The Pallister government is fulfilling a campaign promise to cut the PST one percentage point, six years after the previous government raised it.
Finance Minister Scott Fielding dropped the provincial budget Thursday, saying they will reduce the PST to seven per cent on July 1.
“We’ve increased the basic personal exemption, ended bracket creep, lowered ambulance fees and, on July 1, we will cut the PST back to seven per cent.”
This means about $325 million in annual savings for Manitobans, said Fielding, who claimed it is Manitoba’s biggest tax cut in history.
“We’ve come within budget for three consecutive years, which we think is important … we are on track to deliver a balanced budget in our second term.”
For 2019, a single person will save about $86, and a four-person household will save about $239 in the six months the tax is reduced. For 2020, a single person will see about $174 in savings, and a four-person household will save just under $500.
So, where will the money come from? Fielding said it will be made up by an increase in transfer payments from the Federal Government and more expected income tax as the province grows.
“Sure it all helps,” said Fielding when asked about only being able to reduce the PST due to transfer payments. “We’re living within our means.”
Bringing down the PST means the province is “correcting a wrong,” said Fielding, and “living up to a commitment.”
Fielding wouldn’t answer questions about a possible early election, referring media to Premier Brian Pallister. NDP Leader Wab Kinew, however, said afterwards he believed the PST cut is a prelude to an election this year.
The budget forecasts a deficit of $360 million, which is $161 million less than predicted.
Manitoba’s current debt is $26 billion, with debt servicing costs at $1.1 billion, the highest ever.
A glaring, green omission is the lack of any kind of current or projection numbers on cannabis in the upcoming budget.
When pressed, a spokesperson told Global News due to shortages, the market is simply too “speculative” to include in the budget projections.
Fielding said they anticipate about $20 million in costs for launching cannabis in Manitoba, and they expect to lose $6 million in beer sales. It will be at least two years before the province makes a profit on cannabis, he added.
“It’s not going to be a major windfall at all for the province,” he said.
Global News has asked for the hard numbers on the current amount of tax revenue the province has collected since Oct. 17, 2018, when cannabis was legalized.
As for the money coming to the City of Winnipeg, it goes up to $113 million from $84 million for specific projects, including rapid transit.
“Quite frankly there’s been quite a bit of drama with this whole city budget number thing. Enough with the drama, we want to get things done.”
Mayor Brian Bowman told reporters afterwards that the $40 million infrastructure hole in the City of Winnipeg’s budget remains.
Highway infrastructure spending is at the same level at $350 million, but overall road and bridge spending is down mostly due to a $40-million reduction in water infrastructure spending.
A quick overview:
Health care
- Lowering ambulance fees to a maximum of $250
- Money for 35 more primary care paramedics
- $20 million pegged for an upcoming program with the federal government on addictions and mental health treatment
- A new Flin Flon general hospital emergency room
Education and daycare
- An increase of $6.6 million to primary and secondary school funding
- Accessibility projects for Ecole Noel-Richot, Mitchell Elementary and projects in Brandon, Niverville, Winkler and Winnipeg
- An increase in operating funding for existing and new daycares to the tune of $759,000
- A decrease in funding to colleges
Infrastructure
- $350 million in dedicated funding for highway projects and bridges, like the Daly Bridge in Brandon
- $313.5 million in basket funding for infrastructure projects for municipalities
- $45 million for capital projects for Manitoba’s 150th anniversary
- $1 billion in funding for roads, bridges, water and wastewater projects, flood protection, hospitals, schools, universities and colleges
- funding for airport improvements at St. Theresa Point, Norway House and Shamattawa
Policing and Citizen Care
- About $325,000 in additional money for organizations like the Canadian Centre for Child Protection, Brandon Victim Services and Candace House
- 29 new RCMP staff, including 27 new officers
- 35 additional primary care paramedics
- $2.3 million to fund programs to target meth and gang related criminal activity
Miscellaneous
- Equalization money from the federal government increases by $218 million for a total of$481 million in Federal Transfer Payments
- Funding for agriculture risk management funding goes down 1.5 per cent
- Increase in funding for the Young Farmer Rebate Enhancement program to $2 million
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