Manitoba tables Budget 2023, promising tax relief and increased spending

Despite lowered revenues from corporate income tax (-$183 million) and a reduction in the net income of government business enterprises (-$202 million), Manitoba offset the losses with increased federal transfers in the form of equalization (+$577 million), health (+$134 million), and other transfers (+$331 million).

 Manitoba tables Budget 2023, promising tax relief and increased spending
THE CANADIAN PRESS / David Lipnowski
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The Manitoba Tories unveiled Budget 2023 this week, providing tax relief to residents while earning criticism for increased spending during an election year.

"Budget 2023 will help people across all areas of family and community life while we work hard to create economic opportunities. This budget is about doing everything possible for Manitobans when they need it most," said Finance Minister Cliff Cullen on Tuesday.

In the budget, Manitobans can make up to $15,000 tax-free on their provincial income tax, up from $10,145 and saving taxpayers upwards of $524.

In 2024, the income tax brackets will be changed by increasing the lowest tax rate to the first $47,000 of income, and the second rate applies from $47,000 to $100,000.

The income tax rate adjustments will tax more Manitobans at lower tax rates and save them up to $1,399 in 2024.

"Today's tax relief is good news and will let Manitobans keep more of their money when it's needed the most," said Gage Haubrich, Prairie Director of the Canadian Taxpayers Federation (CTF).

"But families are struggling to afford groceries today, so why is the government waiting until after the election to provide the full tax cut?"

The CTF urges the province to speed up and offer more relief immediately.

According to the CTF, Manitobans pay among the highest taxes in the country. They said a family making $75,000 in Winnipeg spends thousands more in provincial taxes than those in Regina, Calgary, or Toronto.

Haubrich recommended the province offset the cost Manitobans pay on the federal carbon tax, which amounts to $402 more on average in the fiscal year 2023/24, followed by steady, successive increases over the next decade.

Budget 2023 also projects the province's deficit at $363 million and a provincial debt growing to $31 billion by the end of 2023. Debt interest charges cost each resident $906 annually and $1.3 billion this year.

"The government needs to balance the budget and stop throwing more debt on the backs of future Manitobans," said Haubrich, adding that that's enough money to build the planned new hospital in Portage la Prairie three times.

"More than $1 billion can't be used to improve services or lower taxes this year because it's going to the bond fund managers on Bay Street to pay interest charges on the government credit card."

"As the only Prairie province to project a deficit in the fiscal year 2022/23 (-$378 million), news of another deficit planned for the coming year came as no surprise," added RBC economist Rachel Battaglia.

She lauds the fiscal shortfall of $363 million in the fiscal year 2023/24 as a slight improvement in the province's bottom line, which she attributes to revenue growth (+4.5%), narrowly outpacing expenditure growth (+4.4%). 

Battaglia acknowledged Budget 2023 as another step toward the Manitoba government fulfilling its commitment to balance its budget by 2028/29.

Since 2009, Manitoba has run deficits every year except in 2019, with a small $5 million surplus.

"Spending outpacing revenues has long been a problem in Manitoba. Over the past ten years, the budget has been balanced only once," said Haubrich.

"Since the pandemic started, government revenue in Manitoba increased 16%, while spending has increased 24%. This problem needs to end by controlling spending across the board."

On Monday, Cullen said the province could spend more because of higher transfer payments from the federal government and with the COVID pandemic over.

Despite lowered revenues from corporate income tax (-$183 million) and a reduction in the net income of government business enterprises (-$202 million), Manitoba offset the losses with increased federal transfers in the form of equalization (+$577 million), health (+$134 million), and other transfers (+$331 million).

"That allows us to make strategic investments in healthcare, education, social programming, and, as you will see tomorrow, more affordability assistance for Manitobans," said Cullen at a press conference.

The Manitoba Tories raised spending from $19.9 billion to $21.9 billion this fiscal year, with the department of families being the recipient of the most significant funding increase (+$234 million), followed by agriculture (+$211 million), health (+$171 million), and education and early childhood learning (+$110 million).

However, the province's opposition parties accused them of buying voters with increased spending amid low polling numbers. The NDP has led the polls for the past two years and said the PCs should not be trusted.

"There's a lot of reasons to be worried that if we do continue to give this government the benefit of the doubt, they will continue to do what they've done over the last seven years, which is to continue to make cuts to the services that Manitobans rely on," said NDP Finance Critic Adrien Sala.

"We've seen for the last few months the PCs have been hosting the province with money to try to put out the fires they have created," added Liberal leader Dougald Lamont.

But Cullen maintains the budget curbs the cost of inflation and is not another cheque straight from the government.

"The budget allows us to do some things outside of putting cheques in the mail," he said.

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  • By Ezra Levant

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