Manitoba’s NDP government posted a $580-million deficit in the last fiscal year – $120-million more than it initially predicted – according to the final numbers for 2012-13 released Monday.
Despite the extra red ink, Finance Minister Stan Struthers said he can still eliminate the deficit by 2016-17, a deadline that has already been pushed back once.
“We believe that we’re on track to come back into balance,” Struthers said.
“Every year, we work to reduce the deficit … understanding that the key to this is to have our economy growing and continuing to invest in flood protection and schools and hospitals and roads and bridges.”
The Opposition Progressive Conservatives said the numbers show the government has been unable to wrestle the deficit down despite having new money from tax hikes and user-fee increases.
“The NDP levied on Manitoba families and business the largest tax hike in 25 years in 2012, but got no closer to balancing the books of the province,” the Tories said in a release.
The public accounts report released Monday shows the government took in slightly less money from taxes and fees than expected, and slightly more than expected from federal transfer payments.
Overall spending was about 2 per cent higher than budgeted. Struthers said there were a number of key programs that required more money.
“Public safety, disability programs, child protection. We had some expenses in terms of agricultural income support. Those are the kinds of cost-drivers that we’ve been pointing to all along.”
The deficit came in a year when the government expanded the provincial sales tax to cover many kinds of insurance and personal services such as tattoos and manicures.
The tobacco tax was increased, and the tax on gasoline jumped by 2.5 cents per litre.
By last fall, the government admitted the deficit was going to be much larger than anticipated. It pushed back its election campaign promise to balance the budget by 2015 to 2017.
Taxes were hiked again this year. The government raised the provincial sales tax to 8 per cent from 7 per cent, an idea Premier Greg Selinger had dismissed as “nonsense” during the 2011 election campaign. The NDP also rewrote the province’s balanced budget law to dodge a referendum on the issue.
Recent opinion polls suggest the government’s popularity has dropped sharply in the wake of the tax hike.
The NDP has responded to opposition attacks by saying the Tories would gut front-line services and hurt the economy.
“That’s their agenda,” Struthers said.
Struthers also released financial results for the first-quarter of the current fiscal year. They show the government took in more money than expected from the provincial sales tax, which increased on July 1.
When asked whether the numbers suggest consumers rushed to beat the tax hike, Struthers said the figures are “a vote of confidence” in the strength of the Manitoba economy.
“I think Manitoba families understand that there are things that they need to spend on. They’ve got jobs, they’ve got confidence that they have a government that’s going to invest in health and education.”
Manitoba’s net debt has now reached $15.9-billion, up from $11.4-billion four years ago.