Taxpayers should doubt government’s balanced budget plan

Manitobans can’t afford for the government to maybe give them a balanced budget four years from now. Pictured: Manitoba Premier Wab Kinew. Photo Credit: Wab Kinew/X. 

Since being elected, Premier Wab Kinew has not stopped singing a song of bringing fiscal sanity back to Manitoba.

But the tune of that song has fallen flat in the government’s latest budget. That’s because the budget ratchets up spending to record levels and projects an almost $800 million deficit. And the government isn’t planning to balance the budget until four years from now in 2027-28. That’s a whole university degree’s worth of waiting.

That is the exact opposite of fiscal sanity. The Manitoba government has only balanced two out of its last 10 budgets. Kinew and Finance Minister Adrien Sala don’t have the luxury to be able to push the deficit problem further into the future.

In Sala’s ministerial mandate letter, the document where the premier lines out what he expects of his finance minister, he says he expects Sala to “repair the damage to our finances caused by the previous government, strengthen Manitoba’s credit worthiness and balance the budget within the first term of government.”

That’s not what’s happening in this government’s first budget. By the end of this year, the provincial debt will be $35.4 billion or $23,776 per Manitoban. Since 2019, the per-person debt in the province has grown by about 25 per cent and it’s growing by more than $740 a person this year alone.

But the interest payments on that debt is the problem with much worse consequences for taxpayers. 

The government is spending $2.3 billion on interest payments this year. That’s about $189 million per month. Imagine the priorities or tax relief the government could provide if it didn’t have to write a cheque for $189 million every month to cover the interest on the debt.

Sala said in his budget speech the government’s plan is a fiscally responsible one because it charts a path to balance. But the problem with that is governments of all types promise taxpayers that they will fix the budget in the future but rarely follow through on that promise.

It’s procrastination.

Former premier Heather Stefanson’s last budget predicted a $363 million deficit, but by the time the year was over it ballooned to more than $1.9 billion.

When Prime Minister Justin Trudeau was elected in 2015, he promised that the federal government would balance its budget in 2019. But that didn’t happen and now federal government debt is doubled.

Even if the Kinew government finally balances the budget in 2027-28, the surplus will be a measly $18 million. That’s a rounding error amount of money in a provincial budget. A surplus that small could be pushed back into deficit by stiff breeze. By the time the budget is balanced, the government will have wasted at least $9.6 billion in interest payments or about 40 percent of this year’s budget.

But the assumptions that the government is using to back the tiny surplus is the bigger problem.

The government is predicting that over the next four years, government revenues will increase by about $2.5 billion. That’s not unrealistic. What is unrealistic is that it also predicts spending will only increase by $1.7 billion over the same time. But the government is increasing spending by about $1.4 billion this year compared to last year’s budget.

Kinew and Sala would have to have a serious change of heart if Manitobans are supposed to believe they will suddenly limit spending increases over four years to just over the amount they increased in one.

Taxpayers shouldn’t believe the fluff and they need to demand action. In politics, four years is a lifetime, and every year the government pushes back a balanced budget means more debt and more crushing interest payments.

Manitobans can’t afford for the government to maybe give them a balanced budget four years from now. Taxpayers know those promises aren’t often kept. Kinew needs to give taxpayers a balanced budget now, not the future promise of one.

Gage Haubrich is the Prairie Director for the Canadian Taxpayers Federation

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