Home » The Canadian Press » Manitoba Pre-Election Budget Offers Tax Cuts, Higher Spending

Manitoba Pre-Election Budget Offers Tax Cuts, Higher Spending

March 7, 2023 2:53 PM | The Canadian Press

By Steve Lambert, The Canadian Press

Manitoba Legislative Building

The Manitoba Legislature in Winnipeg, Saturday, Aug. 30, 2014. (THE CANADIAN PRESS/John Woods)

WINNIPEG — Manitoba’s Progressive Conservative government is loosening its purse strings and promising what it calls record income tax cuts in its last budget before a provincial election.

The fiscal plan put forward Tuesday, with almost $2 billion in new spending, is a marked departure for the governing Tories after several years of fiscal restraint.

“Unlike the budgets of my predecessors where fiscal responsibility ruled the day, Budget 2023 fully reflects the Progressive Conservative roots of our premier (Heather Stefanson),” said Finance Minister Cliff Cullen, who was named to the post earlier this year.

“This year’s budget provides help when it is most needed. It provides historic help for Manitobans.”

The fiscal plan boosts spending on health care, social services and other areas by an average of close to 10 per cent. Among many new measures in health care, the government is expanding coverage of insulin pumps to all adults with a diagnosis of Type 1 or Type 2 diabetes. Until now, coverage was limited to people aged 18 to 25.

Personal and business taxes are also being cut in the proposed budget, although much of them are promised for after the election.

This year, the basic personal exemption — the threshold at which individuals start to pay income tax — will rise to $15,000 from $10,145. The change is to save people up to $524.

Next year, personal income tax brackets are to be moved higher. The middle bracket would rise to $47,000 from $36,842, and the top bracket would move to $100,000 from $79,625.

The threshold at which employers are charged a tax on their payroll is also to increase next year, to $2.25 million from $2 million. The rate of the payroll tax may also be reduced next year if provincial revenues are higher than expected, Cullen said.

The Opposition New Democrats accused the government of trying to change its stripes in advance of the election scheduled for Oct. 3.

“We all remember the seven years of cuts that started under (former premier) Brian Pallister and that have continued under Premier Stefanson,” NDP Leader Wab Kinew said.

“And now all of a sudden, during an election year … the PCs want Manitobans to forget.”

Kinew would not say whether his party would follow through on the planned tax cuts next year if it wins the election. He said the NDP is to reveal its fiscal plan closer to the campaign.

The governing Tories have been trailing the NDP in opinion polls for more than two years. The numbers did not move after Stefanson replaced Pallister as premier in 2021.

The drop in support started during the second wave of the COVID-19 pandemic as hospitals struggled to handle a surge of patients. At one point, dozens of intensive care patients were flown to other provinces due to a bed shortage.

The budget includes previously announced funding aimed at reducing wait times, easing surgery backlogs and recruiting more nurses.

The government can afford the new spending and tax cuts thanks to a rebounding economy and increased federal transfer payments, Cullen said. Federal equalization payments, which help poorer provinces offer services similar to richer ones, are up by 19 per cent — or $577 million — this year in Manitoba.

The budget predicts a deficit of $363 million, down slightly from $378 million in the current year, on total spending of $21.8 billion.

Liberal leader Dougald Lamont said the government appeared to be laying a “trap” in which the opposition parties would vote against the budget and then the Tories could call an early election and campaign on the tax cuts.

Stefanson was asked by a reporter whether she would commit to not calling an early election.

“Oct. 3 is the date as it is right now, so absolutely,” she said.

Manitoba budget highlights:

— The basic personal exemption on income tax is to rise this year, saving people up to $524.

— Income tax brackets are to be moved higher next year, with the top bracket starting at $100,000 instead of $79,625.

— The threshold at which employers are charged a tax on payroll is to rise next year to $2.25 million from $2 million.

— Overall government spending is forecast to rise by almost 10 per cent from last year, with health care seeing a nine per cent rise.

— Pharmacare coverage for insulin pumps is expanding to all eligible adults with Type 1 and Type 2 diabetes.

— University tuition increases will be limited to 2.75 per cent.

— Government revenues are increasing sharply due to a rebounding economy and higher federal transfer payments.

— The budget predicts a deficit of $363 million, down slightly from the $378 million forecast for the current fiscal year that ends March 31.

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