This report comes to NetNewsledger.com courtesy of the Frontier Policy Centre. There are eight parts to this special feature, they will run Fridays on NNL.
Province in ‘negative feedback loop’
Manitoba’s chronic reliance on transfer payments, its ever-inflating public sector and its increasing concentration of sectoral decision-making power in the hands of a few on Broadway is having an enervating effect on the province, Law Professor Bryan Schwartz argues in The Supplicant Society. It doesn’t have to be that way, Manitoba can change for the better.
Several years ago, the government of Manitoba proposed the provincial slogan “Spirited Energy” to signify the strengths of Manitoba society. There are no doubt many, including friendliness and respect for ethnic diversity. However, compared with other provinces, in many respects, we are doing poorly. Personal incomes are lower,2 and taxes are higher.3 Productivity and ratings as a competitive business environment are lower.4 Crime rates are frightening.5 Overall conditions in many First Nations communities are intolerable. Our healthcare system combines relatively high costs with poor out-comes.6 Our major university continues to rank dead last in its catagory in the leading national quality survey.7 Infrastructure is crumbling. The provincial debt is mounting.8 A major cause of this distressing situation is the lack of balance and diversity in Manitoba’s institutions, and communities, which causes individual freedom, choice and prosperity to suffer. The commercial, non-profit and local government sectors here are overshadowed, and to a large extent controlled, by the provincial government.
- Regional health authorities have increasingly taken control over the delivery of healthcare, rather than just its funding and co-ordination. Non-profit organizations that used to run hospitals and seniors homes have lost most of their influence to centralized government control;
- The universities are hamstrung in their ability to raise money through tuition, and hence find innovative ways to improve quality and support less-advantaged students. By imposing a tuition freeze, the province increased its role as funder, and with that, its role as decision-maker;
- The City of Winnipeg and other municipalities have been thwarted in their attempts to achieve a more secure revenue base that reflects their responsibilities. Heavy-handed provincial interference (some of it partisan in nature) in local decision-making continues.
- Political competition is stifled by extremely low spending limits for political parties, while the government continues to use public funds for self-serving media campaigns;
- Selective subsidies to big business are used to lure and retain investment, rather than creating conditions for a more generally inviting and competitive business sector.
1. The author wishes to thank Kyle Lamothe for his assistance with both research and analysis in the preparation of this series.
2. Statistics Canada, “Median total income, by family type, by province and territory (All census families).” Available online at http://www40.statcan.gc.ca/l01/cst01/famil108a-eng.htm, using 2007 data as it is the most recent available. Note: Manitoba sits ahead of the Atlantic Provinces (Newfoundland, PEI, New Brunswick, Nova Scotia), Quebec and Nunavut. Manitoba is well below the national average (national at $66,550, Manitoba at $62,070).
3. TaxTips.ca, “Average tax rate by province/territory (total taxes payable divided by total employment income) 2010.” Available online at http://www.taxtips.ca/taxrates/taxcomparison/taxcomparison2010.htm. Note: For nearly every tax bracket, the average tax rate is either the highest, second highest or nearly tied for second highest. Quebec is the highest across most brackets, with Manitoba and PEI very close behind. See also Milagros Palacios, Alex Gainer, Charles Lammam and Niels Veldhuis, “Canadian Provincial Investment Climate Report: 2009,” Fraser Institute, December 2009, Table 6: Canadian Provincial Investment Climate Index, 2009 on p. 17. Manitoba is in 10th place for Personal Income Tax compared with all other provinces, in 8th for Corporate Capital Tax and in 5th place for Corporate Income Tax.
4. Ibid. Figure 1 on p. 2. Manitoba ranks 6th overall as a preferable environment for attracting and nurturing investment compared with other provinces. It is behind Ontario, Newfoundland, B.C., Saskatchewan and Alberta.
5. Statistics Canada, “Crimes, by type of violation, and by province and territory.” Available online at http://www40.statcan.gc.ca/l01/cst01/legal50c-eng.htm. Per capita information is staggering. Per 100,000 people, in 2009, Manitoba had 10,517.82 Criminal Code violations compared with the national average of 7,223.80, which is higher than all other provinces except Saskatchewan. Also worth noting is Violent Criminal Code Violations with Manitoba at 2,152.52 and the national average at 1,313.83. Most staggering are homicides: Manitoba at 4.66, national average 1.81. on page 148. Also see CIHI “Health Indicators 2009.” Available online at http://secure.cihi.ca/cihiweb/dispPage.jsp?cw_page=AR_152_E&cw_topic=152 on p. 98 (“Wait Time for Hip Fracture Surgery”), p. 124 (Number of general/family and specialist physicians), and p. 126. See also “Health Indicators 2008.” Available online at http://secure.cihi.ca/cihiweb/dispPage.jsp?cw_page=AR_152_E&cw_topic=152 on pages 48, 50 (“Wait Time for Hip Fracture Surgery”) and “Health Indicators 2007.” Available online at http://secure.cihi.ca/cihiweb/dispPage.jsp?cw_page=AR_152_E&cw_topic=152 on p. 50. See also Ben Eisen and Dr. Arne Bjornberg, “Canada Health Consumer Index 2009,” Frontier Centre for Public Policy: Policy Series No. 78, (December 2009) on p. 19. Manitoba ranks seven out of 10 amongst the provinces on many measures of health care performance.
6. “National Health Expenditure Trends 1975-2009,” Canadian Institute for Health Information (CIHI). Available online at http://secure.cihi.ca/cihiweb/dispPage.jsp?cw_page=PG_1595_E&cw_topic=1595&cw_rel=AR_31_E
7. Maclean’s On Campus rankings of Medical Doctoral Universities. Available online at http://oncampus.macleans.ca/education/2009/11/05/our-19th-annual-rankings/. The University of Manitoba ranks dead last out of 15 schools.
8. Pascal Gauthier, “2010 Manitoba Budget,” TD Economics. Available online at http://www.td.com/economics/budgets/mb10.pdf. (Summary of 2010 budget and a breakdown of provincial debt and debt-to-GDP ratio since 2006-2007.)
9. Province of Manitoba, “Tuition Fee Income Tax Rebate. Available online at http://www.gov.mb.ca/tuitionrebate/index.html.. Long-Term Debt of Hydro expanded to $7.218B in 2008, $6.822B in 2007.
10. See Manitoba Hydro, “Financial Statistics (2009 fiscal year ending March 31, 2009.” Available online at
11. Ted Tkachyk, “West route for Bipole III wrong,” Winnipeg Free Press, June 18, 2010, A17. Available online at http://www.winnipegfreepress.com/opinion/letters_to_the_editor/west-route-for-bipole-iii-wrong-96636839.html. This is a letter to the editor by the Reeve of the RM of Grey who states, “That line will be considerably longer (1,290-1,485 km vs. 885 km); more expensive ($1.1 billion vs. $650 million) and with an estimated power loss of $50 million. In addition, 2,700 towers will be needed, rather than 1,600. This may result in higher possibility of weather-related damages.” This letter is not the best source, but it is a good summary
12. Department of Finance Canada, “Federal Support to Provinces and Territories.” Available online at http://www.fin.gc.ca/fedprov/mtp-eng.asp..
13. Ottawa Citizen, Editorial, “Manitoba’s Equalization Shell Game,” February 11, 2007. Available online at /publication.php/1689