View From the Legislature

That didn’t take long. Just a few months after taking office the NDP are reporting that they are now on track this year for one of the largest deficits in Manitoba’s history at $1.612 billion. And along with it, the new NDP Premier is stating that he is not ruling out increasing taxes and cutting schools and health care projects.

This will come as a surprise to many Manitobans. After all, the independent provincial auditor for Manitoba just reported a few weeks ago that Manitoba had a budget surplus in the last fiscal year of over a quarter of a billion dollars. No new provincial government in recent memory has been left with such a large budget surplus coming into office.

And while the current years provincial budget was projected to have a deficit, it was five times less than what the NDP are now expected to run. Part of this change in fiscal forecasting is from the fact that Manitoba Hydro revenues are expected to decrease as a result of a dry summer. That type of variation is not unusual as the weather isn’t always predictable. But much of this is the result of the NDP having to account for hundreds of millions of dollars in election promises that they simply didn’t budget for and their desire to raise taxes.

The NDP significantly under-costed their promises during the election and were not transparent with Manitobans in terms of what they would cost and how they would be paid for. In fact, during the election the NDP Leader made a number of assertions about using unallocated funding in the budget to pay for his election promises without any details of where that unallocated funding actually existed. It is now clear that the NDP was simply making these figures up during the election and the result is a record NDP deficit that Manitobans are going to be left to pay for.

This is particularly troubling because Manitoba, with a recent surplus and strong economic growth, was beginning to turn the fiscal corner. It was also allowing Manitoba to maintain a stable tax environment for its residents while undertaking important affordability measures to help make life a bit more affordable.

Now, after admitting to running a near historic deficit, the NDP have said they will consider raising taxes and cutting previously planned projects such as schools and personal care homes. During the recent provincial election many Manitobans warned that a return to the NDP would be a return to big deficits and higher taxes, it may just be surprising how quickly this has come about.

The Manitoba Finance Minister told reporters on Tuesday that next week he will speak more about cuts that the NDP intend to make to education and health capital as well as potential tax increases that may be coming to Manitoba. Sadly for Manitobans, balanced budgets and strong growth seemed to have quickly turned into massive deficits and higher taxes in the early days of the NDP government.