By Steve Lambert, The Canadian Press
WINNIPEG – Manitoba’s Progressive Conservative government introduced a revamped balanced-budget bill Monday that would give it more flexibility to run deficits for years to come without risking a pay cut.
After winning last year’s election, the Tories scrapped an earlier balanced-budget law that banned annual deficits. As an enforcement measure, the law cut the salaries of cabinet ministers by thousands of dollars any time the government was in the red.
Under the proposed new law, the government would only have to run slightly lower deficits every year to escape any pay cuts. The bill contains no timeline for balancing the budget.
“You must go lower every year … if you go backwards, if you regress, there will be the penalty in place,” Finance Minister Cameron Friesen said Monday.
“I think part of this is recognizing that we were left with an enormous challenge as Manitobans — an almost $900-million deficit (under the former NDP government).”
The Opposition New Democrats accused the Tories of protecting their own pockets after announcing a series of spending cuts in recent weeks that include health-care capital projects.
“They don’t seem to be willing to accept a cut to their own salaries which, to me, shows a lack of leadership,” said NDP MLA Wab Kinew.
The bill also loosens the way a deficit would be calculated for the purposes of the pay cut.
Losses at Manitoba Hydro, a Crown corporation struggling with mounting debt, would not be counted. As well, the government could take money from its so-called rainy-day fund and have it counted as revenue.
There is one provision the Tories are maintaining in the new bill — a referendum before any increase to the province’s sales, income or business payroll taxes. The NDP temporarily suspended that provision in 2013 and raised the sales tax to eight per cent from seven, stirring up voter anger that led to their electoral defeat.
The Tories took the matter to court to try to overturn the tax increase, but a Court of Queen’s Bench judge ruled governments have the right to alter provincial laws, barring some constitutional violation.
The new bill also makes it clear the referendum would not be binding on the government. But Friesen said the public vote would still carry a lot of political weight.
“It would be detrimental to a government to accept a very strong mandate from the people in the form of a referendum and then act differently,” he said.
“Obviously that government would have to be prepared to pay the price.”