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Changes needed to boost jobs

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16Sep

By: Graham Lane
Posted: Winnipeg Sun, September 16, 2016

Manitoba has been shedding jobs. And, last year saw net migration out to other provinces hit 7,000. Being in the largest downturn in the oil patch since the 1970s National Energy Program, the argument that Manitobans are leaving for Fort McMurray isn’t the problem.

Yet, despite consistent damaging out-migration, Manitoba’s population continues to grow through immigration. We welcome those coming from other countries. Even before Manitoba became a province (1870) our population and economic growth was driven by newcomers. But, how long before the immigrants’ children look to other provinces for work? Unfortunately the path we have been on is not economically sustainable.

Bad news on the job front – job losses in mining, forestry and at the port of Churchill. Is this government’s fault? No, but when international companies make hard decisions on downsizing they don’t choose places of high taxes and burdensome regulations. Recently that place has been Manitoba.

Fortunately the reverse is also true. When companies look to invest and grow they prefer jurisdictions open for business. Yorkton Saskatchewan has seen an explosion of development driven by two new canola processing plants. Yorkton is only 100 kilometres from the Manitoba border, so why wasn’t at least one of those plants built in Manitoba? Saskatchewan developed policies and regulations encouraging investment while the-then NDP Government of Manitoba sat back as people left to fill the jobs elsewhere that investments created.

It shouldn’t be government’s role to create jobs. Government job creation contributed to the financial mess Manitoba finds itself. Bloated bureaucracies, hydro infrastructure spending divorced from market realities – the list of government inspired development failures from our recent past could fill pages.

Government’s responsibility is to create regulatory and policy environment that will attract investment, which in turn would create permanent good paying jobs. Such jobs are based on market reality and not what some central planner on Broadway thinks might be a good idea.

Premier Pallister needs to launch strategic regulatory and policy initiatives to attract new investments and jobs. The first place to look is at the present level of taxes and fees. Right now Manitoba taxes businesses at a rate higher than just about every other jurisdiction around us – Ontario being the exception. Canada’s largest province is in a downward economic tailspin that we have no desire to follow. Manitoba’s tax burden has become a tax on jobs and that needs to quickly change.

The premier should sit down with Manitoba’s job creators (e.g., agriculture, mining, forestry, aerospace, manufacturing) and have them outline the costs and regulatory red tape preventing them from investing more in Manitoba, or tempting them to pull up stakes and move. Those decision makers need to be at the table if we are going to correct the mistakes of the past.

The economic head-winds faced today will blow harder. The NDP relied on growing transfer payments from resource provinces like Alberta. But, transfers are at risk as the impact of low oil prices hits the entire country. There is no time to waste if Manitoba is going to reverse the trend that has resulted in some of our brightest and best leaving.

We need concrete action from the new government before the end of the year.

Graham Lane chairs Manitoba Forward (manitobaforward.ca).

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