This coming Tuesday the NDP government will unveil the 2010/2011 provincial budget and it promises to be a budget like no other under the NDP.
Since being elected in 1999, the NDP has been fortunate to govern during a time when revenues were increasing at an astonishing rate. While Manitoba’s economy was fairly flat during the past decade, other provinces were experiencing a boom and as a result Manitoba took in record transfer and equalization payments. The success of other provinces meant that the NDP government had ample amounts of money to spend, and they spent it all and then some.
In fact, between 1999 and 2009, revenues to the province increased from $6 billion annually to $12 billion annually. This increase of money that was coming to the province from the success of other provinces allowed the NDP government to spend record amounts of money. Despite all of this money, they still increased the province’s debt by billions of dollars and raided money from Crown Corporations like Manitoba Hydro.
What makes this budget different is that the economic boom in other provinces has ended and that means that transfer and equalization payments will not continue to grow at record rates. The slowdown in the economy also means that there will be less tax revenue for the Manitoba government and all of this has resulted in the NDP turning a projected $60 million surplus for this year into a record $600 million deficit.
And for the first time since coming to government, the NDP will have to make tough decisions with this budget or they will sink Manitoba even further into debt which will result in future tax increases or service reductions. Governing is often about making difficult decisions, but it is something the NDP government has not had to do as a result of being able to spend its way out of past problems.
The good news is that there are ways the NDP could show Manitobans they are serious about controlling spending. The first would be reversing a decision to waste $640 million building a new Manitoba Hydro transmission line from the north along the west side of the province. Building that transmission line on the east side of Lake Winnipeg is the most direct route and would be safer, shorter and more secure. The eastern route is the route preferred by Manitoba Hydro itself and if the NDP government is serious about saving taxdollars, they will start by allowing Hydro to build on the east side of the Lake.
Tuesday’s budget will be very different for the NDP government. They are going to actually have to show that they can manage a tight budget and not just simply keep spending wastefully.
