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Budget spin ludicrous

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Manitoba has decided "not to run a deficit like some other provinces," Finance Minister Greg Selinger said in a document tabled with his budget, which topped the $10-billion mark Wednesday. Spin is to be expected from a finance minister at such times, but to suggest that the 2009 budget reflects well on the government takes spin and puts it into orbit.

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Opinion

Hey there, time traveller!
This article was published 26/03/2009 (5058 days ago), so information in it may no longer be current.

Manitoba has decided "not to run a deficit like some other provinces," Finance Minister Greg Selinger said in a document tabled with his budget, which topped the $10-billion mark Wednesday. Spin is to be expected from a finance minister at such times, but to suggest that the 2009 budget reflects well on the government takes spin and puts it into orbit.

The budget reflects nothing other than a continued reliance on money from "other provinces" even as they are forced into deficit. To imply otherwise is ludicrous.

The fact is that provinces like Ontario, British Columbia and Alberta were forced to announce deficits weeks and months ago because they rely on own-source revenues to pay their bills. Mr. Selinger, meanwhile, will get 37 per cent of revenue from Canadians in those "other provinces" that have to earn the money they spend and go into deficit when they don’t earn enough.

To even pretend that there is virtue in spending handouts from Canadians hurt by the recession is shameful, and Mr. Selinger should know that.

Certainly he knows, because it’s right there in the budget, that he can only claim to have balanced the budget because transfers are actually up this year by $170 million, to $3.8 billion. The increase was more than enough to offset own-source revenues — income and corporate taxes — which are expected to fall by $157 million. But does he say "Thank you, other provinces"? No. He implies they have somehow failed the test of prudence that he could not possibly pass without their money.

In fact, on operations — the "core" budget — the government is in deficit by $88 million, red ink that would be worse if not for a $110-million transfer from the rainy day fund and a plan to change the balanced-budget law so the government can reduce its debt-repayment requirement to $20 million from $110 million.

Mr. Selinger can only claim to expect to have a $48-million surplus because of changes to accounting rules that bring the revenues of government agencies such as Manitoba Hydro into the "summary" budget.

Playing with numbers and trying to put the best face on a worsening situation is not unique to this government. But this government is so greatly dependent on transfer payments that more candour and less spin would go a long way.

The budget, for example, is long on the benefits of increasing spending on infrastructure by $625 million to $1.6 billion this year. That should create a lot of jobs for trades workers that the budget promises to turn out as never before. But that money will be borrowed and push provincial debt to just shy of $12 billion. That side of the equation got relatively short shrift.

The change to the balanced-budget legislation appears sensible. In the present circumstance, as the minister said, it makes sense to maintain liquidity. Why drain $90 million from the rainy day fund simply to meet a debt target at this time?

But that raises a question — two actually — that Mr. Selinger dodged repeatedly. By clinging to savings instead of retiring debt, you must be anticipating declines in transfer payments. What are the expected declines? How can services be provided without that money?

 

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