Manitoba slows a tax cut, offers some additional health-care spending

WINNIPEG — Manitoba’s Progressive Conservative government is planning to move more slowly on a promised tax cut, reduce a handful of other levies and inject some money into a health-care system battered by COVID-19.

Tuesday’s budget was the first under Premier Heather Stefanson, who took over after Brian Pallister retired last fall.

The fiscal plan still includes the intention to phase out the province’s education tax on residential and farm property via rebates, but at a slower pace than Pallister had promised in last year’s budget.

“We chose not to accelerate it at the pace that it was before, and we did that for a reason, because we’re still in very difficult times,” Stefanson said.

Pallister aimed to increase the rebate this year to 50 per cent from 25 per cent. Tuesday’s 2022 budget looks to raise the rebate to 37.5 per cent and to delay the 50 per cent target until next year. The increase would still save the average homeowner $196, the government said.

A similar tax credit for renters is to be expanded to more recipients, including people in social housing who were previously ineligible.

The government is also planning to cut annual registration fees for most non-commercial vehicles by another $10, following two similar cuts in recent years.

Some companies are to get a break as the province increases the threshold at which employers pay a tax on their payroll to $2 million from $1.75 million in total remuneration.

Finance Minister Cameron Friesen said the government can cut taxes at a time when health care is stressed and deficits are ongoing.

“We simply think it’s not correct to make Manitobans wait. We think that they need relief now. They need affordability now,” he said, pointing to rising inflation.

In health care, the province is promising $9 million to expand intensive care unit capacity. Manitoba’s shortage of ICU beds was so severe during the worst of the COVID-19 pandemic that at one point dozens of patients were sent to other provinces in an attempt to free up beds.

The government is also promising $110 million to reduce a backlog of surgeries and diagnostic tests that were postponed during the pandemic, although it has not set a target date for eliminating the backlog.

There is also more than $600 million set aside for contingencies that could range from an influx into the province of people fleeing Ukraine to more waves of the pandemic.

With expected economic growth and a rise in federal transfer payments, the government is forecasting a deficit of $548 million, down from $1.4 billion in the last fiscal year. With the exception of a small surplus in 2020, Manitoba has not achieved a balanced budget since 2008 and is not expecting to see another until 2028.

A political analyst said the government, which has sunk in opinion polls since the pandemic’s second wave, appears to be trying to regain public favour with a middle-of-the-road approach before the election slated for October of next year.

“I think they’ve had enough excitement and enough explosions and backlashes from various segments of Manitoba society,” said Paul Thomas, professor emeritus of political studies at the University of Manitoba.

The Opposition New Democrats said the tax cuts are coming at the expense of proper funding for front-line services.

“Instead of setting herself apart from Brian Pallister, (Stefanson) repeated his mistakes by underfunding health care and schools,” NDP Leader Wab Kinew said.

The Manitoba Nurses Union said that while the budget mentions increased training for future nurses, it offers little hope to those facing overwhelming workloads during the pandemic.

“What I’m hearing from nurses is they need relief right now … and we’re not seeing that,” union president Darlene Jackson said.

This report by The Canadian Press was first published April 12, 2022.

Steve Lambert, The Canadian Press