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Can Wab Kinew mark a new dawn for Manitoba under self-imposed constraints?

Fiscal commitments could constrain the NDP’s ability to implement a bold economic agenda, but there are still areas for progress

Canadian PoliticsEnvironmentHousingIndigenous PoliticsLabour

Manitoba premier-elect Wab Kinew with his family on election night, October 3, 2023. Photo by Wab Kinew/X.

The Manitoba election results on October 3, 2023 were historic and of fundamental importance for Manitoba. By electing Manitoba’s first ever First Nations premier, Manitobans rejected the Progressive Conservatives’ austerity and thinly-veiled appeals to bigotry. Instead prevailed the “One Manitoba” vision put forward by the NDP leader Wab Kinew, aimed at ratcheting down US-style culture war politics being embraced by Canadian Conservatives and refueling the rise of far-right, white supremacist and anti-LGBTQ2S* hate. This victory is to be celebrated, particularly given Winnipeg being declared Canada’s most racist city only eight years ago by Macleans. The NDP victory also denied the PC’s $1.2 billion in new tax cuts announced during the election, on top of the already $1.6 billion in revenues lost to tax cuts since 2016, that would have necessitated another round of deep spending cuts, given the PC commitment to balance the budget by 2025.

The NDP road to victory was almost exclusively built on health care commitments, aggravating the weak flank of the PCs, whose slashing of health care and ignorance of medical professionals left the system wounded and bleeding staff, just as it was entering the COVID-19 crisis. The results were predictable, with Manitoba’s relative performance on health care worsening over a number of indicators, including spending per capita, staffing levels, vacancy rates, and surgery wait times.

Although health care promises made up the vast majority of NDP announcements during the campaign, the commitments made on the fiscal policy front are arguably more fundamental going forward, given the massive impact they will have both on the provincial treasury and on provincial capacity to reverse the damage of seven years of austerity. These commitments will severely constrain the NDP’s ability to implement a progressive economic and social policy agenda in Manitoba.

The NDP’s fiscal policy framework released during the election included commitments to keep effectively all the PC tax cuts, balance the budget in the first term, not raise the PST, and temporarily suspend the gas tax. The framework also noted that and their approach “means no tax increases” and explicitly linked back to the fiscal policy of former NDP Premier Gary Doer, who tabled 10 consecutive balanced budgets, while cutting income, property and corporate taxes, making Manitoba the only province to eliminate the small business tax. The prominent affiliation with Doer throughout the campaign only cemented the message that Premier Kinew envisions himself an economic conservative, and opposes more left approaches, such as the former NDP Premier Greg Selinger’s aggressive fiscal stimulus and investment in public infrastructure, housing and social services.

In an ideal world, the NDP never would have made such commitments. Given the rising cost of living, it was likely politically necessary to ensure that working and middle class households did not see their net taxes (taxes less cash transfers from government) increase, but this could have been accomplished though targeted benefits as opposed to tax cuts that provide the largest benefits to high-income and the wealthy households. Additionally, after years of austerity and declining service quality, there was a surprisingly high public willingness to forgo tax cuts and invest instead in public services. The massive tax cuts proposed in Budget 2023 had not yet taken effect, and could have easily been paused until a full evaluation of the fiscal situation was completed after the election.

Now that such commitments have been made, and given the history of the Selinger NDP collapsing under a perceived broken promise to not raise taxes, the NDP likely has little room to maneuver on this front. Reneging on the balanced budget commitment is more feasible, but would require work now to establish with the public the case that the Manitoba’s fiscal capacity has been massively eroded, with its own-source revenues (total revenues minus federal transfers) falling from 25.3 percent of GDP in 2007-08 to a modern historic low of 15.9 percent in 2023-24.

Taking as a given the self-imposed fiscal constraints the NDP has handcuffed itself with, what options are left for a progressive economic policy path for Manitoba going forward? With little opportunity to increase operating spending beyond the long overdue wage increases for public sector workers and health investments already promised, capital spending along with legislative and regulatory change would need to play a central role. Below are some policy areas for considering the application of these tools.

Green infrastructure, climate change mitigation and industrial policy

The PCs consistently underspent their infrastructure budget while neglecting the need to invest seriously in the transition away from fossil fuels in Manitoba. The NDP should pursue an ambitious strategy to electrify transit, build up active transportation networks, facilitate public electric vehicle charging capacity, with an equity focus on ensuring working class households benefit, while building up systemic protections against a warming planet and the increased frequency of flooding and drought. More generally the NDP should reject past Premier Pallister’s distain of industrial policy and reinvigorate the province’s capacity to promote economic development aimed at greening the economy and creating good jobs for Manitobans.

Expanded Crowns

Manitoba Hydro was stymied during the seven years of PC rule. Ravaged by austerity, like the rest of the public sector, the corporation was subject to massive staffing cuts and forced privatization, leading to a skeleton crew workforce facing brutalized morale, while federal funding was left on the table. A 180 degree change in vision for Hydro is required, one focused on expanding energy supply, including though green alternatives to hydro, in partnership with First Nations, Inuit and Métis communities, and building the infrastructure improvements required for a just transition away from fossil fuels. This development should once again be based on project-labour agreements that promote the use of unionized labour and ensures that training and employment opportunities are made available to Manitobans.

The expansion of social housing is another area the PCs left to stagnate, despite federal dollars for renewal and growth. Housing construction has one of the highest economic multipliers for jobs and economic growth, and the homelessness and affordability crises merit a large expansion of public housing and support for non-profit and cooperative models though joint ownership, loan guarantees, and access to land. Manitoba also has a track record of using non-profit social purpose enterprises to help ensure marginalized workers are provided with supportive employment opportunities in this work, which can be scaled up and built upon.

Energy efficiency retrofits and access to telecommunications, in particular remote high speed internet access, are areas with potential for Crown corporations to insert themselves. More generally, there should be greater use of the entrepreneurial and financing capacity of the public sector to meet social needs, drawing upon the potential of public banking models and related ideas to facilitate the growth of public and non-profit enterprise and investment while addressing the cost of living challenges facing Manitobans.

Labour market reforms and enforcement

There are many venues for legislative initiatives to help stabilize the power imbalance of private capital over labour. Implementing anti-scab legislation and automatic certification, long called for by Manitoba’s labour movement, should be of top priority, particularly given recent federal gains in this area. Further work should be done to investigate ways to make it easier for workers to organize, particularly in low-wage precarious service occupations.

Although it did not make it in the NDP platform, Kinew had previously stated that the minimum wage should be a living wage, with the most recent living wage estimates for Manitoba showing a gap of several dollars per hour. Legislative change to include gig workers under employment standards and opportunities for sectoral bargaining and industry-specific minimum wages (above the general minimum wage) paired with an expansion of apprenticeship and certified occupations should also be pursued. Finally, reinvigorating employment standards and workplace health and safety enforcement and reversing the deteriorating capacity to undertake this work should be expedited.

Newcomer integration

The treatment of Ukrainian newcomers in Manitoba after Russia’s invasion also demonstrated that significant improvements are possible with respect to providing newcomers with timely access to health care, child care, housing and other supports. Many of these improvements have as much to do with policy change as new funding. Manitoba should also end its race-based preferential treatment of Ukrainian newcomers by raising the level of supports for all new immigrants to the level provided to Ukrainian displaced persons. Other opportunities for dismantling systemic discrimination, particularly in the area of credential recognition, should be pursued, without weakening occupational standards.

Support for solidarity economy enterprises

Supporting non-capitalist business models, including non-profit, worker-owned and cooperative enterprises is another area that can be supported through policy change and loan guarantees. Existing tools and business development supports at the provincial level can be better utilized to support collective ownership and alternative production models.

The fiscally conservative commitments of the NDP place serious constraints on the ability of the new government to pursue a progressive economic agenda to benefit working and middle class Manitobans, but there are still many areas where progress can be made. Those seeking an economic and industrial policy agenda that will reduce inequality, empower workers, and support a just transition in Manitoba can look to capital spending, legislative reform, and opportunities in the Crown corporation sector as areas where progress is possible, even if the narrow fiscal policy battle may have been temporarily lost.

Jesse Hajer is an Assistant Professor in Economics and Labour Studies at the University of Manitoba and principal investigator for the Public Service in Tough Times: Working Under Austerity in Manitoba research project.

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