WINNIPEG (Staff) – Manitoba’s Conservative government chose to milk its one-armed cash cow to balance its budget last week.
Finance minister Eric Stefanson said it’s the first time in 20 years the province has balanced the budget. His government planned to introduce a balanced budget in the 1996-97 fiscal year, but he said Manitobans wanted the government to do it earlier.
Stefanson said taxes will not be increased in the budget, which includes a $48-million surplus.
But a type of voluntary tax is largely responsible for the bottom line being in the black. Stefanson used a total of $386 million raised from video lotto terminals, casinos and other lottery activities, including a $145 special lottery fund that has been building for several years. This has many critics of provincially sanctioned gambling seeing red.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
“Manitobans told us the bleeding must stop and they also told us to use lottery revenues to accomplish that very important goal,” Stefanson said.
Budget documents showed that the government would rely on $220 million a year in lottery revenues in years to come.
Stefanson also said his government would introduce legislation this week that would ensure that future budgets stay balanced:
- Income tax, sales taxes and payroll taxes could only be increased if Manitobans agreed through a referendum.
- If a government incurs a deficit, it must be offset the following fiscal year with a surplus.
- Ministers and the premier would be docked 20 percent of their ministerial salaries for incurring a deficit. This penalty would rise to 40 percent in the second year of a deficit.
- These rules would apply barring a decline of more than five percent in revenues, natural disasters, wars or if the public agreed to repeal the law through hearings.
Stefanson said that if his financial plan is followed, the province’s $7-billion debt could be paid off in 30 years. Currently, the province pays $648 million a year to cover the interest on its debt.
The government is expected to call a provincial election this spring, which means the balanced budget legislation may not pass before the legislature is dissolved.
Rais Kahn, a political scientist at the University of Winnipeg said budgets brought down shortly before an election call have traditionally been used to introduce the campaign platform for the party in power.
Kahn said reducing the deficit while maintaining social services are prime concerns in the province, adding that “if the government can bring down a budget that seems to show that (it) is successfully doing all the things that the public expects it to do, its chances of getting re-elected will improve.
“It’s just a political strategy.”
