Mr. Friesen’s barely-there budget

Hey there, time traveller!
This article was published 01/06/2016 (3448 days ago), so information in it may no longer be current.

It could be called, officially, the second shoe to drop. Finance Minister Cameron Friesen tabled his first budget Tuesday, but repeated much of the narrative he spun two weeks ago when he told Manitobans the provincial deficit for 2015-16 was more than $1 billion. The budget fleshed out that financial update a bit.

Yes, there were the usual suspects to blame. The Health Department overspent its budget by $115 million; Education by $7 million; and Families by $62 million.

And the plot to this story was fully rolled out: the Pallister government has declared the cupboard almost bare. There is no room for goodie bags and giveaways.

Nowhere is that clearer in the budget papers than in a section traditionally reserved for taxes and tax implications. The NDP fattened the section with tax cuts, breaks and credits and rounded it out with what became known as the “Manitoba Advantage.” That was a series of charts that compared the cost of living here with that of other jurisdictions in Canada. It was all cleverly designed to obscure the fact Manitobans pay among the highest incomes taxes in the country.

In Mr. Friesen’s budget papers, the section ran seven pages, fully 41 pages short of last year’s (NDP) offering. And there were just two notable changes to taxes. First, the party made good on its election promise to index to inflation both the basic personal exemption — the amount of money Manitobans can earn before paying income tax — and the tax brackets.

Second, the Pallister government found it could not resist rolling back, and eliminating for many homeowners, the seniors’ education tax rebate. The rebate was set to wipe education taxes off the property bills of Manitobans aged 65 and older. Rolled out by the NDP over three years, it was to hit a ceiling this year of $2,300. Mr. Pallister told the Free Press during the election campaign his party had no position on the seniors’ education tax rebate, but clearly he took a second look and drew the obvious conclusion.

The tax rebate to seniors was low-hanging fruit. Too much of a temptation — and for good reason. A fiscally responsible government struggling to get out of deficit would never have devised it. Yet, even on principle it made no sense. Public education is a social contract that binds a democratic, pluralistic society where it is recognized that an educated population is in the social, economic and cultural interests of the whole. All taxpayers are part of this deal.

So about half of those Manitobans who have already been told (by the NDP) to watch their mailboxes (or bank account) for the government cheques can stop counting their chickens. Mr. Friesen on Tuesday said the rebate is capped at $470 and only for homeowners with family incomes of $40,000 or less. Those with incomes between $40,000 and $60,000 will see much smaller rebates. Scrapping the rebate to higher-income senior citizens will save the treasury some $37 million.

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That was the better part of the Pallister budget. It came up short on detail. There was no itemized account of how the province will cut the deficit by $122 million this year; and there are no multi-year projections, which Manitobans have come to expect, laying out how long it will take to cut the deficit.

In fact, Mr. Friesen said Tuesday he is scrapping the balanced-budget legislation altogether. The legislation, passed by the former Filmon government, had been gutted to such an extent by the NDP that it had become a facade. The law became proof, in the end, that no legislation can pin a government to prudent financial stewardship. There is just its word and its record. And the quality of that, as the NDP learned this spring, is to be judged by the electorate.