The Canadian Press

Manitoba’s NDP government is looking at four more years of deficits, even with higher user fees, cancelled tax cuts, and a pay cut for cabinet ministers that were announced in Tuesday’s budget.

The government delivered a $10.7-billion spending plan that will affect almost every person in the province, and create $1.4 billion in red ink between now and 2014.

With the economy struggling, the government is choosing to run deficits instead of cutting spending on key programs, Finance Minister Rosann Wowchuk said.

“We decided that we did not want to make short-term decisions that would jeopardize vital front-line services and leave us at a disadvantage when … the economy turns around,” Wowchuk told reporters.

“When I was out talking to people, they said, ‘don’t cut our services, run a deficit if you have to.”’

While revenues are projected to grow by less than one per cent this year, the government is boosting spending by five per cent, with schools and hospitals getting the lion’s share of the new cash.

The ongoing deficit means cabinet ministers must take a $9,200 salary cut. The move is required under a law which requires a budget to be balanced over four years. The law will be changed to allow the deficits to continue, Wowchuk said, the second time in three years that the balanced budget law will be loosened.

On the revenue side, smokers will pay 50 cents more for a pack of cigarettes. Campers will pay more for spending a night in a provincial park. People getting divorced will pay higher court fees. University students will pay five per cent more in tuition.

Housing developers and home buyers will face higher fees for registering their properties. And people who use tanning salons will now have to pay the provincial sales tax.

The government is also cancelling a handful of small but long-promised cuts to personal and business income taxes, and is postponing a planned $50 increase in the tax credit for residential property owners.

The bad-news budget is a sharp turnaround for the NDP, which has enjoyed strong growth in federal transfer payments and a slow-but-steady economy since taking office in 1999. Federal transfers are flat this year, and the economy is forecast to grow only slightly.

The red ink was quickly criticized by opposition parties.

“It’s a sinkhole of debt with no plan to get out of it,” said Opposition Progressive Conservative Leader Hugh McFadyen. “We will pay the price for this debt and for these deficits for many years to come.”

The government will also drain all but $200 million from its $804 million rainy day fund by 2014, and is asking all legislature members and senior civil servants to accept a two-year wage freeze. Government negotiators are seeking the same freeze in current contract talks with nurses and other public-sector workers — something that may be a challenge.

“There may have to be some adjustments made to their budget along the way,” said Peter Olfert, president of the Manitoba Government and General Employees Union.

“We’ll be negotiating, as always, for improvements in some areas.”