A mop might be a nice choice for those wondering what gift to get a newly elected premier of Manitoba.
Manitobans did not elevate Progressive Conservative Brian Pallister to the province’s highest office in order to usher in a bold new future, but rather to clean up a mess. And it’s an enormous mess. But Manitobans are counting on the new government to quickly create and implement a comprehensive plan to restore the province’s finances.
It’s important to recognize the full spectre of the current situation. Manitoba’s total net debt is more than $21 billion. The deficit this year is $773 million. And this year it cost $842 million just to cover the interest on the debt. The province’s credit rating has been downgraded. This is the type of debacle that could impact generations to come.
How will the new government clean up this mess? It’s an open question. The PC platform provides no commitments as to when the budget will be balanced or how the debt will be repaid.
And yet, Manitobans put their trust in a new government to deal with this mess. They deserve a plan. And that needs to be the government’s first priority.
The PC platform does promise a value-for-money audit of all government expenditures to deliver “smarter spending, smarter investments and better allocation to support key government priorities.” In other words, the audit will make priorities. Some priorities may merit new spending. But the audit will have to identify low priorities that the province can no longer afford.
This plan needs to be implemented quickly because here’s the reality: the province’s debt will go up by nearly $6.5 million today and every day until the budget gets balanced.
This audit may well define the success of this government. If it’s merely busywork that offers only vague intentions to defeat the deficit and pay down debt, the taxpayers’ trust will be broken. Manitobans deserve a comprehensive plan that clearly outlines specific measures and milestones.
These measures and milestones are critically important. To its credit, the previous NDP government made some specific commitments. It said it wouldn’t raise the PST. It said it would balance the budget in 2014-15. The NDP provided specific measures to evaluate their performance, failed spectacularly, and voters judged them accordingly.
The new PC government owes taxpayers a plan. When will the budget be balanced? What is the plan to repay the debt? How will the new government clean up this mess?
While the new government ponders these questions, it’s important to note that voters have taken one deficit-fighting tool off the table: tax hikes. The previous government tried that. It raised the PST after promising not to and refused to hold the legally required referendum. It was a cynical move that insinuated that taxpayers were at fault for the province’s financial problems because they weren’t paying enough. So the government forced taxpayers to pay more. Yet the problems remained. In fact, the deficit is going up despite the increased revenue.
The PC government has promised to reverse the PST hike. It’s also promised to index tax brackets to reflect inflation. This tax relief is a recognition that the government needs to solve its own budget problems rather than simply putting the pressure on family budgets through tax high taxes.
It isn’t going to be easy to clean up this mess, but Manitoban voters have chosen hard work over procrastination. And hard work pays off. As the debt goes down, interest costs will go down. As tax relief takes effect, Manitoba will become more competitive and create more room for the economy to grow. It’s going to take hard work and a detailed plan, but a Manitoba with a balanced budget and solid debt repayment strategy is a legacy that’s worth passing on to future generations.
Todd MacKay is the Prairie Director for the Canadian Taxpayers Federation.
