Curing the hangover

Hey there, time traveller!
This article was published 02/01/2012 (5410 days ago), so information in it may no longer be current.

It’s a staple of political cartoonists around the world — a new year represented by a baby with a top hat and banner who replaces the old, bedraggled year that was, as he steps down with his walking stick in one hand and his beard in the other.

For the new year of 2012, however, an ice pack would be more fitting than a top hat, as Manitobans will have to deal with a nasty 2011 financial hangover.

As much as we want the new year to be full of promise and inspiration — and it is — there are some very real headaches that must be dealt with in 2012 that have their roots in the previous year, and a lot of it comes down to budgets and flood spending.

The province ran a budgetary deficit of nearly $1 billion over the past year, and unless the NDP government intends to keep running deficits for the duration of its term in office — thereby handicapping future administrations with a monster of a provincial debt — it will have to come up new ways of generating cash.

That can take the form of new taxes, slashing department spending or increases to user fees — most likely a combination thereof. Just last week, Conservation Minister Dave Chomiak put an end to three years of free provincial park admission with his announcement of new park fees that will take effect on May 1. They will include a $4 a day entry fee per vehicle, $8 for three days and $30 for a yearly pass. There will also be modest increases in seasonal camping and rental rates.

While the approximately $3 million in revenue from these new fees is destined for capital improvements to Manitoba’s 86 parks, it’s obvious that the province is looking for ways to increase the amount of money flowing into its coffers. We believe this is just the beginning.

And like any other year, there will be new bills to pay. At this point, it’s still difficult to tell what will happen when spring rolls around, but the last thing Manitoba needs is another year of massive flooding. There are still flood claims to be paid and infrastructure to be fixed in southwestern Manitoba as it is.

Of course, the news isn’t all bad. Last month, the RBC Economics Provincial Outlook was rather rosy, with Manitoba’s economy expected to continue on a “solid growth path through 2013,” according to the report. RBC’s forecast suggested that the provincial economy will grow by 2.5 per cent in 2011, 3.2 per cent in 2012 and three per cent in 2013. Slow and steady growth means the provincial government can count on continued economic stability in Manitoba while it makes some budgetary decisions for 2012.

But make no mistake, we expect the 2012-13 budget to be bereft of large new spending plans. Instead, we hope the province will make clear its plans to tackle the deficit and our growing debt. That would be the best hangover cure.