View From the Legislature

Budget Balanced: Challenges Ahead

  • Kelvin Goertzen, Author
  • Member of the Legislative Assembly, Steinbach

In 2016 when the Progressive Conservative Party was elected to government in Manitoba, one of the key platform promises was that within two terms the provincial books would be returned to balance. Throughout Manitoba, and certainly in the southeast part of the province, there was a desire to return to proper fiscal management after years of increasing deficits, debt, and higher taxes.

Part of the reason for the commitment at the time was that Manitoba needed to be in a strong financial position in case there was a need to respond to an emergency. Of course, Manitobans have seen emergencies before in the form of floods, fires and even ice-storms. What was not anticipated in 2016 was a global pandemic that would greatly impact revenues and expenses.

And yet, despite the challenges along the way, the Manitoba government announced on Tuesday that for the first time in a very long time, the books of the province had ended up in a surplus. The final accounting has been completed on fiscal year 2019-2020 (which ended on March 31) with the province ending up with a $5 million surplus. This surplus was achieved while still increasing investments in areas like Health, Education and Families to record levels and reducing the provincial sales tax (PST) as promised to 7%. Most importantly, had this effort not been undertaken and had Manitoba continued the same path set by the former government, the deficit for 2019-2020 would have been more than $1.5 billion.

A deficit that large with essentially no rainy-day fund would have made it exceedingly difficult for Manitoba to respond to the very challenging times every jurisdiction in the world now faces. While nobody would have foreseen a pandemic, there was good reason to prepare the provincial finances for any emergency. That is seen very clearly today.

Of course, the current fiscal year (2020-2021), will be vastly different than any the province has ever faced. Even though Manitoba has performed relatively well both fiscally and from a health perspective during the pandemic, every government’s books will be significantly impacted. But, because of the discipline and work that has been done over the past four years, Manitoba is in a much better position to weather this storm than it would have been otherwise.

The road back to a balanced budget was not always an easy one but we see today, more than ever, why it was important. There are significant challenges ahead and Manitoba is now in a much better position to respond than it has been in years. And ultimately, it is Manitobans who deserve to be credited for this achievement because they saw the need for more fiscal responsibility and supported the efforts to get there.

Keeping a promise is important and balancing the books as committed to in 2016 is significant for Manitobans. But there are now new and greater challenges that must be met. And so, with the support of all Manitobans, the work continues as we meet the new challenges of the day.