In the midst of the global financial crisis provincial governments across Canada are rushing to put in place plans to lessen the impact on their residents and the finances of their respective provinces. On October 21st Saskatchewan announced how it would deal with the crisis and a few days later the government of British Columbia unveiled its plan.
NDP Premier Gary Doer hasn’t been as quick to respond as many of his provincial counterparts. He did finally announce last week that he would call the Manitoba Legislature back into session on November 20th for both a Throne Speech and an economic statement. Given the moves by both Saskatchewan and British Columbia, Premier Doer may have decided to delay his plan of action, hoping there wouldn’t be a comparison with our neighbors to the west. He certainly has a tough act to follow.
In Saskatchewan, Premier Brad Wall announced that his government would be bringing in the largest single-year income tax reduction in the province’s history. By increasing the basic personal tax exemption by $4,000, a family with two working parents and two children will save $1,320 per year. In all, the announcement means that 80,000 less people will be paying provincial tax in Saskatchewan.
Saskatchewan also announced that the province would be accelerating its debt reduction plan and would be immediately reducing its provincial debt to the lowest level since 1988. And to top it off, Saskatchewan will increase by 50% it’s funding of road construction and repair.
In British Columbia, Premier Gordon Campbell responded to the financial crisis by announcing that his province would immediately cut income tax by three per cent and would cut small business taxes as of December 1st of this year. In addition, it announced it would accelerate planned infrastructure projects to help bolster employment.
Many Manitobans may be wondering how both Saskatchewan and British Columbia are able to reduce taxes and undertake infrastructure projects to minimize the effects of a financial crisis without running immediate deficits. The reason is both of these provinces have, over the past decade, been building their economies and resources knowing that it was important to prepare for an inevitable economic downturn.
Under the NDP government in Manitoba for the past eight years, instead of prudent financial planning there has been rampant unsustainable spending. Instead of building up our economy, the NDP has been building up our debt.
On November 20th we will find out what plan the NDP has to minimize the impact of the global financial crisis on Manitoba but given its track record of spending, there likely isn’t the ability to take the measures of either Saskatchewan or British Columbia. After eight years in government, Mr. Doer needs to be able to tell Manitobans why the actions of Saskatchewan and B.C. are such a tough act to follow.
