’s achievable books-balancing pledge important step to leave party’s fiscally irresponsible recent past behind
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When NDP Leader Wab Kinew seeks a mandate to govern in the upcoming provincial election, his biggest challenge will be to convince voters he won’t blow the bank and rack up massive deficits.
Fairly or unfairly, that is the public perception the NDP must contend with.
Unfairly, perhaps, when you look at the party’s record from 1999 to 2009 under then-premier Gary Doer, when the NDP balanced the books most years (they ran a deficit of $577 million in 2003) and cut taxes, including eliminating the small business tax.
But fairly when Manitobans recall the financial disaster under former NDP premier Greg Selinger between 2009 and 2016, when he ran deficits every year, nearly doubled the size of the provincial debt, raised the PST and damaged the province’s credit rating.
That’s the record Kinew has to worry about the most because it’s still fresh in the minds of Manitoba voters.
Kinew promised a business luncheon crowd this week that an NDP government would balance the books within its first term in office. The solemn pledge is a prerequisite for any Opposition NDP that wants to return to power.
Doer, while in opposition, had to do the same thing in 1999. Not only that, he had to convince his own caucus that the debate over balanced budgets was over and that if they wanted to form government, they had to promise voters they would be responsible stewards of the provincial treasury. They largely made good on that pledge once in office. It wasn’t until Selinger took the reins that the wheels fell off the fiscal wagon and his government crashed.
Fortunately for Kinew, and most of his fellow caucus members, they were not members of that government. They can reasonably claim they plan to govern more like Doer than Selinger.
Still, it’s not an easy sell for the NDP. Which is why Kinew has already started the conversation with Manitoba’s business community, the people he needs to convince the most.
Are they jittery at the prospect of an NDP government after the Oct. 3 election? It depends who you talk to. Winnipeg Chamber of Commerce president and CEO Loren Remillard, a political moderate, issued a warning of sorts following Kinew’s speech. He said it’s all fine and good to resuscitate the province’s beleaguered health-care system (which will cost money), but government also has to make sure it doesn’t “put the economy in the ICU” while doing so.
It’s not as if the NDP, or whoever forms government in October, would have to move mountains to balance the books in four years. The projected deficit in 2023-2024 is $363 million, down from a peak of $2.1 billion during the height of the COVID-19 pandemic.
Manitoba Finance predicts the deficit will fall to $53 million by 2026-2027 under current economic growth projections. That includes generous spending increases by the Stefanson government this year — a last-ditch effort by the Tories to turn their political fortunes around before the election. It also includes recent tax-cut announcements, including billions in education property tax rebates (which could be used instead to invest in health care and public schools, a move that would likely garner strong public support).
Manitoba Finance predicts the deficit will fall to $53 million by 2026-2027 under current economic growth projections.
A balanced budget in 2027-2028 is very doable, barring a severe economic downturn or an unforeseen catastrophic event. Part of the reason for that is massive increases in transfer payments from Ottawa.
The federal government has significantly boosted the Canada Health Transfer. Manitoba is also receiving record increases in equalization payments owing, in large part, to stronger economies in other parts of the country, including Ontario and Alberta.
Total federal transfers to Manitoba have soared to nearly $5.9 billion this year from $4.3 billion in 2019-2020 and are expected to grow at a steady pace over the next several years.
Kinew, if he wins, would benefit politically from that, as Doer did in the early 2000s when transfer payments also soared after years of cuts.
The Tories, meanwhile, have little to brag about when it comes to responsibly managing the province’s finances. The PC government balanced the books in 2019-2020 (a short-lived accomplishment owing to the pandemic), but have also borrowed hundreds of millions of dollars to cut taxes, burdening future generations with unnecessary and expensive debt.
Kinew’s pledge to balance the books in four years is not a radical promise. It should be relatively easy to achieve, even with significant increases in health-care spending, no matter who wins the next election.
Tom has been covering Manitoba politics since the early 1990s and joined the Winnipeg Free Press news team in 2019.