Clark would go on to lose to Brian Mulroney. There is an ironic comparison to be made to Selinger here. In his second term Mulroney became easily the least successful Prime Minister ever - his coalition fractured east and west into the Reform Party and the Bloc Quebecois, the Meech Lake Accord failed, he brought in the 7% GST, there was a deep recession aggravated by tight money from the Bank of Canada, which worried excessively about inflation from the GST, etc., etc. Through it all Mulroney kept the support of his caucus and cabinet. It is clear that Selinger has failed a similar test even though his 'sins' are modest in comparison.
Instead of raising the PST Selinger should have chosen a larger deficit for a longer period. There would have been less political fallout, less internal dissent and the arguments for raising the PST to support infrastructure apply as well to taking on more debt to support infrastructure investment.
Manitoba easily has the fiscal room in terms of its debt obligations. I derived the table below from the Department of Finance's fiscal reference tables. I divided net debt for the ten provinces plus Canada by population estimates from Statistics Canada. The amount of debt owed by each person makes the situation of one jurisdiction comparable to the others. Manitoba has less debt per person than all provinces to its east, but more than the other western provinces who are resource rich.
Net Debt Per Capita
|Newfoundland & Lab.||$17,112.75|
|Prince Edward Island||$14,492.46|
Josh Marshall of Talking Points Memo made an argument following the results of the recent U.S. midterm elections that I think applies to Canada and Manitoba. The whole thing is worth a read but here are the key points:
What is driving the politics of the country to a mammoth degree is that the vast majority of people in the country no longer have a rising standard of living....wage growth has basically flat-lined since the crisis....
Fundamentally, most people don't care particularly how astronomically wealthy people are living their lives. It is a distant reality on many levels. They care a great deal about their own economic circumstances. And if you are not doing any better than you were 5 years ago or a decade ago or - at least in the sense of the hypothetical median wage earner - 40 years ago, that's going to really have your attention and shape a great deal of your worldview and political outlook.
So, let me sign up with those who are saying that it was a mistake not to run more clearly on the President's (and the Democrats') economic record. Unemployment is back down to something like normal levels (under 6%); the deficit has fallen consistently and is now back to pre-crash levels judged as a percentage of GDP (which is the only meaningful way to judge it); the stock market has done incredibly well. Yes, totally.
But here's the thing: As long as most voters are still just treading water in their own economic lives, Republicans can say, "Oh yeah, they say the economy's doing great with all their fancy numbers. But that's not what I see!" To an extent that will just be another Republican paean to innumeracy. But it will resonate because rising employment is not leading to rising wages. And that's the core economic experience of wage earners who make up the overwhelming number of people in the country. In a critical sense, it is true.
Wage stagnation stemming from growing inequality is a phenomenon likely to drive our politics for quite a while. However, there could be some periods of wage growth. Bill McBride of the Calculated Risk blog thinks the U.S. economy is growing well enough that the United States might actually begin to see wage growth in the coming year, although the test will be if it exceeds inflation. If that happens, then with a six or more month lag we might see something similar in Canada. It has the potential to benefit incumbent governments still here in 2016 but it is likely that the Manitoba NDP government has simply been around too long to be re-elected, regardless of who leads it and the economic circumstances that will prevail when the next Manitoba election is held.