Manitoba government to deliver more red ink in today's budget

The government has not ruled out tax hikes as it tries to grapple with a deficit last year of $394 million

Chris Young/CP

Chris Young/CP

WINNIPEG – Manitoba’s NDP government is expected to remain in stimulus mode when it delivers its annual budget Thursday – adding to a string of deficits in the name of boosting infrastructure spending and potential job growth.

Finance Minister Greg Dewar, a long-time backbencher who took over the portfolio last fall after a partial caucus revolt against Premier Greg Selinger, has already said the province is pushing back its plan to balance the budget in 2017 by one year.

“Our budget … will focus on what’s really important to Manitobans, and that is to create jobs, create opportunities. We’ll continue to grow the economy,” Dewar said recently.

The government has not ruled out tax hikes as it tries to grapple with a deficit last year of $394 million, and has raised several taxes and user fees since the deficits started in 2009.

The red ink has provided fodder for the Opposition Progressive Conservatives, who point out that deficits have continued despite the NDP taking in hundreds of millions of dollars more each year since expanding, then raising, the provincial sales tax.

“Even with the biggest tax hikes in Canada, the NDP just simply can’t manage. They’ve got a spending problem,” Tory Leader Brian Pallister said earlier this week.

The 2013 decision to raise the sales tax to eight per cent from seven was a tipping point for the government. It broke an election promise, and came one year after the tax was expanded to apply to more items such as haircuts, tattoos and many types of insurance.

The government’s popularity quickly plummeted in opinion polls, and last fall, five of Selinger’s most senior cabinet ministers challenged his leadership and resigned their portfolios. Selinger survived the leadership challenge at an NDP convention in March, but polls suggest the NDP is well behind the Tories with an election slated for next April.

Despite the controversy, Selinger is not straying from his message that new taxes are needed to preserve front-line services, build roads and create jobs. He says the Tory alternative would be deep spending cuts.

The government has launched another round of “Steady Growth, Good Jobs” advertisements, touting jobs in the construction industry and other trades. But the government’s economic claims have been questioned.

Statistics Canada reported this week the province’s economy grew by 1.1 per cent in 2014 – a smaller rate than most other provinces and half of what the government’s predicted in last year’s budget.