2017 Manitoba budget: Students, caregivers take tax hit but budget leaves most wallets unaffected
PC spending plan to maintain range of tax rebates, reduce ambulance fees, support low-income housing
Apart from a handful of niche, targeted programs, most Manitobans will not see a big impact on their personal bank balances from the 2017 budget.
"Budget 2017 puts Manitoba on a road to recovery with tax relief, no tax increases and no new taxes," said Finance Minister Cameron Friesen in his budget speech Tuesday.
While sidestepping hikes to taxes, the government reiterated its pledge to decrease the provincial sales tax by one per cent by 2020, the final year of its current mandate. The PST in Manitoba is currently at eight per cent.
Personal tax credits PCs to keep:
- Children's arts and cultural activity tax credit.
- Fitness tax credit.
- Adoption tax credit.
- Fertility treatment tax credit.
- Seniors' school tax rebate.
- Education property tax credit.
- Farmland school tax rebate.
The Progressive Conservatives are maintaining a range of tax credits, including the children's arts and cultural activity tax credit and the seniors' school tax rebate, while eliminating credits for post-secondary students as well as reducing how much caregivers can claim on their returns.
The Progressive Conservatives are also increasing the amount of political contributions eligible for tax credits from $1,275 to $2,325.
The PCs say eliminating the tuition fee income tax rebate and the tuition fee income tax rebate advance will save $46.5 million and $6.4 million, respectively, for the 2017-18 tax year.
The province is also planning to change the primary caregiver tax credit, by capping the maximum credit claimable at $1,400 in 2017, to save the government $8.6 million.
Friesen called Manitoba's tax credit system "unwieldy" and said the government plans to review the more than 30 personal and business credits, worth about $600 million, on an annual basis.
Personal tax credits PCs to eliminate:
- Tuition fee income tax rebate advance.
- Tuition fee income tax rebate (to be phased out by 2018).
The government says more than 90 per cent of caregivers who benefit from the credit will not be affected by the change.
There is no mention of an increase to Manitoba's minimum wage, which has remained at $11 per hour since 2015.
"It's an astounding thing when the premier himself has a raise of over $20,000 but he can't give those who earn the least in our province a rise," said NDP finance critic James Allum.
Manitoba taxpayers are set to save $23 million this fiscal year, and a further $34 million by 2020, after the budget delivered on last year's promise to index personal income tax brackets and the basic personal exemption to Manitoba's inflation rate.
Indexing will remove more than 2,100 low-income taxpayers, who would have paid tax at 10.8 per cent, from tax rolls entirely.
Molly McCracken, Manitoba director for the Canadian Centre for Policy Alternatives, called it a "blunt measure" that will do little to help people living in poverty.
"It actually only saves low-income people $15 a year, which is really nothing," she said. "That's less than the cost of a box of diapers."
For those who fall into higher tax brackets, they will see a negligible decrease of up to $47 in the 2017 tax year.
Over time, if the rate of inflation continues to grow at around two per cent, taxpayers could save up to $234 by the 2020 tax year.
Allum said there are better ways than indexing income tax to make life more affordable for lower-income people.
"It ultimately results in the higher income level benefiting and those at the modest and lower income level receiving little or no benefit at all," he said.
"We had the lowest bundle of utility rates in the country — home heating, hydro, automobile insurance. All of those things are going to go up and so Manitoba's affordability advantage is being frittered away."
Low-income housing supports
The Progressive Conservatives are following through on their promise to preserve the Rent Assist program, which was introduced by the New Democrats when they were in government.
The financial benefit helps lower-income Manitobans, including those on Employment and Income Assistance, cover rental costs and mortgage payments.
The province will provide an increase of $86 million — from $436 million in 2016-17 to $522 million this year — to fund Employment Income Assistance and Rent Assist, with $12 million going toward continuing to index Rent Assist benefits to 75 per cent of the median market rate.
Friesen noted the government will conduct a review into Rent Assist this year to "ensure that available benefits are reaching those most in need."
The review worries McCracken, who said she was pleased the benefit is being maintained and said research has shown it to be successful.
"I really hope they talk to people with lived experience because what I heard is that people really appreciate this. Housing costs have gone up a lot," she said.
As part of the $86-million increase, the budget also earmarks $8 million for refugees who are no longer eligible for federal government settlement funds.
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