One of the things that Manitoba has been known for in the past is that its economy wasn’t prone to significant swings either upward or downward. While we don’t see the significant upswing in the economy that Alberta or Ontario do, we have seldom seen huge downturns either.
That has historically been because Manitoba’s economy was fairly diversified. It didn’t rely exclusively or even predominantly on one industry or resource. In a province like Alberta, a drop in the world price of oil has a significant impact throughout their economy. In Ontario, a slowdown in manufacturing in the automobile industry sends shock waves through the economy.
While Manitoba has felt its stable economy helped to avoid provincial finances bursting like a bubble when the economy slows, that may be changing as a result of how the NDP government has managed the province over the past several years. While Manitoba is not reliant on oil or auto manufacturing jobs, we have become increasing reliant on handouts from Ottawa and wealthier provinces in the form of transfer and equalization payments.
This dependence has grown so strong that today more than a third of the money the NDP government spends each year comes from Ottawa and other provinces. If the economy weakens in Canada and Ottawa and other provinces are unable to provide as much in transfer payments,it means one of the largest sources of provincial revenue will be impacted.
No doubt that is why when Premier Gary Doer went to Montreal earlier this week to meet with other provincial leaders, at the top of his agenda was a push to ensure that transfer payments to Manitoba would not be reduced with a slowing economy. Just as Alberta’s economy is tied to oil and Ontario’s tied to manufacturing, Manitoba’s economy has become tied to transfer payments as a result of Premier Gary Doer and the NDP.
During the past eight years the NDP government has ignored those who warned that Manitoba was becoming too dependent on transfer payments and needed to begin ensuring it could stand firmly on its own two feet. The policies and spending practices of Gary Doer and the NDP have made Manitoba dependent on Ottawa and other provinces.
While Manitoba did not enjoy the same level of economic growth that most other provinces did in Canada over the past several years, some took comfort in the fact that when the economy slowed, the province would not face a significant downturn either. However, after years of making Manitoba more and more dependent on transfer payments, Manitoba Premier Gary Doer has placed the financial stability of the province on a bubble he has every reason to worry may be about to burst.
