Manitoba’s PST increase is for?

Blog, Commentary, Manitoba, Public Sector, Role of Government, Steve Lafleur

“Bad news all at once; good news over time.” That was the advice Niccolo Machivalli had for the eponymous Prince in his most famous work. This maxim has clearly not been lost on Manitoba’s provincial government. Their recent decision to circumvent the requirement for a referendum on a PST increase sounds like a hackneyed attempt at Machiavellian political manipulation.

Premier Sellinger argued that the surprise PST increase was for “critical infrastructure” and “growing the provincial economy.” Such vague statements gave the premier the ability to define nearly any spending as proceeds of the tax increase. Sympathetic pundits initially pointed out that the province will face significant flood related costs (which were foreseen well in advance). But while that initial deflection fell flat, the government will continue to claim that every ribbon it cuts over the next two years was paid for by the PST increase. These vague commitment allow for the “good news” to trickle out very slowly, which will give the Premier plenty of positive news coverage until the next election.

Consider the recent announcement that the government will spend $15 million to shrink class sizes. The Premier went out of his way to claim that this was made possible by the tax increase. “It (PST increase) allows us to go forward with this, for us to help build strong communities which will generate greater economic growth and a more prosperous Manitoba.”

The Premier obviously hopes that the blowback from the PST increase will abate, and that he’ll be able to distribute just enough electoral treats to key voting blocks to win himself another term. This may sound cynical, but this is how politicians tend to operate. That’s why we need to look at the big picture, rather than getting distracted by the scraps that politicians try to buy our votes with.

Manitoba faces immense fiscal challenges that the government seems unwilling to address. Smaller class sizes in the short term may seem nice, but without prudent long term fiscal planning, the government will eventually have to cut back on education spending. Punting tough decisions down the road is good politics, but really bad public policy.