- Tax controversy, voter fatigue weigh on incumbent government
- Conservatives win majority, according to CBC early projection
Voters in the central Canadian province of Manitoba handed the ruling New Democratic Party their walking papers after 17 years in office, in part because of lingering frustration over a tax increase.
The Progressive Conservative Party, led by Brian Pallister, was on track to win a majority of the 57 seats in the provincial legislature, according to projections by the Canadian Broadcasting Corp. NDP Premier Greg Selinger had been sliding in public opinion polls since his government’s decision to raise the provincial sales tax in 2013.
The tax increase -- to 8 percent from 7 percent -- prompted a court challenge and five high-profile cabinet ministers called on Premier Greg Selinger to resign. The New Democrats have been in power since 1999. The incumbent premier took the reins in 2009 after serving as finance minister under Gary Doer, the former premier who went on to become Canada’s ambassador to the U.S.
Pallister’s party has pledged to roll back the provincial sales tax to 7 percent.
“The PST represents a problem people see with the NDP,” said Christopher Adams, a political scientist with the University of Manitoba in Winnipeg. “It precipitated the gang of five marching out of the premier’s cabinet and continued to be on the opposition’s list of things to talk about.”
Manitoba -- Canada’s fifth most-populous province, with 1.3 million people -- is expected to be among the country’s strongest performers in 2016. Its economy is projected to grow by 2 percent this year, according to a survey of economists by Bloomberg News, trailing only Ontario and British Columbia.
The provincial deficit, however, is rising. Manitoba expects to post a shortfall of C$773 million ($672 million) in the fiscal year that ended March 31, up from the C$422 million forecast in its 2015 budget. Deteriorating tax revenues and increased pressure on front-line services are to blame, the government said in a fiscal update last month.
Manufacturing is the largest industrial sector in Manitoba and since a majority of goods are exported, sales were limited in 2015 due to the global economic slowdown, falling prices and currency fluctuations, the government said.
Moody’s downgraded the province’s outlook to negative in August 2014 due to the “risk surrounding Manitoba’s plan to achieve a balanced budget by fiscal year 2016-17,” the ratings agency said in a statement at the time.
“Compared to previous years, I would say the NDP is a little bit tired,” Adams said.