There’s something most ex-Winnipeggers who now live in Toronto like to say to their friends back home: “There are three thing less expensive in the T-Dot than in the Peg: Sushi, gas and cigarettes.” Unfortunately for Manitoba smokers (and fortunately for everyone else) lighting up has just become even more expensive in the Prairie city.
That’s because the Manitoba government, which announced its budget yesterday, is hiking cigarette taxes yet again, by a penny per stick, to make sure the province can stay in the black. OK, the cigarette tax isn’t the most significant part of the story I just wanted my friends in my former hometown to chuckle when they read that lede what is important though is that Gary Doer‘s government is projecting a $48 million surplusin 2009-2010, due in part to that increase in cigarette prices. Not bad considering how many times we’ve heard the word “deficit” from other premiers and politicians over the last few months.
However, just because Manitoba is making money doesn’t meant it’s resting on its laurels. Doer announced that the government will reduce its debt payments to $20 million this year, as opposed to $110 million in 2008.
The NDPers are also taking $110 million from the province’s rainy-day fund to make sure money for health care and education services stays topped up. (That’s in addition to the $98 million they’ve already taken from the $818 million fund.)
Like other provinces, Doer is increasing infrastructure spending to $1.6 billion a $625 million increase over 2008 to keep the economy moving and jobs flowing.
Overall, it’s a relatively safe budget, but one Manitoba should be proud of. It should be noted that while it’s important the province is drawing from its emergency fund and has upped capital investments, it really isn’t feeling the effects of the economic downturn. Unemployment in February was 4.8% (the national average is 7.7%), most houses are selling above asking price and retail sales only dropped a half a percent, compared to 5% across the country. A big reason for the province’s success is that they don’t have a stake in oil and gas or manufacturing industries like Alberta and Ontario, respectively.
Of course, Manitoba doesn’t grow as quickly during boom times for that same reason (to put it in investing terms, think of the province as a balanced mutual fund, whereas Alberta would be an aggressive equity portfolio), but right now, when beleagured Ontario is about to release its fiscal plans for the years ahead, an even keel economic climate and a safe budget is exactly what Canadians in other jurisdicitons wish they could have too.