An innocent fog of ignorance about Manitoba’s bloated public finances underlies the dismally-performing NDP
governance model. This explains why no one has really directly challenged the dominant, but extremely
vulnerable, NDP narrative of brittle at-risk public services constantly threatened by ruthless tax cuts and
heartless privatization. The fairy tale provides a free pass for the well-organized public sector union
establishment pulling the strings behind the NDP’s Wizard of Oz façade.
At some point the chickens come home to roost. Over the NDP’s 17-year term, public sector spending grew
wildly faster than the normal economy – an unsustainable recipe for debilitating deficits, debts and constant
greed for ever-higher taxes. Fraser Institute reports that Manitoba’s net debt is rising at the fastest pace in
Canada – 93.4% over the past 8-years.
Brian Pallister observed that public sector spending increased two and a half times faster than the normal
economy during the NDP’s 4-term run. Shockingly that translates into $3.1 billion of higher spending, enough
to eliminate payroll tax ($350 million), the school portion of property tax ($493 million), the land transfer tax
($90 million), and corporate income tax ($590 million). This before either cutting PST by 70% (or 5 points) or
reducing income tax by 50%. Voters hear none of this except the gibberish that public services are perpetually
underfunded and vulnerable to tax cuts.
Prior to calling the election, Premier Selinger issued yet another blockbuster deficit forecast, again setting back
the year in which he, if re-elected, plans to balance the budget. Ever the class warrior, he also trotted out yet
another tax increase in his election platform – proposing a ludicrous surtax on the wealthier, the practical effect
of which would be lower revenue as high-earners reorganize their affairs to minimize taxation.
Taxes are necessary to fund important public services and infrastructure investments. But taxes are also a
drain on economic growth and innovation. Government should minimize, simplify and optimize taxes to attract
investment and jobs while encouraging entrepreneurs to flourish.
With that in mind, assume Selinger’s gang is defeated and reforms begin to improve services while extracting
substantial savings by converging spending to national benchmarks. This would free breathing room for an
aggressive, broad-based tax reform agenda that simplifies, lowers and eliminates taxes to boldly move
- Raise income tax exemptions and index – cutting taxes for low-income people while ending stealth tax
increases as rising incomes push taxpayers into higher brackets. (Conservatives)
- End payroll tax – this tax reduces wages for workers while discouraging job creation,; most provinces have
no payroll tax. (Liberals)
- Reform education funding – remove education property tax and pay for schools from general revenues like
- Reduce/reform sales tax – lower the PST; convert to a harmonized sales tax on a revenue neutral basis
aligning Manitoba with most other provinces, eliminating unnecessary duplicate paperwork/bureaucracy.
Allow businesses tax credits for investing in new equipment and factories. Allocate one percentage of the
HST to municipalities on a per capita basis.
- Freeze Hydro rates – – ahead of a comprehensive review of the expansion fiasco.
- Restore the balanced budget law to include referendums on tax increases; phase in spending limits based
on economic and population growth.
Graham Lane, retired chartered accountant, chairs Manitoba Forward (www.manitobaforward.ca), seeking
sensible growth-oriented public policies.