11/20/2012 04:44 EST | Updated 01/20/2013 05:12 EST

Manitoba premier accused of breaking promise to balance budget

WINNIPEG - Manitoba Premier Greg Selinger is defending his shifting budget position in the face of opposition accusations that he has broken a promise to balance the books by 2014.

"We have always said that we will continue to shrink the gap between expenditures and revenues. We will do that while protecting those front-line services that matter to Manitobans," Selinger said Tuesday during the first question period of the fall legislature sitting.

"We've seen other provinces that have also experienced challenges going forward. Economic forecasts are saying that ... there will be a reduction in economic growth."

The Opposition Progressive Conservatives pointed out that the NDP government had made firm promises to end five years of consecutive deficits by the 2014-15 fiscal year. The commitment was written into the province's balanced budget law in 2009 and repeated at the start of the 2011 election. More recently, the spring budget said the province was headed out of the red by 2014.

That all changed this week when Selinger said he was giving his government "wiggle room" to run deficits longer. A new target date for balancing the books is to come by the end of the year.

"Will this premier admit to the Manitobans that he made that promise to that he is not the kind of premier who can be believed any more?" Tory legislature member Kelvin Goertzen asked.

While the Progressive Conservatives called on the government to balance the books, their new leader also demanded a rise in the basic personal exemption on income tax — a move which could cost the treasury another $100 million or more a year.

Brian Pallister said the tax cut is needed to help low-income earners and to help Manitoba catch up with other provinces that have already raised the exemption.

There are ways to implement the tax cut and still balance the budget, he suggested, although Pallister wouldn't provide specifics.

"I'll be outlining those as soon as this week and we'll get into that in great detail. I have numerous ideas on that front," he said outside the legislature.

Manitoba is not alone in facing more red ink.

Federal Finance Minister Jim Flaherty said last week that a weak global economy means the federal deficit will be $5 billion higher than predicted this year and the budget will be balanced a year later than planned.

In Alberta, earlier predictions of a surplus budget by next year have evaporated with a revised forecast of up to a $3-billion deficit.

But there may be more of a political cost in Manitoba. The back-track from the balanced budget promise comes months after the government raised taxes on a host of items ranging from gasoline to home insurance. The NDP had earlier said the books were heading out of the red without any tax increases.

A news release issued by the NDP at the start of the 2011 election campaign said: "Greg Selinger’s five-year economic plan is on track to return the budget to balance by 2014 while protecting jobs and services, without raising taxes."