“Mr. Selinger says he will balance the budget by 2014, which we know can’t happen without one of two things — deep spending cuts or a major tax increase for Manitoba families. It’s time for Mr. Selinger to be honest about his plans after this election. Is he misleading Manitobans about his plan to raise taxes or is he misleading Manitobans about his plan to balance the budget in three years?
“It’s one or the other and he needs to come clean.”
— Former Manitoba Progressive Conservative
leader Hugh McFadyen, September 2011
Hugh McFadyen was right when he said it would be unlikely that the NDP could balance the books by their own 2014 deadline — at least not without new taxes, deep spending cuts, or a combination thereof.
And in the face of ridicule from the NDP during the 2011 election campaign, McFadyen said that considering the economic realities facing the province, a Tory government could only end deficit spending by 2018.
He also said the government was underestimating the budgetary impact of the 2011 flood.
Apparently, honesty doesn’t win elections.
On Tuesday, Manitoba Premier Greg Selinger admitted that it will take two more years than previously planned to balance the province’s books. In an interview with the Winnipeg Free Press, Selinger and Finance Minister Stan Struthers said their new target for getting Manitoba out of the red is the 2016-17 fiscal year.
In his comments to the paper, the premier blamed much of the province’s ongoing financial problems on the “fitful and uncertain” global recovery that has been slower than previous recessions. And while it remained unspoken, the NDP has also pointed to the cost of the 2011 flood, a price tag that soared well above a billion dollars this year. And though a large portion of that was to be picked up by the federal government, Manitoba ran a record $999-million deficit in 2011-12 because of it.
Though Struthers predicted a $460-million deficit for the current fiscal year in April, we will only know if the government is on track to meet even that spending limit later this month.
So much for balancing the provincial budget being “right on schedule” as Selinger put it a year ago — we don’t remember oceans of red ink being one of the NDP’s election promises. Surely his finance minister must have been telling him the same information that McFadyen saw during the election. After all, McFadyen was no psychic.
Either Selinger and his government ministers weren’t telling the truth when they claimed a balanced budget by 2014, or they couldn’t see the fiscal writing on the wall. Neither of these two possibilities are particularly appealing.
We note that at least one of the other claims McFadyen made — that balancing the budget would require new tax dollars — has come to pass. By expanding the PST and gas taxes this past spring, the NDP broke its own election promise not to raise taxes if it was elected back into power.
As for spending cuts, Selinger has consistently refused to entertain the idea as a means to reduce the deficit. Instead, he said his government will attempt to slow spending growth — code for ‘still spending, just less.’
“Our plan is that every year we’re going to reduce that gap between our revenues and our expenditures,” Selinger said yesterday. “We’ve been working on that; we’re going to continue to work on that.”
Yes, as Selinger points out, other governments in Canada are having financial difficulties. As the CBC reported yesterday, federal Finance Minister Jim Flaherty said last week the federal deficit will be $5 billion higher than prodicted this year, and the budget will be balanced one year later than planned.
And in Alberta, the predictions of a surplus budget next year were replaced with a revised forecast for a $3-billion deficit.
We can accept the reality that the economy has been slow to improve. But that isn’t an excuse for fudging the truth during an election campaign.
Republished from the Brandon Sun print edition December 12, 2012