The small business barometer for Manitoba, measuring business optimism in the province, increased this month to 57.7 -- just below the national average of 58.2. 65 is the level of reading that the country needs to see its economy grow at its full potential.

Canadian Federation of Independent Business provincial affairs director Elliot Sims outlines factors that contributed to the rise.

"There's a number of things that influence the business barometer. It could be things like global factors, like exchange rates, and then the price of oil, to more local factors, such as how much rain is occurring, and how that impacts the agricultural sector. So, there's a variety of reasons why it could have gone up or down. In this case it edged higher but not by a lot. So, there's a variety of little factors that probably played a role in this rather than pointing to one specific recent."

Sims notes it's actually pure coincidence that the rise occurred after the change in provincial governments.

"Our chief economist has taken the time to explore that and see what kind of relationship exists between elections and the business barometer, and the optimism levels that entrepreneurs are seeing in their place of business. What we found is there is no causation effect between having provincial elections occur and changes in government, and rises in the business barometer. So, it seems to be purely coincidental that the business barometer rose at the same time as the new provincial government came into power in Manitoba."

In order to bump it up and get to the level the province needs to be, Sims says, "It's encouraging to see small business optimism edge higher in May. But what we really need to see to change this barometer reading and to make it more sustainable at the at level of 65 or higher, which means the economy is growing at its potential, is a change in government policies. What we need to see is a provincial budget that will outline that vision next week, and while we understand the large deficit that the province currently faces, that's going to restrict the ability to move as fast and as far on some policies as we'd like, there are four specific policies that small business owners want to see happen that will set the tone for the future policy vision. And those are indexing the personal income tax system to inflation. We are one of only three provinces that currently doesn't have this policy in place. We'd also like the see the small business corporate income tax threshold moved up to the provincial standard of $500,000. While Manitoba has been a leader when it comes to the rate of tax that small businesses pay, we've been a laggard when it comes to how many businesses can access the small business rate. The other two principles that we want to see in the upcoming budget are to ensure provincial government spending increases are no more than the sustainable rate of 2.7 %. In other words, we want to see government spending increase at the same pace as inflation, and population growth, but no more than that. And we also want to see a clear plan outlined to eliminate the deficit by 2020."

Sims adds, "Entrepreneurs believe in this province, and they want to be able to expand their businesses here, create jobs for their friends and for their neighbours, and their communities and to make sure that all Manitobans prosper. The only way to do that is to get down to business at the provincial level, and fix a lot of the problems that right now are making Manitoba have an uncompetitive small business climate.

The rates across the country include British Columbia at 67, Quebec is over 60 and Ontario is 65. Sims compares Manitoba with these provinces.

"We know that over the long term horizon, when we're looking at a five year average of provinces, traditionally Alberta, B.C. and Saskatchewan have always been consistently higher than Manitoba's barometer. That's changed slightly in the most recent years with the drop in oil prices. But the difference has been is that those provinces that are consistently outperforming Manitoba also had an have governments that are small business friendly. So, in places like B.C., we've seen a very strong focus on regulatory accountability, and reducing red tape. There they've actually reduced the regulatory requirements on small businesses by 42% in the last 15 years or so. In Sask we've seen a government that has not only been focused on regulatory accountability, but also has been reducing taxes, and making sure that businesses have more of their resources to invest back into their businesses to create jobs, train employees, buy new plants, and equipment to make them more competitive. The same was true in Alberta where we saw the government keep a lid on tax increases, and make sure that small business issues, such as running a balanced budget and reducing debt at a provincial government level were areas of priority and focus. For the last number of years in Manitoba, unfortunately those principles of creating a competitive tax environment, keeping a strong eye on regulatory accountability, and focusing on providing balanced budgets and reducing government debt were not the priorities of the previous government."

P.E.I. sits at 75%, and Sims explains why.

"That's unusual for P.E.I.. For the longest time they were right around where Manitoba is; down in the low 50's. But there's been a combination of factors that have really boosted confidence in that province. One is that the price of oil is dropped. And the province is very dependent on importing oil and using those products, the lower cost input has significantly helped them. The other has been the de-evaluation of the Canadian Currency. There is a significant rebound in American tourism coming to the island for all of the tourist opportunities that they provide, which they've seen add significantly in the last three or our years, when the Canadian dollar was at parity with the US."