Summary
Many of Manitoba's public policy follies and the associated relative long-term decline of our province are rooted in Canada's well-meaning but perversely dysfunctional transfer payment system. Federal health and social transfers come with strings attached that discourage reform and innovation of provincial health systems. The no-strings-attached 51-year-old equalization program has been more damaging because it effectively pays our politicians handsomely for avoiding innovative public policy.
Equalization also isolates politicians from the political fallout of poor spending choices. Most politicians find that their voters are concerned with the value they get from their taxes, but this is less so in Manitoba. When close to 40 per cent of government revenue comes from other provinces, the accountability link is weak. Manitoba spends more on services than the main "have" province Ontario which picks up the tab, but it does not get better results. The extra money goes instead to enlarge and enrich the public sector. The attached chart reveals how badly tilted the transfer system has become against Ontario. Comparing Manitoba and Ontario expenditure and service levels, we can see that Manitoba's per capita revenues are 20 per cent higher. It has 35 per cent more hospital beds, 35 per cent more nurses and 65 per cent more judges per capita. It has 44 per cent more government employees per capita compared to Ontario. Have-not Manitoba enjoys 12 per cent higher total revenue per capita than so-called Have Ontario.See the full content of this document
Extract
The Transfers Trap
Strategies to wean Manitoba of its dependence on other people's money
Peter HolleWednesday could be a historic budget day for Manitoba. With federal transfers heading perilously towards 40 per cent of total provincial revenues, it's likely these monies have reached a high water mark and that we may see sharp reductions in them starting next ...See the full content of this document
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