WINNIPEG - If the Manitoba's fiscal record is any indication, the government's plan to balance the books by 2016-17 will be at least partly funded by another tax hike, the Opposition says.

"What the province came through with last time was the largest tax increase in the last quarter-century in this province," Progressive Conservative Leader Brian Pallister said Tuesday.

In the spring, the province announced a $106.5-million expansion of the provincial sales tax, adding the levy to services such as hairstyling, beauty treatments and insurance.

Manitoba has now officially delayed its deadline to balance the budget by two years from the original 2014-15 fiscal year.

Pallister said the 2011 spring flood costs often blamed for washing away Manitoba revenues really account for just a quarter of the NDP's "spending problem."

"It was supposed to be the flood of the century, not the excuse of the century," said Pallister.
Last year's Manitoba deficit was the largest recorded in provincial history, at $999 million. This year's deficit is forecast to be about $500 million.

Colin Craig, the Manitoba director of the Canadian Taxpayers Federation, said the fiscal trend is worrisome.

"In the past 12 years, they have spent more than they've budgeted," said Craig.

The premier did not rule out a possible tax increase following his annual State of the Province address to about 1,000 people at the Winnipeg Convention Centre on Tuesday.

"Every budget, we put a priority on affordability in Manitoba," said Premier Greg Selinger. "Nothing is being ruled out as we go forward but that focus on affordability is one of our key priorities."

Selinger said record flood prevention and repair costs of at least $1.2 billion did have a significant impact on the overall budget.

Selinger did not reveal the latest projection of this year's deficit, stating Finance Minister Stan Struthers would do so in about a week.

Dave Angus, president of the Winnipeg Chamber of Commerce, said he agrees flood 2011 eroded the government's bottom line. But he said the business community needs the government to combat that financial hit without worsening an already over-taxed business environment.

"We're not in a situation where we can afford to keep our taxation where it is right now. We need to get to a point where we can reduce the taxes to be comparable to other jurisdictions," said Angus.