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Manitoba reviewing provincial taxes in bid to make province more competitive

Click to play video: 'Manitoba announces move to incentivize small businesses'
Manitoba announces move to incentivize small businesses
Heather Stefanson, Manitoba's Premier announced on Wednesday that the province will review and pursue financial incentives geared towards retaining and growing small businesses in Manitoba. "We want to keep those young people here, we've got the jobs for them," Stenfanson added. The move comes after critics remarked that taxes like the provincial payroll tax hampering private-sector expansion – Oct 19, 2022

The Manitoba government is starting a review of personal and business taxes with the aim of becoming more competitive with other provinces.

While Manitoba has been recording annual deficits almost every year since 2009 and is facing demands to spend more money on health care, the Progressive Conservative government said a more competitive tax regime would attract more businesses and boost provincial coffers.

“The way we will improve education and social services, health care, is by growing our economy,” Premier Heather Stefanson said Wednesday.

“If we are growing our economy, there is more tax dollars that are coming to the province to be able to afford the social services that Manitobans need.”

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Click to play video: 'Manitoba budget offers tax cuts, aims to make life more affordable for Manitobans'
Manitoba budget offers tax cuts, aims to make life more affordable for Manitobans

Critics said now is not the time for more tax cuts.

“Given the dire state of our health system and the drastic shortages that lead to worsened patient outcomes, ever-increasing wait times and other deleterious health effects for Manitobans, is this really the right time?” Manitoba Nurses Union president Darlene Jackson said in a written statement.

“Has there ever been a more appropriate time instead to invest in rebuilding our on-the-verge-of-collapse health-care system?”

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Business leaders welcomed the tax review.

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Groups such as the Manitoba Chambers of Commerce have long complained about the Health and Post Secondary Education Tax, commonly called the payroll tax.

It charges businesses a percentage of their total payroll above $2 million a year. Most other provinces do not have a similar tax.

“It remains a disincentive to growth,” chamber vice-president Elisabeth Saftiuk said.

High personal income tax rates also keep some people from moving to the province, she said.

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Manitoba’s phased-in minimum wage rise to $15 gets mixed reviews

The government is to set up an advisory group, consisting mainly of business leaders and financial firms, that is to report back before the spring budget.

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The Tories have already reduced some taxes since taking office in 2016, including the provincial sales tax and an education tax on property. They have also raised the thresholds at which companies start to pay the payroll tax and when individuals start paying personal income tax.

The province also announced Wednesday a subsidy for businesses dealing with a recent increase in the minimum wage.

The government raised the minimum to $13.50 an hour from $11.95 on Oct. 1 — a much sharper increase than it had originally signalled under a formula tied to inflation.

Businesses with up to 20 workers can apply for a subsidy of up to 50 cents an hour for each worker earning minimum wage. It is a temporary program that will expire on March 31.

“We’ve designed a program that we think will be user-friendly, quick and effective and businesses will be able to apply online,” Economic Development Minister Cliff Cullen said.

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More staffing shortages and ER closures plague Manitoba health-care system

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