WINNIPEG – The provincial government will bypass the Manitoba law requiring a referendum on sales-tax hikes to allow it to increase the PST to eight per cent, Finance Minister Stan Struthers said Tuesday.
“The law that we put in place will waive the requirement… for the referendum,” Struthers said at the Manitoba Legislative Building, where the budget was tabled Tuesday.
Struthers billed the budget as one that protects families, businesses and the economy, while repeatedly pointing to the costs incurred by a province that may facing its third major flood in five years.
The PST hike coming July 1 is central to the document, which includes a $518-million deficit for 2013-14, $65 million less than the $583-million 2012-13 deficit projected after the province’s third fiscal quarter.
The budget promises a higher basic exemption in personal income taxes, a tax cut for seniors, $1.8 billion for infrastructure, including $100 million for flood protection work, and an increase in the minimum hourly wage to $10.45 from $10.25 as of Oct. 1.
Costs will be offset by $277.6 million a year extra brought in by the one-percentage-point increase in sales taxes.
Smokers will pay an extra four cents per cigarette, raising an extra $17.2 million for government coffers, and the corporation capital tax on financial institutions is also going up one percentage point to five per cent, raising an additional $12.5 million.
Struthers said the $1.8 billion for infrastructure improvements marks a $400-million increase over 2012-13, including doubling street renewal funding for Winnipeg.
Funding for roads and highways will go up a total of $72 million, the province says. Municipal infrastructure is budgeted to get $24 million more in 2013-14, although transit funding takes a $1.7-million hit.
Infrastructure projects include fixing Victoria Avenue in Brandon, which is leading a CAA poll for the worst road in Manitoba, roads along CentrePort Canada Way, and Trans-Canada Highway improvements between Highway 16 and Portage la Prairie and at its eastern interchange with the Perimeter Highway.
The budget has a 9.6 per cent increase for local governments, which includes the increased infrastructure funding.
Funding for post-secondary education operating expenses will go up 2.8 per cent.
The province is following the federal government’s lead and removing sales taxes from baby needs, including diapers, car seats and strollers.
The increase in the PST puts Manitoba’s rate firmly in the middle in Canada, ahead of the other western provinces and equal to Ontario, New Brunswick and Newfoundland and Labrador. Quebec, Nova Scotia and Prince Edward Island all have higher provincial sales taxes.
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