Taxes, Bureaucrats Should Top Liberal Concerns: Party has chance to change policy landscape

Joseph Quesnel, Local Government, Saskatchewan, Taxation

The Manitoba Liberals may be poised to make gains in the next provincial election. It is time they became creative in the policy department.

The Liberals will be choosing a new leader in their upcoming fall convention. Some pundits are seeing potential in Rana Bokhari, a 35-year-old lawyer who announced her candidacy last month.

The party has not done well over the last several years, but new data shows there may be potential for some growth. The NDP has apparently been damaged by their decision to raise the provincial sales tax. Traditionally, Liberal growth is bad news for the NDP.

The Manitoba Liberals could perhaps make some gains if it came out for some bold policy proposals.

Steve Lafleur, a policy analyst with the Frontier Centre for Public Policy, has said the new party could stake some ground by coming out for a harmonized sales tax.

If the Liberals can communicate the idea correctly to Manitoba voters, it is a proposal that could find support from the Manitoba population. In British Columbia, the idea was not as communicated as well as it could have been. The harmonized sales tax, business leaders said, was an efficient consumption tax that eliminated loopholes. The tax also removed tax duplication throughout the value chain. It was no surprise that the business community in that province was solidly behind a harmonized sales tax.

The two large problems with Manitoba's tax system as it stands is that businesses have to administer two systems with different tax bases — provincial and federal — which creates unnecessary paperwork and a time burden. Also, the GST rebates business inputs and investments. The system supported by the Manitoba NDP does not rebate taxes on business inputs.

The other major policy proposal is finally dealing with Manitoba's bloated public service.

A study by the Frontier Centre for Public Policy found that public sector employment levels in Manitoba are significantly higher than the Canadian average. The Frontier Centre study was based on analysis of Statistics Canada data. In 2010, across Canada, there were 84 public sector employees at combined provincial and local levels for every 1,000 residents.

In Manitoba, there were 103 employees for every 1,000 residents. This meant there were approximately 23,400 more provincial and local employees in Manitoba than there would have been had the province remained at the national average.

The authors also determined that if public sector numbers were similar to the national average, spending on provincial and local government wages would have been $1.22 billion less in 2010.

This high level of public sector expenditure is a heavy burden on the Manitoba taxpayer. But, a reduction in total public sector employment of just 5% over 10 years could trim about 6,000 jobs.

The government through attrition could smartly achieve this modest reduction. There is no need for drastic cuts.

Whatever policies they adopt, the changes must move Manitoba away from its status as a high spending, "have-not" province.

The Liberal Party has the potential to change the policy landscape in Manitoba for the better. Come this fall, let's hope they grab at the opportunity with both hands.