March 25, 2009
Budget 2009 Keeps Manitoba Deficit Free With 10th Consecutive Balanced Budget
– – –Province's Fiscal Stabilization Account At $634 Million
Manitoba will be deficit-free in 2009-10 as a result of today’s budget, the 10th straight balanced budget and one that leaves $634 million in the fiscal stabilization account (FSA) to help cushion the province against the future impact of global economic uncertainty, Finance Minister Greg Selinger said today.
Budget 2009 marks the first time in 50 years that a government has presented 10 balanced budgets in a row. The FSA is projected at $634 million for 2009-10, more than three times the size of the fund as budgeted in 1999, the result of a decade of prudent fiscal management, Selinger said.
“Manitoba is well-positioned to weather tough economic times, however our budget is not without hard choices. Our decision not to run a deficit like some other governments means that we have had to make some difficult decisions,” Selinger said.
“The result is a balanced budget that is fiscally responsible, prepares for the future by investing in people and building our knowledge economy, addresses the infrastructure gap through various stimulus initiatives, and protects the services Manitobans need most such as health care and education.”
Budget 2009 is balanced with a projected summary budget surplus of $48 million that includes core government departments, Crown corporations pension obligations and a 1.8 per cent growth in summary expenditures. It includes managing within government with one-third of departments holding the line or seeing slight decreases as government does its part to modernize and adapt its operations, while managing civil servant staff vacancies and overhead costs. In order to ensure vital core programs are not disrupted during these exceptional economic times, $110 million will be drawn from the FSA, the minister said.
Selinger said Budget 2009 presents a solid fiscal framework that includes:
· Manitoba compliance with generally accepted accounting principles (GAAP) and implementation of a new law that requires one set of books. The former law allowed for two sets of books.
· A $20-million debt payment. Manitoba is now fully paying the employer’s current service contributions for all civil servants and teachers – the first government to do so since April 1, 1961. The unfunded pension liability had grown to $3 billion in 2000 when government began paying down the liability.
· Reduction of debt-servicing costs by 55 per cent, to six cents today from 13.2 cents on every dollar in 1999. These savings have been reinvested in health care and education and returned to Manitobans in tax cuts.
· Net debt to GDP ratio is down more than 25 per cent since 1999. Given the extent of Manitoba’s economic stimulus investments, it is projected to increase in the coming year but will remain
25 per cent lower than in 1999.
25 per cent lower than in 1999.
Budget 2009 reiterates that Manitoba is committed to continuing to pay down debt while protecting important services and investing in people and the programs that prepare the province for the future. Balanced budget legislation will be amended to provide more flexibility to make a $20-million debt payment this year and use the balance that would have been paid for debt to address infrastructure, stimulate the economy and create jobs.
“Times may be tight but this is not the time to stop investing in our greatest resource – our people,” Selinger said. “Bricks and mortar projects are important stimulus initiatives and today’s budget continues to modernize our province’s infrastructure. However, investing in people and building our knowledge economy are the best actions we can take to steer our province through uncertainty and towards prosperity. This is the path we have chosen.”
The minister stressed while Manitoba is not immune to feeling the effects of global economic uncertainty, the province has many strengths upon which to build – economic diversity and stability, a creative business community, a highly-skilled workforce, increased disposable income, a high quality of life and overall affordability.
“In today’s economic climate, Manitobans are well served by our province’s competitive business and personal income tax environment, flat property taxes, low hydro and auto insurance rates, and housing and business costs that are comparatively stable and affordable. These and other factors will help ensure Manitoba continues to move forward.”
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