Budget 2017 fails to deliver on innovation and efficiencies to tackle deficit

For all the talk of Budget 2017 as a course correction in Manitoba’s fiscal trajectory, the first full budget by the new provincial government is largely status quo. Yet bolder action was more than warranted, it was imperative, says Winnipeg Chamber of Commerce president Loren Remillard.

Manitoba's 'wait and see' budget is uninspiring, says Winnipeg Chamber of Commerce

While the Winnipeg Chamber of Commerce sees positive steps in the provincial budget delivered Tuesday, urgency in reducing Manitoba’s deficit is disconcertingly absent in the budget, says president Loren Remillard. (Gary Solilak/CBC)

For all the talk of Budget 2017 as a course correction in Manitoba's fiscal trajectory — reshaping government and making hard financial choices — the first full budget by the new provincial government is largely status quo. An exercise in Manitoba finding its bearings.

Yet bolder action was more than warranted, it was imperative.

There are certainly positive measures to be cheered. Indexing personal income tax brackets and basic personal exemptions is a simple but powerful step in the right direction. Aggressively cutting outdated and ineffective red tape without costing taxpayers a dime likewise shows a government that's listening. After years of excessive, runaway growth in government spending, reining in spending to 2.1 per cent annually is no small feat.

But urgency in reducing Manitoba's deficit is disconcertingly absent in this budget. Our provincial debt will climb again this year, with annual debt servicing fees at approximately $1 billion.

One billion dollars: that's roughly the annual operating budget of the City of Winnipeg. You could build two new Winnipeg international airports every year for a billion dollars.  And each year, Manitoba pays more to cover just the interest on debt, with fading hope of actually paying down the principal.

That's not to say the Winnipeg Chamber of Commerce believes radical cuts are called for, any more than we back gross largesse to spur economic activity. The current government inherited a financial mess after years of overspending and it'll take both prudent trims and strategic investments to fix.

More, it needs a reinvention of how government delivers services if Manitobans are ever going to get the savings and the outcomes they deserve. Those innovations and efficiencies are what's missing in this budget.

They're hinted at. There are signs they're coming, particularly in highlights of the Financial Performance Review. But substantive action hasn't been taken in a budget that cries out for it.

Finance Minister Cameron Friesen was correct to take on Manitoba's patchwork tax credit system, says the Winnipeg Chamber of Commerce's Loren Remillard, but the provincial budget misses an opportunity to launch a holistic review of the tax ecosystem. (John Woods/Canadian Press)
What is there in black and white is a troubling cut to a department and its partner organizations that support our economy's evolution.

It's not certain where the $16 million savings from Growth, Enterprise and Trade (budget to budget) will come from, but supported organizations such as World Trade Centre Winnipeg are the ones who add fuel to our province's engine. We, and the organizations who count on these partners, wait to hear their fate.

We'll have to wait on a tax review also, it seems. Finance Minister Cameron Friesen is absolutely correct to take on our confusing, inefficient patchwork tax credit system.

But Budget 2017 misses an opportunity to launch a holistic review of our entire tax ecosystem. A thorough study of where our taxes and credits overlap hasn't been done since 1999 and would give valuable information on future fiscal policy.

On social media following the budget lock-up, we called Budget 2017 uninspiring given its "wait and see" tone.

We're waiting to see how the government will innovate around public service delivery. We're waiting for a strategy that will spur the economy beyond its usual stroll. We're waiting for a deficit reduction plan that sees possible interest rate hikes, expected trade turbulence with America and health-care cost pressures for what they are: urgent incentives for action.

At $1 billion a year, can Manitobans truly afford to wait around?​​

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Loren Remillard is president and CEO of the Winnipeg Chamber of Commerce. He was instrumental in developing and launching Manitoba BOLD and BOLD Winnipeg, grassroots public policy campaigns mobilizing the community behind a vision of our province and city. His leadership and advocacy are informed by a decade of insight as a public servant with the Government of Canada.