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NDP sinks Manitoba deeper in red

Hey there, time traveller!
This article was published 5/3/2014 (1260 days ago), so information in it may no longer be current.

BRANDON -- As Manitobans digest the details of this afternoon's provincial budget, the first question many of them will ask is how much money it is going to cost them. The second question they should be asking is how much of this budget they can believe.

They have plenty of reasons to be skeptical, starting with last year's budget, which raised the provincial sales tax by one percentage point.

Premier Greg Selinger claimed the new revenue would be devoted to infrastructure projects, but we soon learned his government's definition of "infrastructure" had been expanded to include spray parks, pools, rinks and just about anything else a government MLA can cut a ribbon in front of.

Last fall, Selinger promised the new PST money would be directed toward "hard" infrastructure such as roads, sewers and bridges. Hundreds of millions of dollars in infrastructure-spending announcements ensued.

That made for great news releases, but the bulk of the newly announced projects are to be cost-shared with the federal government, and senior Manitoba Tory minister Shelly Glover says none of those projects has been presented to the Harper government for approval.

If the new PST money isn't being spent on those infrastructure projects, what projects will it be spent on? A report released by the Finance Department in late 2013 had the answer.

It revealed that, contrary to its claims of increased spending, the Selinger government had actually reduced its planned 2013-14 infrastructure spending by $300 million -- this despite the fact total provincial revenues were projected to be $405 million higher.

In December, finance minister Jennifer Howard said errors made by Statistics Canada in calculating Manitoba's population were costing the province $100 million in annual transfer payments, artificially inflating the provincial deficit. We subsequently learned the methods used by StatsCan are the same throughout the country and that Manitoba had not submitted any new evidence that would warrant changing the Manitoba population estimate.

During the 2011 election campaign, Selinger promised to eliminate school taxes for seniors aged 65 and older by 2015. The promise was reaffirmed in last year's budget. Last month, Howard admitted the government cannot afford to fully implement the promise within that time frame.

Two weeks ago, Howard announced the 2013-14 summary deficit would be $86 million lower than forecast last spring. That sounds impressive, but the fine print in the province's latest quarterly report revealed departmental spending is actually $31 million higher than budgeted, which saw it blow its core -- or operating -- deficit for the year.

The provincial summary deficit is only smaller because the province's property registry was sold last month to Teranet for $75 million and our cold winter has resulted in Manitoba Hydro earning far higher profits than expected. Without that money, which can only be regarded as a one-time windfall, the 2013-14 deficit would actually be $290 million higher, and more than $200 million higher than the original projection of $518 million.

During her budget speech this afternoon, Howard will insist the province is turning the fiscal corner and will soon return to balanced budgets. Such a claim strains Manitobans' credulity to the breaking point, and perhaps beyond.

After two years of massive revenue increases, thanks to the highest tax and fee increases in the province's history, the Selinger government isn't closer to balancing its budget. It is moving further away from the target.


Deveryn Ross is a political commentator living in Brandon. Twitter: @deverynross


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