WINNIPEG — Just six weeks after forming a majority government, the Manitoba Progressive Conservatives has tabled its first budget Tuesday.
The budget reduces Manitoba’s core deficit by $122 million, which was estimated at more than $1 billion in the province’s fiscal update earlier this month.
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The Tories have also committed to balancing the deficit by 2024.
“The previous administration spent beyond its means, which has caused an accumulation of debt,” Finance Minister Cameron Friesen said.
“We have set a target of achieving balance within eight years by pursuing measures that will responsibly address the unsustainable trajectory of spending increases while ensuring the protection of front-line services for all Manitobans,” he said.
The government has not stated how it plans on balancing it, as the 2016/2017 budget does not have a projected five year estimate.
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“This is cautious behavior. Eight years is a lot of times to balance a budget,” said Michael Benarroch, of Asper School of Business.
“The government is sending a message that they are here for the long haul.”
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Indexing personal income tax brackets
The government is now indexing personal income tax brackets, which hasn’t been done by the province since 2000. This means an increase of tax bracket is tied to the rate of inflation.
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Manitoban’s tax brackets will increase in 2017. The average income tax savings are around $10 for middle-income earners and around $67 for higher-income earners. This is expected to cost the province $3.2 million.
This puts Manitoba in competition with other provinces who also index personal income, Friesen said.
Senior tax rebate
Although there is a personal tax break for many Manitobans, the government will be giving away fewer rebates to seniors. The senior school tax rebate is being reduced for around 25,000 people. The province intends to save $37 million a year with the reduction, which used to offer homeowners as much as $470 a year in rebates.
“The government is getting less in taxes but giving away less in rebates,” Benarroch said. “The senior rebates are paying for the tax cuts.”
Seniors below a $40,000 income will still be eligible for a school tax rebate; however they are receiving two per cent less than they were last year. Those seniors making over $63,500 will no longer receive the rebate.
Minister Friesen said they are undoing a political decision made by the NDP, while making sure seniors who need the support still get it.
The average senior household will see their rebate decrease from $400 to $300.
Under the NDP government by 2016, 98 per cent of seniors would no longer be paying school tax.
Ambulance fees
The Tories campaigned on reducing ambulance fees by half during the first term in office.
The government has committed to a five per cent reduction in ambulance fees this year and said there will be a 50 per cent reduction by end of term.
Minimum wage
Raising the minimum wage in Manitoba in 2016/2017 was not mentioned in the budget.
Minister Friesen said this is because the government is “focused on what affects Manitobans first and there will be further consideration for when the time will be right.”
Friesen would not say whether or not there will be an increase this year.
Healthcare
The government is adding $220 million in funding for healthcare to support ACCESS centre, healthcare centres and hospitals. However, there are not any details on which centres will receive funding.
“Many ACCESS centres are complete. You’re announcing stuff that already has been complete. The details are not in the budget,” said Richard Cloutier of 680 CJOB.
Overall tone of budget
Benarroch said this budget sets the table for the next two terms, should the Tories be re-elected.
He also said there is a lot of “fiscal discipline” talk in this budget.
“More so than having significant changes in taxes or policies, it makes a number of indications of the direction they’re going to be taking, including controls on government spending into the future, finding different ways to stimulate economic growth and changing the way Manitobans are taxed,” he said.
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