When Progressive Conservative Leader Brian Pallister surprised Manitobans during Wednesday’s televised leaders debate with the revelation that he plans to balance the province’s books earlier than scheduled, he offered another clue into his retirement plans.
There are two things the fiscal-conservative wants to accomplish before he hands in his keys to the premier’s office: cut the PST and eliminate the deficit.
He has already accomplished the former. As of July 1, the PST was reduced to seven per cent. He’s well on his way to fulfilling the second goal. This year’s projected deficit is $360 million, down nearly two-thirds from the $932-million shortfall left behind by the NDP government.
Pallister’s original timeline for balancing the books was two full terms in office, which would typically be eight years. That would have seen government popping the champagne corks in 2024 had Pallister followed the province’s fixed-date election law.
According to his new timeline, that would now happen in 2022 – a full two years earlier than planned. If successful, that would give Pallister the perfect exit strategy that same year.
In an interview with The Canadian Press in December, Pallister began musing about calling an election a year before the fixed-date election of Oct. 6, 2020. Why would he do so? There’s no strategic advantage to going early. Had he waited another year, he could have avoided some of the health care woes his party is struggling with in this election. The disruption from the Winnipeg Regional Health Authority’s hospital consolidation plan will likely subside over the next year as the plan begins to take shape. It would probably have been an easier sell to voters next year.
But maybe waiting a year would have been met with a worsening economy. Or maybe not. No one knows. From a strategic perspective, going this year or next is basically a wash.
Which gets back to my theory that Pallister called an early election because he wants to retire sooner rather than later. Sooner being 2022 instead of 2023 or 2024, which is what it would have been had he gone to the polls in 2020 and stepped down at the end of that term.
The optics of seeking re-election in 2020 and retiring two years later would be too self-serving. But retiring three years after re-election is acceptable.
There are no economic fundamentals driving the prospect of an early surplus. In fact, the opposite is true.
If nothing else, Wednesday’s revelation adds to the speculation of an early retirement. Why else would government abandon its original plan of balancing the books by the end of a second term and rush to have it done two years early?
There are no economic fundamentals driving the prospect of an early surplus. In fact, the opposite is true. The Conference Board of Canada recently downgraded Manitoba’s economic growth to a projected 0.5 per cent for 2019 and 0.8 per cent for 2020. If those predictions prove accurate, it would make balancing the books early even more problematic.
The board’s projections could also be wrong. After all, it's alone in its gloomy outlook of Manitoba.
Still, even the Tories’ 2019 budget projection forecasts a $28-million deficit for 2022-23 under "normal" economic growth rates. Most economic projections for Manitoba and Canada show below-normal growth projections for the next few years.
That’s not to say a re-elected Tory government couldn’t balance the books by 2022 under those conditions. It has already been reducing the deficit under a slow-growth economy – a 1.0 per cent real GDP growth rate last year and a budget built on a 1.7 per cent growth rate this year. If the economy does slow down further, though, balancing the books by 2022 would be difficult to do without further pain. Current long-term expenditure projections include wage freezes for public servants and considerable spending restraint.
With the books balanced and the PST reduced — which is not a bad legacy — why would he stick around any longer?
There’s also no reason to believe the province will get a significant bump in transfer payments from the federal government over the next few years.
Nevertheless, if Pallister wants the books balanced by 2022, it will probably get done.
It will be exactly 30 years in 2022 that Pallister first won a byelection. He will be 68 years old with three decades of provincial and federal politics under his belt, including two terms as premier. With the books balanced and the PST reduced — which is not a bad legacy — why would he stick around any longer?
Tom has been covering Manitoba politics since the early 1990s and joined the Winnipeg Free Press news team in 2019.