Manitobans won’t be getting any new tax breaks and post-secondary graduates will have less money in their pockets following the new provincial budget.
Manitoba’s Progressive Conservatives tabled its 2017 budget Tuesday afternoon. Although there weren’t any drastic cuts to services, there are still changes that impact education, infrastructure and healthcare.
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“Politically it’s a smart budget because there are no major cuts, but the cumulative effect signals a different path in Manitoba,” Richard Cloutier, political insider and 680 CJOB anchor said.
Tuition rebate slashed
One of the biggest changes to come out of the budget is the elimination of the provincial tuition rebates for graduates who stay in Manitoba.
The program, which was introduced by the NDP government in 2007, paid out $58.5 million a year in tuition rebates.
The rebate was expected to keep graduates in Manitoba and the Tories disagree with that strategy.
Finance Minister Cameron Friesen said “there was no evidence to support it was working.” Instead the government says it will increase the provincial bursary program.
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Graduates in Manitoba can still claim their tax rebate for the 2016/2017 year (up to $2,500). There will be a cap of $500 on the rebate for the following year and then it will be eliminated.
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“The original thought when it came in is that graduates should be encouraged to make their home here in Manitoba,” Evelyn Jacks, president of Knowledge Bureau said.
“So what is the alternative? We are not seeing that in the budget,” she said.
Healthcare cuts
The province is increasing healthcare spending by 1.8 per cent. But compared to last year, increased spending has gone down $200 million. Last year’s budget saw an increase of healthcare spending to six per cent.
“These are bold moves and change is coming,” Friesen said. “The health increase is still significant.”
Over the past year the province has also cut $1 billion in healthcare projects.
Last week the government announced a major shakeup to the Winnipeg healthcare system, closing three emergency rooms and a QuickCare clinic.
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The Premier has repeatedly promised not to cut any front line positions despite the ambitious fiscal goals.
Cloutier said it’s possible the government is moving towards a more “privatization” model for healthcare and start contracting out services.
Deficit reduction
The Tories were elected last year on a promise to end a string of deficits under the former NDP government and balance the books by 2024.
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The deficit is slightly down despite indications the economy is performing well – from $872 million last year to $840 million in 2017. According to the 2017 budget, by the end of the Tories’ first term in government, 2020, it expects to pay the deficit down to $549 million.
The Tories plan to do that controlling the growth in spending every year rather than by imposing deep cuts.
“I am seeing a responsible approach to fiscal spending,” Jacks said.
“Our economy is not sustaining all of the expenditures we have, so this budget is taking an approach to debt service cost reduction.”
Projected revenue of the budget is more than $16 billion, which is expected to increase by nearly $1 billion by 2020.
Salary reduction
Expenditure for salaries are down in many government departments.
When the finance minister was asked whether there would be job losses for civil servants he did not directly answer, but said he hopes to protect front-line services.
Infrastructure spending
The amount of cash heading into infrastructure departments is increasing to $1.7 billion but spending on highways has gone down $38 million.
Water related infrastructure, such as flood protection, has gone up in spending to $20 million.
Spending on capital infrastructure projects is down $932 million. This means there are fewer dollars for new projects around the province.
Changes to tax credits
The primary caregiver tax credit has been capped at a maximum claim of $1,400 per caregiver. Caregivers used to be able to apply the $1,400 for up to three people.
“What is absent here is an opportunity for people to make up economic costs for those who leave workforce to look after family,” Jacks said.
Although primary caregivers may be receiving less in tax credits, the political contribution tax credit is increasing. The maximum contribution to a campaign has increased from $1,275 to $2,325. The means Manitobans can get a total available credit from $650 – $1,000.
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