Balanced budget legislation for Manitoba: Principles and prospects

In 2009, the Government of Manitoba suspended its balanced budget legislation (BBL) that had been in force since 1995, promising to balance the budget and restore the legislation by 2015-16 in time for the next provincial election. The Government has since indicated that it will need an additional year to balance its books and introduced an increase in the retail sales tax from 7% to 8% beginning 1 July, 2013 for a ten-year period (Government of Manitoba 2013). Bill 20, which suspended the BBL and its taxpayer protection provisions that include a referendum on any tax increases, passed only after a protracted summer and fall sitting of the legislature and was challenged in the courts. While the focus of the challenge was the increase in the retail sales tax rather than the budget balancing and debt repayment provisions of the legislation, a successful verdict would have struck down Bill 20 and ostensibly restored all aspects of the existing BBL, including requirements to balance the budget within a four-year cycle. The state of the provincial books and the future of BBL will undoubtedly continue to be central issues leading up to the next provincial election, as many voters will seek assurance that their incoming government is not committed to deficit financing and debt accumulation.