Getting back on track
Winnipeg a long way from Greece
Is Manitoba the new Greece?
Conservative commentators and bloggers would say so.
They would say that Manitoba is in the shambles of crushing debt and deep austerity - and harsh crackdowns on labour and social programs while giving massive corporate taxes is the only way back to prosperity.
I may be exaggerating, but only a little bit.
I do not condone the provincial government for running a $1.12 billion deficit in the 2011-2012 fiscal year.
However, I do take issue when right-wing commentators say we are worse off than we actually are and that we should be grabbing our pitchforks and storming the Manitoba Legislature asking for the Premier and finance ministers’ heads on a platter.
Shall we look deeper into these numbers as to why we have this deficit and how we are far from being Greece?
This past year’s flood in regions across southern Manitoba accounts for $491 million of this deficit.
Most of that money was spent on flood protection, and reaction to the flooding and issues at hand - this is an expense you cannot forecast or prepare for, especially a cost of that magnitude.
While many believe our deficits will not shrink, this upcoming year we won’t have to worry about flooding due to the warm winter and lack of precipitation.
When it comes to comparing ourselves to Greece, we are not similar in any way when it comes to finances and economics.
Greece’s debt-to-GDP ratio is 160 per cent and is still growing out of control. Even the new debt swap deal may not even solve their woes.
In Manitoba, with this budget deficit coming into account our debt-to-GDP ratio is just under 23 per cent. Our debt is just under $13 billion, while our GDP is valued at over $56 billion.
The Greek economy is expected to contract by at least five per cent, while most private banks and economists agree Manitoba’s will grow by 2.5 per cent this year and the next respectfully.
Greece’s bond rating is considered “junk status,” while Manitoba’s rate is “AA” or higher by all three major creditors like Standards and Poor’s.
These high credit scores lower our credit costs and make it more affordable to borrow as a province. Thus, we become more of a safe haven for investors wishing to invest money in bonds.
When the markets sneezed in 2008 with the housing crash, Manitoba barely caught the sniffles, while the rest of the world caught a cold.
Conservative commentators are making extremes over a situation that is not dire.
They do not even give credit to this government for running 10 consecutive balanced budgets from 1999 to 2009.
If Manitoba has struggles economically, then why is mining, natural gas, oil, manufacturing and aerospace booming again?
In addition, our real estate sector is stronger then ever.
Centreport is making massive expansions along with roadway projects for Kenaston Boulevard, Chief Peguis Trail and Centreport Way. We are constructing a new rapid transit system and constructing an IKEA store along with a shipping centre.
A testament to our strong economics can be simply put by the Winnipeg Jets’ return to Winnipeg. If our economy had problems, the Winnipeg Jets would not have come back - they would have stayed in Atlanta.
I have full faith that the provincial government will get us back on track by running a surplus by their projected 2015.
Have a little faith in our government.
Andrew Podolecki is a second-year politics student.
Published in Volume 66, Number 24 of The Uniter (March 21, 2012)