View From the Legislature

Last weeks provincial budget, the first under the new NDP government, was both a reflection of the past and perhaps a look into the future. The projected budget deficit of $800 million was a reminder of the type of deficits the last NDP government rang up under former Premier Greg Selinger. In fact, the size of this deficit is usually only seen in Manitoba when the province has to deal with significant flooding or forest fires. But this isn’t a budget that is the result of a natural disaster, simply old fashion NDP spending.

The large deficit is in stark contrast to the last set of financial books that were audited by the independent provincial auditor. That budget, for the 2022-2023 fiscal year, resulted in a quarter billion dollar surplus in Manitoba. The NDP have managed to swing the books by a billion dollars and run one of the province’s largest deficits. And that is only after a few months in office.

In somewhat related news, British Columbia, the only other province that is governed by the NDP, suffered their third consecutive credit rating downgrade this week. The credit rating agency, S&P, cited the risk caused by “outsize” deficits as the reason for the downgrade. This will result in that province paying higher interest rates for its borrowing. At the same time that the new Manitoba NDP government is running deficits that remind Manitobans of the last NDP government, it is hard not to look at B.C. and wonder if that is not what is to come.

After all, the last time the Manitoba NDP had their hand on the provincial books, not only was the credit rating impacted, it resulted in record increases in taxes in our province including the raising of the provincial sales tax (PST). Even in this first budget, the NDP are projecting tens of millions of dollars in increased revenue from higher taxes on homeowners through the reduction of credits and cancellation of rebates. As Manitobans begin to receive their property tax bills and see the impact of these tax changes, they are likely going to discover they are paying more taxes this year than last.

At a time when Manitobans and all Canadians are continuing to deal with the impact of inflation over the past year and higher interest rates, they cannot afford to take on higher taxes of any kind. Already last week, the federal carbon tax was increased. And while the Manitoba NDP refused to push back on the Liberal carbon tax increase like other provinces, increasing taxes provincially just provides Manitobans more reasons to be concerned.

In these early days of the new NDP government, there is already growing concern about what the provincial finances will look like by the end of their term. Because what Manitobans know for certain, is that when the deficits balloon and the debt grows, it ultimately is them who end up paying the bill through ever increasing taxes. The new NDP governments budget was a reflection of the past. And for many it’s a reflection they would rather not see again.