The economic crisis that began in 2008 has touched almost every country and has left economies fragile and workers worried about their jobs. Even in Canada, which benefited from a strong banking system, there have been thousands of jobs lost.
The financial crisis has also been felt in Manitoba which has seen tax revenues decline and, largely as a result of poor economic planning during stronger financial times, is now running a record deficit under the NDP government of more than $600 million. Even in southeastern Manitoba, where there are still good indications of economic growth, some corporations reduced employment as demand for their product decreased.
What seems clear is that, unlike past recessions, the recovery from this economic downturn is going to be slow and potentially fragile. Rapid economic growth, which often occurs after recessions, is expected to be replaced by modest growth or no growth at all in some areas. And many job losses may not be recovered for years.
In this environment it is important that government does not place a greater burden on taxpayers than they are already carrying. There is no quicker way to end a fragile recovery than by trying to take more money from taxpayers. It slows consumer spending and impacts consumer confidence.
Tax increases will be a difficult thing for the NDP government to resist as they, for the first time since taking office in 1999, deal with declining revenue. In the past the NDP have been able to throw money at various programs and projects without ever having to prioritize because of the billions of dollars of increased transfer payments from Ottawa that came from economic growth in other provinces.
The question is whether Greg Selinger and the NDP are able to reign in spending and set priorities in tough economic times without asking people to pay more. In the past when the NDP have looked to take more from people’s pockets they have increased user fees or applied the provincial sales tax to more products. While the NDP government didn’t call them tax increases they have the same effect. There is only one taxpayer and regardless of how the money is taken it’s coming from the same pocket.
The recovery from the financial crisis may have started but it is expected that the road ahead will be a long one with many bumps along the way. Government’s who are expecting taxpayers’ to cough over more money in these times not only risk hurting the economy further but demonstrate that they don’t know how to prioritize resources.
Asking Manitobans to pay more because of poor management and poor planning isn’t the way to go. Unfortunately, it’s the path that tax and spend governments like the NDP almost always take.