That plaintive sound out of the Manitoba Legislative Building Thursday was, in essence, the cry of “uncle” from a government finally realizing it cannot spend Manitoba into prosperity. Deficit funding has caught up to the Selinger administration. Even the sacred cow of health care is reined in, held to below inflationary increases.
The fight to bring the budget back into the black by 2016-17 has finally halted the years of unconstrained spending, which always outstripped remarkable growth in revenues. Finance Minister Jennifer Howard’s first budget held so little of note the document was impressive for that fact alone. Severely chastened by a public enraged by a sales tax hike the NDP promised in the last election was not on the table, the government pulled together what essentially amounted to a stand-pat budget.
That is not to say Manitoba’s finances are firmly in hand. Despite the fact its own revenues (largely thanks to income taxes) are set to rise by $345 million this year, this year’s $12.3-billion operating budget ends in a $324-million deficit. And that’s after taking $55 million out of the fiscal stabilization fund, the province’s piggy bank.
It’s not that there were no breaks to be had. The province found more than $5 million to increase daycare spots and spending in education and justice will rise, with post-secondary education institutions getting hikes of 2.5 per cent in their operating grants.
And, having been beaten to the punch by Brian Pallister’s Conservatives, the NDP has bowed to the calls of poverty action groups to eventually raise the welfare housing allowance to 75 per cent of the market median rents. That means only $50 more for parents on income assistance this year, but it is an important nod to the fact decent housing is central to relieving the stress on struggling families. Politically, it robs the Tories of a sensible election promise on a platform typically associated with the NDP.
As expected, Ms. Howard’s spending plan will make way for the promised education property tax rebate for older homeowners, although, as announced, it will be phased in over three rather than two years. Those homeowners 65 years of age or older will be able to apply as early as May for rebates of up to $235 of their education taxes.
Despite some last-minute hand-wringing by Ms. Howard about the optics of paying the very taxes levied on million-dollar houses, rebates will be paid this year for all homeowners 65 or older. Ms. Howard says her department is working on how to best roll out what will eventually amount to $50 million in total tax breaks, to ensure the public treasury is not cutting cheques for $10,000 or $20,000 to wealthier Manitobans.
Other governments so indebted might rethink a misguided election promise to relieve older citizens of the broad social responsibility for an educated population that this year alone will cost $20 million. But the 2014-15 budget made perfectly clear the NDP has no stomach for controversy and will not risk poking an already cranky electorate.
With popular support in the basement, New Democrats have worked in the last months to convince taxpayers they are good stewards of public cash, trying hard to prove the approximately $300 million raised by the one percentage point hike to the PST will be spent on critical “core” infrastructure.
The one real relief in this budget came not so much in the columns of expenditures and revenues, bled almost dry of surprises and giveaways. Rather, it was in the frank, intelligent discussion of the Selinger government’s fiscal plan that this year rests on long-overdue restraint. The refreshing frankness came from Ms. Howard herself, a woman who mustered honest answers, stripped of partisanship, to the hard questions of media.
That gives some hope this minister, finally, might keep spending in check and hold Manitoba on track to a balanced budget.
» This editorial ran recently in the Winnipeg Free Press.
Republished from the Brandon Sun print edition March 10, 2014