A year after hitting Manitobans with a surprise taxation shock, the province unveiled a budget Thursday that aimed to soothe a jolted electorate.
Finance Minister Jennifer Howard's maiden budget contained no tax hikes, no unexpected expenditures and no major program cuts.
And that's probably a safe strategy for a government that is just two years away from a provincial election.
1. ELECTION BUDGET
The Selinger government imposed major tax increases in the first two budgets following its re-election in October 2011, including a one-point rise in the PST last year. But with an election expected in spring 2016 -- and possibly as early as October 2015 -- it was not going to impose an even greater level of tax pain on an increasingly cranky electorate. So this year's budget contains no tax increases -- not even a boost in tobacco levies and any fee increases will only be absorbed by a small handful of Manitobans who buy provincial maps or hunt.
2. CONTROL SPENDING
The province will freeze or cut spending in nine government departments. They are Aboriginal and Northern Affairs, Agriculture, Food and Rural Development, Civil Service Commission, Conservation and Water Stewardship, Finance, Housing and Community Development, Labour and Immigration, Mineral Resources and Multiculturalism and Literacy. The NDP will also limit government spending growth to two cent in the coming year, first to ensure government does not grow more quickly than the economy, but to whittle down the deficit. The province is forecast to be back in surplus to the tune of $39 million by 2016-17.
3. HAVE YOU SEEN THEM?
The size of forecast deficit in 2015-16 is in part to deal with less money in per capita federal transfer payments due to Statistic Canada reducing the estimate of Manitoba's population by 18,000 people. The province says that discrepancy will take $100 million out of that year's budget and by the same amount in each of the three following budget years. The projected deficit for that year was $164 million, but has been adjusted upwards to $218 million. The following year, the government says it will be back in surplus. The province has proposed an independent review to resolve the matter.
4. JOBS, JOBS, JOBS
The province is putting its eggs in one basket on its various education and job-training programs. That includes hiring 50 more teachers to reduce class sizes, to creating a new bonus for employers who take on apprentices, to adding more on-the-job training programs in the province's north. "We believe in an education system with no wrong doors and no dead ends," Finance Minister Jennifer Howard said in her budget speech. The province will also boost the minimum wage this year. It was last raised to $10.45 per hour last Oct. 1.
After several years of intense lobbying, the NDP is making a significant move on poverty. The chunk of welfare earmarked for housing will rise steadily over the next four years so it matches 75 per cent of average rents in the province. Starting July, people on welfare will get between $50 and $70 more a month for housing, and the number of people eligible for that cash will grow to include more of the working poor. That, say activists, will help the poor stop dipping into their food budgets to make rent. The move adds another $20 million onto the welfare budget this year. The cost in the coming three years is unknown.
Howard said she will place a two per cent cap on core government spending, and she recommitted the government to balancing the books in 2016.
She also sprinkled some modest goodies for families with young children, seniors, welfare recipients and low-wage earners.
But her major emphasis was on jobs and sustained economic growth through infrastructure spending and skills training.
"Really, what this budget is about is creating good jobs today, but also making sure that we have the skills and training and education in place so that our kids can get those good jobs tomorrow," she said.
If her financial blueprint was boring compared with that of her predecessor, Stan Struthers, last year, so be it, Howard seemed to say Thursday.
"You hear a lot in this budget about skills training. That may not be the most exciting, sexiest thing ever in a budget, but it is critically important to the future growth of this province," she told a press briefing.
The government will boost incentives for companies to take on apprentices by $2,000 per employee per year to a total of $5,000 per employee per year. It will also provide bonuses to companies that take on apprentices for the first time. Meanwhile, it will launch a new Manitoba Works program that works with community agencies to provide essential skills training and work experience.
A day earlier, the government announced a five-year, $5.5-billion infrastructure plan it said would create nearly 59,000 jobs. Howard said a new emphasis on job training will help ensure there are enough skilled people to fill those jobs.
The government will also boost the minimum wage in 2014, but Howard declined to say by how much. A labour-management committee will arrive at a figure, she said.
In an attempt to quell critics who see the NDP government as spendthrift, Howard announced she has frozen or cut spending in nine government departments, including Agriculture, Food and Rural Development, Aboriginal and Northern Affairs, Housing, Multiculturalism and Conservation.
Toward that end, the government has recruited Standard Aero's Rob Despins to chair a committee that will advise government on how it can operate in a leaner fashion.
"That isn't about providing people with less services... and we aren't asking Manitobans to do with less," Howard noted. "We want them to have excellent services, but we need to get more efficient at providing those services."
The government expects to incur a $357-million deficit in the coming fiscal year -- including a $324-million shortfall in core government operations. That compares to a $432-million deficit for the current year, which ends March 31. Next year, the government projects a $218-million deficit before posting a small surplus in 2016-17.
The budget contained a promise of $5.5 million for new child-care spaces and improved funding for daycares.
It also begins to roll out a promised school tax rebate for seniors, although as previously announced, it won't be fully implemented for three years. This coming year, all seniors who own homes will be able to apply for a rebate of up to $235. The move is expected to take an additional 7,200 seniors off school tax rolls.
The government also promised to increase rental allowances for those on social assistance to 75 per cent of median market rates within four years.
Conservative Leader Brian Pallister said he is skeptical the NDP will be able to balance its budget within two years. He noted the NDP vowed in the last provincial election it would do so by this year.
"This is a government that has increased spending at almost 2 1/2 times the rate of inflation and population growth. Spending has been out of control for 15 years with the NDP," he said. "I like deeds better than promises."
Liberal Leader Rana Bokhari said she welcomed the government attempting to become more efficient in its operations and curtail spending.
However, she wondered why it's taken the NDP so long to realize such measures were needed. "If that's what they chose to do now, it's in every Manitoban's best interests that they do, actually, do that," she said.
Bokhari also said she would have liked to see a more precise accounting of exactly what infrastructure projects will be funded through PST revenue earned from last year's tax hike.
The Canadian Federation of Independent Business said the budget failed to address the province's uncompetitive tax system or cut red tape.
"We're concerned this is a fall-behind budget that won't inspire confidence in the small-business community," said Elliot Sims, the CFIB's Manitoba spokesman.
Organized labour, meanwhile, worried about the implications of Howard's talk of applying lean management practices to the public service.
"We're open to working with government to find better ways to do things, but we worry about past experiences in other places where it's often been the road to downsizing or cutting things back," said Kevin Rebeck, president of the Manitoba Federation of Labour.
Meanwhile, as reported in the Free Press on Thursday, the province will introduce a low-cost loan program through Manitoba Public Insurance to allow vehicle owners to purchase winter tires.
Mike Mager, president and CEO of CAA Manitoba, said the province could make winter roads even safer if it exempted winter tires from the provincial sales tax. A set of four tires costs up to $1,000.
"If the cost of tires is reduced by as little as $80, that would help everybody," Mager said.
A 2011 CAA Manitoba survey of more than 11,000 members found the No. 1 reason why respondents said they did not have winter tires was because of cost.
How will the budget effect your life? Will you buy snow tires now? Join the conversation in the comments below.