Last week the province announced Budget 2017, which turned out to be rather unexpected. Many groups braced for big change – some with fear and some with excitement – following talks of deep cuts but, as the CBC put it, they wielded a butter knife instead of an axe.
Manitoba's Progressive Conservative government chose instead to make a series of modest changes to the provincial budget this year instead of engaging in the radical fiscal change some observers had wanted and others feared.
In the end, the budget indicates a small increase in overall spending, a small reduction in the provincial deficit and no drastic cuts to services. If they stick to their plan and achieve the expected revenue increase, the core provincial deficit at the end of the year is expected to be $779 million, down from the $890 million of last year.
At this rate, there is no way that the PC government is going to produce a balanced budget before the next election, which is scheduled for 2020, but they aren’t trying. They are expecting to reduce the core deficit again in 2018-19 to $705 million and then $585 million the following year.
When criticized from not going far enough in this year’s budget, the premier said deep cuts were never what the Tories ran on and that it wasn't the solution they chose, opting instead to “get to balance with the need to protect the services Manitobans count on".
And, while we haven’t heard much lately on the election promise to lower the PST, Premier Brian Pallister told media that they still plan to roll back the provincial sales tax by the end of his current term, even though they will have to find a way to make up roughly $300 million in lost revenue.
Of course, the NDP did their job as opposition and fired back by saying “This is a badly designed budget that is putting Manitoba on the wrong track”. They noted cuts to the health infrastructure budget, taxes on post-secondary graduates, cuts to the education and highways infrastructure budgets and decreased funding for arts and cultural organizations. They also stated that families and communities in the North were hit hard by the latest budget.
But, groups like the Manitoba Chambers of Commerce see the budget as a “good first step”. They are happy that it addresses concerns of business like removing regulatory burdens, indexation of tax brackets and dealing with the need for better labour market data to help address things like the continued need for skilled workers.
To me, Budget 2017 is just further proof that you can’t please everyone, no matter how hard you try. The truth is, there’s no easy solution. We have big problems with infrastructure, healthcare and even education and don’t have the industry to attract large amounts of revenue. Whatever route is taken to get to balance is bound to be a long and bumpy one. Let’s just hope the potholes along the way aren’t nearly as bad as the ones on many of our roads.