EDITORIAL: A good news, bad news budget

EDITORIAL: A good news, bad news budget

The good news with the Pallister government’s 2018 budget is the provincial deficit is being reduced and overall spending is finally being controlled.

The bad news is government is raising overall taxes to help them move towards a balanced budget.

Finance Minister Cameron Friesen unveiled his third budget Monday, which reduces the core government deficit to $639 million from $779 million. The summary deficit, which includes outside agencies like Crown corporations and school divisions, is falling even further to $521 million from $840 million the previous year.

That’s a substantial improvement to government’s bottom line. Government must, as an overarching financial objective, bring its spending in line with revenues. It cannot continue down the road the previous government was travelling, which was to post indefinite deficits and run up unsustainable levels of debt. That’s a path that leads to financial ruin, where government spends increasing amounts of tax dollars on debt servicing and has less money for front line services every year. That’s not a responsible or reasonable path to take.

As it is, provincial debt is still projected to grow this year, as government continues to borrow to pay operating costs and to finance past and present capital projects.

The Pallister government is even scaling back on capital projects in its quest to slow the growth of debt and to eventually start repaying its liabilities. It has no choice. That’s why spending on strategic infrastructure, including highways and bridges, is being reduced this year by 6.9% to $1.56 billion from $1.68 billion.

Capital debt repayment in the Department of Infrastructure now makes up 70% of its total budget. That’s just to pay for past capital projects. That’s not sustainable.

The mistake the Pallister government has made, though, is in raising taxes further to help balance the books. Between the new carbon tax which takes effect Sept. 1, a cut in income taxes effective Jan. 1, 2019 and changes to a number of other taxes, the province is bringing in an overall tax increase of $117 million in 2018-19. On an annual basis, fully implemented, that will be a net tax increase of $95 million. Manitobans will pay more to government by the end of this fiscal year than they’re paying now.

Manitobans are already taxed to the max. They cannot afford to keep paying more. They’ve been subjected to tax increases every year at either the municipal, school division or provincial level, sometimes all three at the same time. This can’t go on. It’s wrong.

The Pallister government should reverse this decision.



Write a comment