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Joseph Quesnel

Debt crisis looms in Manitoba

Europe’s debt crisis has already claimed Greece, Ireland and Portugal as victims. Next in line is Spain, which, by the end of 2011, will have a public debt of 68% of GDP due to rising deficits. Unemployment is skyrocketing and the government is considering drastic measures. Amazingly, unemployment went from 8.3% in 2007 to a disastrous 20.9% in May, the highest in the European Union.The age of high deficits, padded public sectors, and early retirement age is being challenged. When crisis hit, it was quickly discovered the fiscal model Europe was relying on was broken and needed fixing. Someone needs to pay the bills and you can’t survive in a society where takers outnumber makers.Manitoba, however, seems to be caught in la-la land, ignoring these larger signs outside its borders at its peril.The race between the three political parties seems to be more about who can hire the most health-care workers and add to our growing deficit the most.Instead of a long-term vision for prosperity, Manitoba politicians are engaging in a bidding war for votes in a race dominated by appeasing interest groups. Voters have been segmented into groups and the name of the game is appeal to specific voters.This lackluster election campaign comes on the heels of a recent Fraser Institute report ranking the fiscal management skills of Canada’s 10 provincial premiers. Premier Greg Selinger was third worst, bested only by Ontario’s Dalton McGuinty and Robert Ghiz of PEI.Manitoba’s poor record was driven by deficits and debt, which is second worst in Canada. The auditor general recently placed our province’s core government deficit for 2010-11 at $490 million, higher than previous estimates. Manitoba also has the highest personal income taxes west of Quebec and very high corporate taxes.So, we have European-style economic issues right here, but our politicians are… Read More

Making Manitoba a ‘have’ province

As Manitobans brace for an election, they should realize a desperate need for a different model – one that is far less political and dependent on government spending.Since 1999, our NDP government has been on a happy spending spree. Provincial spending per person has increased 65%, from $6,379 in 1999 to $10,535 in 2010, or 2.75 times faster than the inflation rate.How was this spending explosion possible? First, the NDP lucked out with a dramatic expansion in federal transfer payments. In 1999, the feds paid 32% of Manitoba’s bills. Last year, transfers had ballooned to 37% of the provincial budget.Second, and more disturbing given the world-wide stock market panic around over-borrowed governments in Europe, the NDP increased net provincial debt from about $10 billion in 1999 to $16 billion in 2010. So when you hear politicians talking about the need to “keep building” Manitoba and “not turning back”, take it with a big grain of salt.It’s easy to stuff more money into old policy models by promising more nurses, cops, stopping privatization, and the like, to buy votes – but only because the politicians are sending the bills to your kids.World markets are not tolerating profligate politicians in Europe and the USA anymore. Manitoba politicians should not delude themselves that their own little sandbox can remain an exception. At some point, the Tories in Ottawa will figure out that stuffing Manitoba and other have-not provinces with ever-rising transfer payments is a recipe for the big government mediocrity of the type so evident here.With that in mind, let’s consider ideas to mitigate the overbearing politics that hold Manitoba behind. These are partially taken from a recent Frontier Centre publication by respected law professor Bryan Schwartz called Revitalizing Manitoba:Healthcare: Promote innovation and reduce bureaucracy by making regional health authorities funders, not operators,… Read More