Commentary from Graham Starmer, President of the Manitoba Chambers of Commerce

December 19 2011

Manitoba has been spending beyond its means for years, racking up massive debt and mortgaging the future and with little accountability being demanded.

The Quarterly Financial Report which was released on December 16 showed a projected deficit of at least $989 million, greater than the previously budgeted $438 million, due to significant costs in fighting the flood as well as other pressures such as public safety and corrections, and supports for families.

The province’s accumulated debt as a percentage of GDP increased in 2011 for the fourth year in a row. The deficit for the year is going to top $ 1 billion.  Premier Selinger has not yet communicated what plans there are to manage that debt even though Minister Struthers has committed to balancing the books by 2014 which was a key promise from the fall provincial election campaign.

The minister noted the costs of the flood are expected to hit $815 million by the end of the 2011-12 fiscal year. What we do know is the provincial debt will worsen in 2011 and 2012 with this year’s extreme flooding.   While we do not blame government for a natural disaster, the Manitoba Chambers would like to see more accountability for not having their finances in order to deal with unforeseen expenditures like extreme flooding.

The government has admitted that flooding costs will cause the deficit to go up this year and that there is no comprehensive basin-wide plan for water management which is a critical issue for this province.

We are concerned as to why the government still only has a part-time finance minister or when the Premier plans to appoint a full-time one.  We are concerned about government spending.

Despite all the glowing words from the premier about Manitoba’s economy, he failed to lay out a strategy on how to deal with the reality that our economy is falling rapidly behind those of other Western provinces.  Saskatchewan and Alberta are leaving us further behind on economic growth, job creation, taxes and earnings.

The Manitoba Chambers of Commerce has adopted a number of resolutions to work on this coming year and that will be tabled at the Annual General Meeting in April which will beg the questions of:

Record Debt — Manitoba government has reached a record debt of $14.8 billion. That’s up 41% from $10.5 billion just since 2007. The province’s debt as a percentage of GDP grew for the fourth year in a row, hitting 26.2% in 2011.

Highest Taxes — Manitoba still has the highest personal income taxes west of Quebec. A two-income family of four earning $60,000 paid $3,042 in provincial income taxes in 2011. In Saskatchewan, that family paid $725.

Exits from the Province — Manitoba is still losing thousands a people a year to other provinces. Net interprovincial migration losses in Manitoba for 2010 were 2,421, up from 2,373 in 2009.

Economic Growth is poor compared to other western provinces— Manitoba is losing out in terms of economic growth this year in Western Canada. Manitoba’s GDP is expected to grow 2.5% this year. Saskatchewan and Alberta’s economies are projected to grow 4.5% and 4% respectively.

A Lake Winnipeg Base-wide Water Strategy – Rather than the piecemeal approach that has been the case in the past 10 years, the Chambers’ public policy committee is calling for serious action regarding a basin wide strategy for Lake Winnipeg.

This also includes an immediate and serious look at gathering real data before the next flood occurs so that a mitigation and adaptation plan can be employed that would be a planned, proactive, efficient, – scientific approach – to this crippling issue that we will likely have to live with for many years to come.

The flood was an unexpected expense nobody was able to predict,” Premier Selinger pointed out.  “This is the time to continue to have prudence and discipline. As we go forward and see what our recoveries are, we’ll make adjustments as necessary.”

On that note. the chambers are calling for a serious discussion with the IISD’s Water Innovation Centre regarding a basin-wide approach to gathering LiDAR data so that we can keep pace with our neighbours to the south and to assure that any decisions regarding flood and water management are well founded in science rather than best guess.

Let’s consider a proactive approach to efficient and a systemic change in how we do business.  Our future depends upon it.

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