Manitoba government still eyeing changes to law that bans deficits

A review of a balanced budget law that has been a thorn in the Manitoba NDP government's side is still ongoing six months after it was announced.

Consultations with the public, as well as meetings with businesses, students and other groups, are well underway but there is no word yet on when a decision will be made, Finance Minister Greg Dewar said Tuesday.

• PremierSelinger looks at changing law requiring balanced budgets

"We're still weighing our options and we're still meeting with people," Dewar said.

"The vast majority of individuals, when the question is put to them, want to see us to continue to grow the economy, to return to balance in a responsible way which we're doing but by making investments to grow our economy."

The Balanced Budget, Fiscal Management and Taxpayer Accountability Act was introduced by the former Progressive Conservative government.

It forbids deficits except in cases of natural disasters or war and, as a penalty, cuts cabinet ministers' salaries any time the government is in the red. It also requires a referendum before the provincial sales tax, income tax or the business payroll tax can be raised.

The NDP government has repeatedly amended or suspended sections of the law since the province began running a string of deficits in 2009. Each time, the government has taken a political hit as the opposition accused it of being unable to follow fiscal guidelines.

First, the government cut in half the salary reduction for cabinet ministers. It later added loopholes to allow for deficits in the event of sharp cuts in federal transfer payments or provincial Crown corporation profits.

And, in the most controversial of changes, it suspended a requirement for a referendum on major tax increases so that it could raise the provincial sales tax in 2013 without a public vote.

Dewar offered few clues as to what changes lie ahead, other than a looming need to formally push back the target date for returning to balance. The government announced last spring it would miss its legislated target of ending deficits by 2017, and would instead aim for balance by 2019. It also said it would only count direct government operations not Crown corporations in its calculations.

Dewar's consultations are lumped in with public hearings on the 2016 budget, but he has not determined whether the changes will be announced at the same time as the budget is delivered.

"I had six meetings last Friday and there's more scheduled in the weeks ahead. We're going to wait until we're finished our process and then we'll make our decision."

The balanced budget law is expected to be a key issue in the provincial election campaign set for next April. The Opposition Progressive Conservatives have promised, if elected, to restore the provisions that have been altered by the NDP.