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Modest cuts, no new taxes

Joyanne Pursaga, Postmedia Network

The province’s 2017 budget is poised to gradually chip away at the deficit but lacked the deep spending cuts some expected.

The preliminary financial blueprint projects the summary deficit will wind up at $840 million for 2017/18 (down from $911 million last year), which includes arm's length agencies like Crown Corporations and universities. The province's core deficit, which excludes those agencies, is expected to top out at $779 million (down from $890 million).

The Progressive Conservative government shaved $39 million off the deficit during its first year in office.

"We believe Budget 2017 puts Manitoba firmly on a road to recovery," said Finance Minister Cameron Friesen.

Manitoba's core deficit is expected to drop to $705 million next year and $585 million the following year, as the province aims to balance its books within the next seven years. But business leaders and a taxpayers’ watchdog said the proposed budget falls short of what’s needed to achieve that.

“Nobody that I'm aware of in Canadian history has ever balanced a budget without trimming spending. And, in this case, the government increased spending by half-a-billion dollars," said Todd MacKay, prairie director of the Canadian Taxpayers Federation.

Overall core government spending will rise 2.1% this year to reach $13.8 billion.

Others expected stricter spending limits and deemed the document a letdown after so much “tough budget” talk.

“I think what ultimately transpired was something that was not very inspiring. I think there could have been more done to wrestle the deficit,” said Loren Remillard, president of the Winnipeg Chamber of Commerce.

Manitobans don’t face new taxes or tax hikes in the budget, which still awaits consultation. Friesen and Premier Brian Pallister said the Tories remain committed to reducing the provincial sales tax back to 7% within their term.

The premier said he’s even open to borrowing money to fulfill that promise.

"I think that that may well be true," said Pallister.

The premier denied claims his government failed to sufficiently reduce the deficit.

"What we did today was we balanced the importance of getting to balance with the need to protect the services that Manitobans count on … We've taken a major step on the road to recovery today,” he said.

The budget doesn't alter the minimum wage, which currently sits at $11 an hour, though Pallister said an announcement on that will come soon.

If the budget is finalized as is, the Progressive Conservative government will spend $1.7 billion on infrastructure, including $747 million for roads, highways, bridges and flood protection.

Chris Lorenc, president of the Manitoba Heavy Construction Association, said he considers about $1.17 billion of that to cover what he defines as core infrastructure.

"It’s a slight increase over the $1.039 billion last year … There's a little bit of movement, which I think is good,” said Lorenc.

Municipalities appeared relieved just to see their funding frozen at 2016 levels.

"It does create a challenge for municipalities because it doesn't address the inflationary challenges municipalities face over one year. We realize, too, it could have been worse," said Chris Goertzen, president of the Association of Manitoba Municipalities. "We're not disatisfied with the result."

Winnipeg Mayor Brian Bowman agreed there was relief the province will maintain its “strong partnership” with the city.

But both civic leaders expressed concern that the budget didn’t mention the Building Manitoba fund.

“The building Manitoba fund wasn’t mentioned in the budget and so what their plans are for the Building Manitoba Fund as it relates to support for infrastructure in the City of Winnipeg … is something that I do have concerns about,” said Bowman.

Budget highlights:

-No new taxes or tax increases.

-The primary caregiver tax credit will be capped at $1,400 annually, which will affect about 10% of those who receive it.

-Overall core government spending will rise 2.1% to reach $13.8 billion.

-Summary net debt projected to reach $24.7 billion.

-The political contributions tax credit will increase in 2018, raising the maximum eligible contribution from $1,275 to $2,325 and the annual credit from $650 to $1,000.

-Continued indexing of personal income tax brackets to inflation and the basic personal amount is expected to remove 2,100 people from the tax roll in 2017 and another 2,600 in 2018.

-Funds two replacement ambulances for the Winnipeg Fire Paramedic Service.

-Adds $6.5 million to continue reducing ambulance fees.

-Includes $1 million more for three nursing stations in northern Manitoba.

-Adds $105 million or 5.4% more for the department of families.

-Creates 501 licensed child-care spaces and 50 new home-based spaces.

-Adds $12.8 million for affordable housing.

-Includes $1.7 billion for infrastructure, including $747 million for roads, highways, bridges and flood protection; $641 million for health, education and housing infrastructure; and $370 million for municipal, local and other provincial infrastructure.

-Health-care spending rises just 1.8%. That hike does include $107.5 million more for primary health care, including: $1.7 million for universal newborn hearing screening, $8.8 million to expand dialysis treatment, $1.6 million more for mental health services, $9.4 million more for new cancer drugs and $6.5 million to further reduce ambulance fees.

-Eliminates the current film classification board, switching to a B.C. model instead.

-Adds $12 million to index Rent Assist benefits to 75% of the median market rate.

-Adds $10 million to the fiscal stabilization (rainy day) fund

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