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Budget ignores elephant that is Hydro

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12Apr

By: Graham Lane
Published: April 12, 2017, Winnipeg Sun

Brian Pallister’s second budget represents one small step forward, a reduction in departmental expenditure increases. But, his deficit is still far far too high — $849 million with further massive deficits forecast for the two years ahead. Ominously, he ignored the elephant in the room — the Hydro debacle: no word of relief coming for ratepayers.

Wisely, he took advice on two files — no carbon tax, and ending a wasteful tax credit for post-secondary graduates. And, while there are no tax increases in the budget, it brings to mind the innumerable ways government already removes us from the fruits of our labour.

Government inflicts on us income taxes; general sales taxes — GST, PST; alcohol, gasoline and tobacco taxes; land transfer, frontage, and impact property taxes; capital gains tax; education levies through property tax bills; entertainment tax; government levies on utilities funded by ever-higher rates; probate fees; Canada’s most outrageous traffic fines; and, permit and other fees and licenses. Once marijuana is legal, government will take its piece, profiteering as it now does for gambling and alcohol.

Before the First World War, governments were small and funded by tariffs on exports and imports. Income tax came in the guise of a temporary tax to fund the 1914-18 war effort. While, in 2017, the top income tax bracket takes “only” 54% of additional income, governments have expanded and diversified their streams of taxation, gaining an incredible portion of our incomes. Governments’ deficits and wanton borrowing are due to excess spending, not inadequate taxes.

The final blow is that governments don’t tell us the real picture of their risks, positions and options. They play games with disclosure and unfulfilled promises, reducing our opportunity to understand what is going on. This year’s provincial budget particularly ignores the woes of Hydro, woes eventually to strip even more money off us for light and heat in cold years to come. Manitoba Hydro, if it was a private company operating in a competitive environment, would be insolvent. It isn’t only because government, and the buck stops with you Mr. Pallister, forces us to pay for mistakes made by politicians and Hydro.

By ignoring the full implications of the Hydro debacle in his budget, Pallister sets the stage to push rates up and up, draining away whatever economic advantage Manitoba ever had from once low rates. Mistakes made by government-Hydro, through an unnecessary and wasteful expansion. will increase the government’s take from the utility. Our misery, government’s gain.

The big story is that the Manitoba paradox of having the most expensive but lowest performing services drifts along unchallenged. Yes, the usual suspects in the media squawked about some tweaks in the health-care system that comes nowhere near to needed transformational policy. Same across the board. The left-wing spending coalitions couldn’t believe their luck, that what will surely be Pallister’s toughest budget was basically NDP business as usual.

Ideally Manitobans would have more serious political options — dedicated to fiscal responsibility. We need smarter, better public services, ones with serious capacity to seek better outcomes from our dollars. Recent polls reveal eroding support for our new government — even with weak opposition parties and before what turned out to be a “sad sack” budget.

— Graham Lane leads Manitoba Forward (manitobaforward.ca).

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