The Reminder is making its archives back to 2003 available on our website. Please note that, due to technical limitations, archive articles are presented without the usual formatting.
A Sept. 7 Winnipeg Free Press noted that Manitoba's debt is a non-issue with voters. Maybe Manitobans get their information from more reliable sources than the Canadian Taxpayers Federation, which simply throws out numbers without putting them in context. CTF's latest initiative is a debt clock that calculates, by the second, the interest accruing on the provincial debt. Taken on its own the number tells us very little, but the CTF tries to present it in such as way as to catapult debt into an election issue. More thoughtful analyses are found at any number of sources, such as BMO economist Sherry Cooper, who says Manitoba's "budget plan is on track...for a surplus in four years" and our "deficit is modest." She is not alone. Objective economists understand Manitoba's debt situation. They know our debt is $14 billion and they understand it is not a problem. They understand our debt, relative to GDP, is amongst the lowest in the industrial world, and considerably lower than Canada's as a whole. They understand the infrastructure, health care services, education, and provincial parks we all enjoy are the result of past spending and that the most recent round of deficit spending prevented Manitoba from entering into a recession (one of the few Canadian provinces to do so). Another source worth checking out is Fletcher Baragar's soon-to-be released Report on the Manitoba Economy 2011. Baragar is an economist with the University of Manitoba and his report provides a comprehensive look at Manitoba's economy from 2008 until the present. In context Baragar rightly places recent deficit spending in the context of the recession. He explains how the recession impacted our net exports, business spending, consumption and government spending Ñ the four pillars of economic activity. According to Baragar, the change in the global economy changed attitudes. The notion that government should play an active role in stabilizing the economy "garnered wider acceptance." This change in attitude was the acknowledgment by governments around the world that the government-spending portion of GDP would have to make up for loss of spending in the other three areas. Although consumer spending remained somewhat strong in Manitoba's economy, our unemployment rate went up much less than other provinces, and remained easily one of the lowest in the country (today it is the lowest). Nonetheless, as Baragar explains, our economic rate of growth between 2007 and 2009 decreased almost two per cent. Such contraction, caused by lack of demand, can only be offset with government spending and luckily for Manitoba, it worked. Had the government not invested in relief efforts and infrastructure projects that will benefit us for decades to come, Manitoba would have slipped into recession, government revenues would have dropped even more and the deficit would have been even greater. This is an edited version of an editorial by Lynne Fernandez, Canadian Centre for Policy Alternatives.
