by Shauna MacKinnon
On October 4th Manitobans gave Greg Selinger’s NDP a mandate to govern for the next four years. The NDP ran on a Doer-esque steady-as-she-goes platform with the slogan Let’s keep building. Don’t turn back.
Now that he has stepped out of Doer’s shadow with a convincing majority, how will Premier Selinger move Manitoba forward? Will he continue down the cautious path carved out in the Doer years? Or will he take some risks and do things differently?
We hope the latter. Here are some things that we think he should do.
On October 4th Manitobans gave Selinger’s NDP a mandate to govern for the next four years. The NDP ran on a Doer-esque steady-as-she-goes platform with the slogan Let’s keep building. Don’t turn back. Eyes will now be watching to see how the details unfold, giving us a better sense of the kind of legacy Selinger intends to leave. Here are some suggestions.
Health will and should be a priority. Healthcare spending consumes more than 40 percent of the provincial budget. If Manitoba is to become a national leader in health as the NDP proposes, it will need to take more seriously the social determinants of health (SDOH) by making it the central framework from which policy is developed.
The SDOH approach recognizes the many factors that determine health outcomes. A central theme is that keeping Manitobans healthy begins by increasing equality. This approach has long been endorsed by the World Health Organization, and in the internationally acclaimed best seller The Spirit Level: why more equal societies almost always do better, authors Wilkinson and Pickett provide solid evidence that demonstrates why the preventive SDOH approach promotes improved health. The CCPA-Manitoba book titled the Social Determinants of Health in Manitoba shows how this approach can be used to improve health outcomes in Manitoba.
Adequately attending to the SDOH will require a new way of working cooperatively across government departments, between levels of government and with non-government organizations to ensure that all Manitobans have sufficient income, access to safe and affordable housing, health and social services, childcare, education and so on.
The persistent problem of poverty
Research shows unequivocally that on average, people who are poor have worse health and other outcomes. The NDP government has taken some steps over the past twelve years to help those living in poverty, but they must do much more. There continues to be far too many Manitobans living in poverty and this is taking a social and economic toll.
Manitoba has passed anti-poverty legislation that has the potential to make a difference but the government continues to resist setting general targets and timelines for achieving them. They should do so just as they have in other areas such as the elimination of business taxes and increasing the number of doctors and nurses. Research shows that committing to timelines and targets delivers results. Failing to set targets to reduce poverty suggests that it is not a priority.
To begin, the Province must increase social assistance payments for those in greatest need and provide access to a variety of tools to reduce social exclusion and ensure access to jobs that pay well. By and large the NDP government has been content to allow those most marginalized to sustain themselves through the generosity of strangers and charitable giving. This is not an appropriate model for an NDP government that espouses social justice values.
Crime is an issue that is closely related to poverty. The NDP has taken leadership in supporting preventive programs that are making a difference. These efforts must be scaled up.
The Selinger government must provide stronger leadership in collaboration with the federal government and Aboriginal leaders to improve the services required by Aboriginal peoples both on and off reserves. The Aboriginal population in Manitoba is growing, it is on average younger, and Aboriginal people continue to be over represented among those with the lowest incomes and poorest health outcomes.
Comprehensive approaches to infrastructure and economic development
As a crown corporation, Manitoba Hydro is an example of an important public policy tool whose potential has not been fully realized. The NDP government has shown how Manitoba Hydro can be used to meet multiple objectives by integrating targeted training and employment into infrastructure and economic development. Comprehensive approaches can stimulate our economy and address infrastructure needs while also serving to fight poverty and crime when training and employment is targeted toward high-risk populations. This strategy is proving to be effective in northern hydro development projects as well as in projects like Winnipeg’s Building Urban Industries toward Local Development (BUILD) and the Brandon Energy Efficiency Program (BEEP). The province should scale up these kinds of projects and others that make effective use of Manitoba Hydro.
Financial resources are required to address the ever-increasing infrastructure needs in our communities. Cities and towns are demanding that provincial and federal governments provide more funding to address their “infrastructure deficits.” Manitoba already has a relatively generous program of support for municipal activities. However, it is also true that most Manitoba municipalities have serious infrastructure needs. The Association of Manitoba Municipalities (AMM) recommends that the province provide more funding.
This idea would benefit municipalities because provincial funding would allow them to claim the credit for fixing our sewers and roads without having to raise municipal taxes. But the Province would have to find the revenue from somewhere – likely unpopular new taxes – but wouldn’t share in the glory. It’s a political problem that the Selinger government needs to resolve.
Labour rights/employment standards
The NDP government has improved employment standards and labour relations forward, but not enough. These areas too relate back to health. People need to have decent work to stay healthy. They also need to know that they won’t lose income or be fired when they are sick. For example, during the flu pandemic workers in hotels, restaurants, etc. were reluctant to take time off when ill because they would lose pay. Amending employment standards legislation to include a sick-leave scheme and a‘just cause’ clause would protect workers who are ill.
In the Social Determinants of Health in Manitoba, Black and Silver show that it is in our collective interest to have a democratic and robust trade union movement in Manitoba. The Selinger government should amend the Labour Relations Act to make it easier for workers to form unions by allowing automatic certification when unions sign up 50% + 1 of workers in a bargaining unit.
There is no shortage of work needed to move Manitoba forward. Manitobans will be watching closely to see what kind of legacy Greg Selinger will create.
Shauna MacKinnon is the director of CCPA Manitoba
by Sarah Cooper
For most of the ’80s, at least 10 percent of the new housing built in Canada was affordable housing. After 1993, the number dropped to less than one percent. This means that very little housing that is affordable to lower income families is now being built in Canada.
It’s no wonder that over the last two decades, the number of homeless, hidden homeless, and precariously housed people in Canada has skyrocketed.
Bipole III: Where the Rubber Hits the Road
by Lynne Fernandez
Unfortunately, the Bipole III debate has become a hot potato in the current provincial election. However, debates of this nature will become more common as we as a society deal with environmental and First Nations’ issues and concerns. This slide show explains why.
Click Here to read or download the 4-page CCPA Review “Where The Rubber Hits The Road” from our website.
75 eminent scientists from around the world – including David Schindler – support the push to run Bipole III down the West side and conserve the East side. Read their letter here.
by Lynne Fernandez
Here’s an UNEDITED version of my letter appearing in today’s Winnipeg Free Press. I’m responding to Mr. Tishinski’s letter to the editor of September 27th.
Mr. Tishinski rightly notes that a referendum would have to be held successfully before Manitoba Hydro could be privatized. He also rightly notes that the need to put the question to a referendum exists because the Manitoba Hydro Act was changed in 2001 to protect it from privatization.
But Mr. Tishinski fails to explain that the Act was changed in response to the privatization of MTS, seen by many Manitobans as a treacherous sell off of a successful publically-owned corporation without consulting the shareholders: Manitoba tax payers. If the legislation can be changed once to necessitate a referendum, it can be changed again to remove that proviso.
Mr. Tishinski also ignores the various forms that privatization can take. It does not have to be outright, as with MTS. One need only study the case of BC Hydro which has been dramatically altered while the powers that be claim that it is not being privatized.
According to John Calvert, it is not necessary to sell a Crown utility’s assets to relinquish control to the private sector. He explains how BC Hydro’s function was changed from a producer of electricity to a distributor of energy owned by private producers. This split between public distributor and private producer fundamentally and negatively changed BC’s electricity system, and did so without meaningful consultation with BC tax payers.
Those who champion privatization have learnt their lesson: in order to gain access to public assets, stealth and double speak are the weapons of choice.
Why this Manitoba Election Matters So Much
by Errol Black and Jim Silver
Elections matter. Some more than others. The October 4, 2011 provincial election in Manitoba is particularly important. It matters less because of what is going on in Manitoba, where we have had a stable and relatively progressive government since 1999, and more because of what is happening beyond Manitoba.
Federally, a right-wing Conservative majority government was elected in May, 2011. It is possible that provincial elections this fall will give us right-wing governments in almost every province. South of us, the U.S. economy and Europe similarly faces massive economic problems. Inequality has risen dramatically in most of these economies, the result of 30 years of right-wing economic policies that have produced a massive increase in the numbers of the very rich and the very poor, and undermined economic stability for the working majority in the middle.
In the midst of the chaos described above some positive things are happening in Manitoba that are making a difference in peoples’ lives. When taken together, they are having a cumulative impact that distinguishes Manitoba from most other provinces in terms of performance and results. Click here to read more about why Manitoba needs a provincial government that is competent, honest, and that takes steady steps in a progressive direction.
Errol Black is the chair of CCPA Manitoba. Jim Silver is the Director of the UofW Inner City Studies Program.
The Importance of Manitoba Hydro in the Manitoba Economy
by Errol Black
In recent weeks, questions have been raised about Manitoba Hydro’s role in the Manitoba economy.
The Chambers of Commerce, for example, have proposed that Manitoba exploit the potential of Manitoba Hydro to become a “world-leader in the clean energy sector [based] on the development of wind, solar, geo-thermal, hydro…and other clean energy opportunities.”
In fact, the evidence indicates that Manitoba Hydro is already a leader in the clean energy sector. According to the most recent published data (Wikipedia, “Electricity sector in Canada,” August 25, 2011), 98 per cent of the energy produced by Hydro came from clean energy sources, namely, water, 97.7 per cent and wind, 0.9 per cent. In relation to the rest of Canada, Manitoba produced 6.0 per cent of the total energy, 10.0 per cent of the total energy from water, and 11.0 per cent of the energy from wind and tides.
At the same time, Manitoba Hydro has a long-term plan to increase clean energy production while at the same time supporting conservation measures – through its Power Smart program — that promote efficient use of energy in the province.
Questions have also been raised about the use of the surpluses generated by Hydro. Currently, the benefits of surpluses accrue to rate payers in the form of the comparatively low rates on their hydro bills. For example, for residential users of 2,000 kWh per month the bill in Winnipeg is $139.25, the lowest among surveyed cities. In comparison, the monthly rates in Regina and Saskatoon are $231.46, in Calgary, $191.76, and in Edmonton, $188.86.
It has been suggested that we should raise rates so that a dividend could be paid directly to the Manitoba government. The curious thing about these proposals is that they come from the very same people who argue that taxes are too high in Manitoba relative to other provinces. Moreover, the people who propose these ideas never discuss the distributional impact of raising Hydro rates.
Manitoba governments (of every description) have used comparisons of taxes and personal costs (which includes hydro costs) to show that Manitoba citizens in most income groups are better off than their counterparts in most other provinces.
This short blog presents only a few of the benefits Manitoba Hydro, as a Crown Corporation, provides all Manitobans. This sort of evidence-based discussion enables us to rationally consider Hydro’s role in our future.
Errol Black is the chair of CCPA Manitoba
by Clark Brownlee
About 150 people jammed the Winnipeg Free Press News Café and spilled out into the patio to take part in the “So You Think You Can House”, pre-election debate on Monday, September 19. Ron Schuler (PC), Paul Hesse (Lib.), Kerri Irvin-Ross (NDP), and Harold Dyck (Green), settled into the carefully planned program moderated by Terry McLeod, host of CBC’s Information Radio. A panel of policy experts made up of Shauna McKinnon (Canadian Centre for Policy Alternatives-MB), Tom Carter (Carter and Associates), and Peter Squire (Winnipeg Realtors) represented the public with informed questions for each candidate.
The candidates and the panel were given the questions one week in advance. The questions concerned the creation and financing of social housing and affordable rental housing, and government accountability. After each question had been addressed (or not addressed) by the candidates and the panel had asked their questions, the audience voted for the candidate that they thought had the best answer, by hold up coloured cards.
The response of the audience was very positive. Many were party faithful but many were also young people who seemed to be seriously trying to assess the party’s positions on housing.
All candidates agreed that the housing shortage in Manitoba is a serious problem, affecting not only the thousands of households living in core housing need, but also industry and businesses that are hampered because there is not sufficient housing for their employees. This is resulting in jobs going unfilled and overcrowding. The other commonly acknowledged theme was the absence of the federal government as a major funder in solving the housing shortage that affects not just Manitoba, but all of Canada.
The event was co-sponsored by the Right to Housing Coalition, the Planners Network and the Winnipeg Free Press. The News Café won wide praise as a nifty venue for this type of event with full restaurant service throughout the event and a lively vibe. My only concern was that with a few exceptions, the media coverage was not extensive. As the main objective was to raise housing as an election issue, the limited coverage was disappointing. However the competition for media attention that night included a leadership debate, the Jets and a shooting in the downtown. That being said, we can hope that the 150 plus people who attended went home with a clearer idea of the housing issues and the parties would offer to address them.
Clark Brownlee is the coordinator of the Right to Housing Coalition.
For more details, see Marlo Campbell (Uptown Magazine)’s write-up about the event.
Harper’s Crime Bill: Bad for Canada, Bad for Manitoba
by Errol Black
Stephen Harper dropped his omnibus crime bill this week, confident that his majority government will be able to ram it through the House of Commons with little opposition.
Manitoba Conservative party leader Hugh McFadyen welcomed the legislation with much enthusiasm, declaring that: “The Conservative government in Ottawa has brought forward strong new laws that will help provinces crack down on crime.”
In contrast, people who are knowledgeable about Harper’s omnibus crime bill and it implications argue that it is backwards and that it will perpetuate the status quo on a grander scale. As well, it will impose significant costs on the provinces with little impact on crime.
Paula Mallea, who practiced as a criminal lawyer in Brandon, Manitoba for many years and is now a member of the national board of the Canadian Centre for Policy Alternatives, condemns the Harper bill in a letter published in the Brandon Sun (“Speak out against Harper’s crime bill,” September 22, 2011).
In her letter, Mallea says that “the ominbus crime bill will send us back to a 19th century punishment model,” and offers a number of reasons to justify mass citizen opposition to the law, including:
- Informed individuals in other countries have cautioned Canada not to follow mistakes made in the U.S. such as mandatory minimum sentences and the lack of rehabilitative programs;
- The cost of the crime agenda will be huge for lower levels of government. “Provinces will be expected to pay for additional courts, clerks, prisons, Crown attorneys, judges, sheriffs, court reporters and so on. The costs that will be passed on to provinces will run into billions of dollars;
- For the most part, the legislation is intended to put more people into prison with longer sentences. “The legislation does nothing “to prevent crime, help victims or target guns, gangs, drugs and organized crime;”
- Other jurisdictions, most notably the U.S., have tried this approach without success. Many states are now “abolishing mandatory minimum sentences and reducing the proportion of sentences which must be served before release”and;
- This legislation will result in “an increase in misery for all parties, including offenders’ families and communities, and victims (who advocate for improvements in preventive and rehabilitative programs). The picture becomes darker when you consider that up to 80-90 per cent of offenders in some institutions are [addicted to drugs or alcohol], and up to 40 per cent have mental illnesses. A huge proportion [especially in the prairie provinces] are Aboriginal people. Many offenders are homeless, illiterate, victims of sexual abuse, and so on.” One of the biggest costs in both economic and human terms of Harper’s legislation is that tens of thousands of people who need help to become contributing citizens will be denied access to services that would allow them to do this.
In sum, the burden of Mallea’s message is that we should insist that party leaders in Manitoba commit to seeking changes to the omnibus crime bill that will better address the issues of concern to this province, taking as a starting point the proposition that we cannot afford to divert resources from programs we now have to counter crime to an agenda imposed by Ottawa that is contrary to the interests of our citizens.
Errol Black is the Chair of CCPA-MB. Paula Mallea is the author of a book titled, The Fear Factor: Stephen Harper’s Tough on Crime Agenda. Lorimer Publishing will be releasing her book this fall.
As we approach election day in Manitoba, anyone who appreciates democracy would welcome a informed discussion about the important issues. But don’t hold your breath waiting for that to happen in our local print media.
Pete Hudson explains how media concentration allows the Winnipeg Sun to be blatantly biased – to the point where it is a distributor of propaganda rather than news. Hudson notes that even back in 1981, the Kent Commission Report warned Canadians that “in a country that has allowed so many newspapers to be owned by a few conglomerates, freedom of the press means, in itself, only that enormous influence without responsibility is conferred on a handful of people”.
Unfortunately things have only gotten worse since 1981 – to the point where the Sun is trying to influence the pending provincial election with its “frightening abuse of priviledge, realizing the worst predictions of the Kent Commission”.
Get the full story in Pete’s Fast Facts.
Local Implications of Global Media Concentration
by Pete Hudson
In 1981, the Kent Commission Report cautioned Canadians that “in a country that has allowed so many newspapers to be owned by a few conglomerates, freedom of the press means, in itself, only that enormous influence without responsibility is conferred on a handful of people” (Kent 1981: 217).
The concentration of media about which the Commission reported has accelerated, resulting in the emergence of the ‘multi-media conglomerate’. One example is Quebecor Media Inc. (QMI). QMI owns or controls Videotron (a cable TV and internet provider), Sun Media which operates 46 newspapers including 9 major dailies such as the Sun chain, Group TVA (19 broadcasting stations), Sun News TV and an assortment of video, publishing, and film operations.
The concentration of power in fewer and fewer hands is compounded by the links with our political systems where there are some international parallels. In the U.K., James Murdoch, scion of the Murdoch media empire, is a frequent podium companion of Conservative P.M. David Cameron. Andy Coulson, then editor of Murdoch’s News of the World, entered Cameron’s service in 2007, becoming Cameron’s Press Secretary when the Conservatives won the 2009 election. In Canada, Kory Teneyke was an advisor to Preston Manning and Mike Harrris until July 2008 when he became Stephen Harper’s Director of Communications. In July of 2009, he left in order to set up QMI’s Sun News TV station. When he resigned, he was replaced by Luc Lavoie who was a senior aide to former P.M. Brian Mulroney who is currently a Director of QMI.
These questionable relationships become further problematic evidenced by clear abuses of power. For example, in the U.K. Andy Coulson has been charged in a phone hacking scandal; in Canada, Stephen Harper was seen to be supporting his former Press Secretary in Quebecor’s bid to establish Sun TV News while during the process, Teneyke lied about the nature of the category that QMI was seeking from the CRTC. He was also guilty of engineering false signatures in order to discredit a petition opposing the application.
In Manitoba, the Kent Commission’s warning about the danger of media concentration is evident in QMI’s ownership of the Winnipeg Sun. QMI’s Pierre Karl Peladeau, who earns an approximate $4.8m annually, has locked out various staff no fewer than 10 times, unabashedly uses his media empire to rail against the power of unions, and admits to having no interest in balanced reporting, claiming a “small-c conservative” bias.
Fourteen consecutive pre-election issues in the Winnipeg Sun were examined for the frequency of the promotion of the core of the neo-liberal ideology, which promotes smaller government and the meeting of human need exclusively through the private sector. The ideology denigrates public services, represents taxation as inherently evil, exaggerates problems such as public debt (as a reason to cut public services,) and blames unions for distorting the operation of the free market. Expenditures on measures, which “get tough” on crime and the military are exceptions to the ideology’s general dislike of public services and taxation.
In the 14 issues of the Sun examined, there were 9 lengthy pieces devoted to promoting tax cuts and/or exposure of “scandalous” public expenditures. There were twelve pieces criticizing public services and institutions in general, extending to 17 if gratuitous shots at the CBC are included. There were 5 pieces overtly critical of unions, one of which consumed the entire front page with a scurrilous 3-inch headline.
Getting tough on crime commanded the attention of no fewer than 17 articles. There were 39 praising the military, some boosting Sun TV presented as news, some in praise of the Federal Conservatives, and a couple downplaying the environment as a major issue. There were 13 articles highly critical of the Federal NDP. The count also revealed 19 pieces which seem to present an opposing viewpoint, but of these, 13 were letters to the editor, which were all rebutted by the editor. Four other pieces were Jack Layton obituaries, leaving only 2 pieces that can be placed in the opposite ideological camp.
Early Manitoba election coverage has treated the New Democrats as incompetent ideologues, with no attempt at balance. The most outrageous example was a front page dedicated to the depiction of NDP leader Greg Selinger clad in a barrel with a two-inch headline that read “It’s the economy stupid”. None of these front-page attacks referred to a news item, but to opinion pieces. The opposition parties received unquestioned matter-of-fact reporting.
The Sun has also made much of a “bloated” civil service in Manitoba. No attempt has been made to discuss whether or not such “bloaters” were providing some useful service in health, education and a host of other things we value. Moreover, the Sun was inaccurate in claiming that Manitoba was last among the provinces in the “bloater league table.”
The final evidence of bias concerns some of the major sources of opinion. One is the Frontier Centre, the mandate of which is to promote the expansion of the private sector at the expense of the public sector. It enjoys a regular Winnipeg Sun column as well as being frequently cited. Another is the Taxpayer’s Association, which promotes an ideology of tax cutting and small government. During the recent Federal election its spokesperson was promoted to political commentator. He continues to be frequently cited. These people are lobbyists, not journalists.
Given Peladeau’s admission of bias, the content analysis of the Winnipeg Sun, and the ink allocated to lobbyists, the conclusion is that the paper is dedicated to the dissemination of propaganda defined as “(presenting) information primarily to influence an audience” … “Propaganda is often biased, with facts selectively presented… to further a political or other type of agenda.”
It is even more disturbing that this propaganda is widely distributed gratis. In Winnipeg the Sun is made available free of charge at Robin’s Doughnuts franchises, on Winnipeg Transit buses and other locations across the city. The source of this largess is the Peak of the Market, a Manitoba growers co-op established to market the members’ produce. The extent to which the Sun, along with the Peak of the Market’s charity, is successful in “furthering a political agenda”, such as influencing the pending provincial election, is unknown. But the persistent attempt is a frightening abuse of privilege, realizing the worst predictions of the Kent Commission.
Pete Hudson is a Senior Scholar, Faculty of Social Work, U of M and Research Associate, CCPA-Mb
For a PDF of this Fast Facts, click here.
Report on the Manitoba Economy 2011
Economist Fletcher Baragar’s report on our economy explains how well Manitoba has weathered the current economic storm blowing across the globe. Although we’ve done well compared to other parts of Canada, we have to brace for more possible upheaval; the US and Europe have not regained their balance after been hit far harder than Manitoba was.
We do have fiscal tools we can employ to stay afloat: stimulus spending helped us through the first downturn and we have to be prepared to apply that strategy again if need be.
Main message: Reinvigoration of the economy and of democracy go hand in hand.
This Unspun analysis will bring you up to date on everything you need to know about our economy.
Report on the Manitoba Economy 2011
by Fletcher Baragar
Manitoba avoided the worst of the damaging effects from the 2007-2009 financial crisis and economic recession. Economic growth in the province slowed to zero in 2009, but 2010 saw growth rates rebound strongly to 2.5%. Even higher rates are forecast for 2011 and 2012, although new anxiety is churning over the European and US economies which could affect Canada and Manitoba.
Employment levels and labour force participation rates in the province remain high, and the unemployment rate is now the second lowest in the country. However, Manitoba did not emerge from the 2007-2009 period unscathed. At the height of the crisis, collapsing commodity prices hurt primary producers in the mining, agriculture and forestry sectors. But many of these producers had benefitted from high prices in the pre-crisis period, and by 2010 most of these prices were once again on the rise. The damage to manufacturing was later but still severe, as the effects of the crisis on the key export market, the United States, sapped demand for various Manitoba producers. However, the development of alternative markets, in Asia, Latin America and Europe, has acted to reduce the relative dependence on the US for Manitoba exporters. Over 35% of Manitoba’s exports from 2010 were destined for non-US markets, compared to only 21.5% ten years ago. By way of contrast, export markets for Canada as a whole are less diversified, with only 25.3% of exports going to non-US markets. The robust economies of many Asian and Latin American countries stand in sharp contrast to the US’s, and underline the advantages for Manitoba of the broadening of its exports.
The positive role played by discretionary economic policy began with aggressive monetary policy in late 2008, and the expansionary fiscal policy ushered in with the federal budget in January 2009. These measures benefitted all provinces and lessened the severity of the crisis. The Manitoba government also injected additional fiscal stimulus, and properly allowed for substantial fiscal deficits for fiscal 2009-10 and 2010-11. Public spending, including the spending by Manitoba Hydro, maintained high levels of economic activity in the construction industry, directly sustained employment, and channelled stimulus dollars into activities with high local and provincial expenditure and employment multipliers. Furthermore, the improvements to the economic infrastructure that will result from these initiatives will deliver economic benefits after the construction phases wind down.
Although economic forecasts for Manitoba were, as of mid-2011, quite positive, risks and challenges remain. Commodity prices are by nature volatile and, given the structure of international commodity markets, are likely to remain so. The longer term trend is likely to be a rising one, but movements around that trend, both up and down, will put pressure on producers and communities that produce and transport those commodities. Commodity traders can partially protect themselves against price changes through futures markets, and our economy garners some protection through diversification. For individual producers, workers and communities, however, additional supports are warranted, including income support programs, credit availability, and access to public services.
The Bank of Canada has pushed interest rates to historically low levels, and rate increases do not appear imminent. Core inflation remains well within the Bank of Canada’s target band, and the weak growth of the Canadian economy suggests that The Bank of Canada will stay the course.
Manitoba manufacturers, exporters, and numerous service sector producers continue to be squeezed by our dollar’s rapid appreciation. The adverse effects of a relatively weak US dollar for many Manitoba producers could be offset by a strong economic recovery in the US. As of mid- 2011, the strong US recovery has remained elusive, and the challenges have been exacerbated by the political difficulties that country has experienced over its fiscal arrangements.
These factors mentioned above – commodity prices, interest rates, exchange rates, US economic growth – are all important for the Manitoba economy, but they lie beyond Manitoba’s control. Public sector activity, including fiscal policy, is, by way of contrast, an important economic lever controlled by the province. It has served the province well in terms of stabilising the economy since the outbreak of the crisis. When growth rates rebounded, debate on the appropriateness of continued fiscal stimulus resurfaced. Both the federal and provincial governments had initially indicated a protracted, multi-year path to the re-establishment of fiscal surpluses. The federal government suggested in the 2011 election campaign that a return to fiscal surpluses could be accelerated. This would lessen the stimulus provided by the public sector, and places greater ex ante reliance on the private sector covering any shortfall. Manitoba needs to be concerned about where the fiscal retrenchment will occur especially given that economic growth is now faltering globally. Looking ahead, concerns will surface over federal transfer payments, the terms of which will be negotiated between Ottawa and the provinces after 2014. In light of the federal leaning towards less spending, continued stimulus at the provincial level over the medium term would be prudent. This stimulus can be adjusted downwards if a number of the above mentioned exogenous factors move improve, and/or if the private sector in the province initiates a sustained surge in investment. Too rapid a return to a position of fiscal surpluses risks the loss of some of the economic momentum we’re presently enjoying.
Despite some very significant improvements, poverty still is far too prevalent, with high concentrations found in Winnipeg’s inner city and in a number of remote communities. The task of achieving economic gains without ecological pains remains immense. There is also the challenge of fashioning the economy so that it supports and embodies fundamental human and political ideals, such as broadening participation and economic decision making by the people and communities directly affected. Here too there have been some notable successes, such as the recent agreements between Manitoba Hydro and selected First Nations Communities, but the scope for further progress is as vast as the economy itself. It has been shown that progress of this kind need not be dependent on preconditions such as an economy that has fully recovered from a slowdown or a crisis. Reinvigoration of the economy and a reinvigoration of the democratic process go hand in hand.
Fletcher Baragar is an economist at the University of Manitoba and a CCPA Mb. research associate.