Manitoba Budget 2007

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Today's budget day!

Pre-election budget offers a little for everyone
Last Updated: Wednesday, April 4, 2007 | 4:23 PM CT
CBC News
Manitoba's NDP government introduced moderate tax reductions for taxpayers and businesses, as well as new initiatives on the justice, infrastructure, health and environmental fronts, in its 2007 budget tabled Wednesday.

Finance Minister Greg Selinger says his new budget "lays a solid foundation for the future of the province."

Total revenue in the province is up 5.9 per cent over last year to $11.8 billion, while spending is up 6.8 per cent to $11.6 billion — leaving the province with an expected surplus of $175 million.

The government expects to draw $37 million from the fiscal stabilization or "rainy-day" fund for health-related programs including wait-time reductions, leaving the fund with a balance of $460 million at the end of the 2007-08 fiscal year. That's about $17 million less than the fund's expected balance at the end of the 2006-07 fiscal year.

The 2007 budget is the first in 50 years to provide a summary budget using generally accepted accounting principles, as has been encouraged by the auditor general for years.

The new summary budget includes both core government services directly under the government's control — as in previous budgets — and "government reporting entities," including Crown organizations, health authorities, post-secondary educational institutions and public schools.


Personal taxes

The province is reducing the income-tax rate for middle-income earners by a quarter of a percentage point to 12.75 per cent, and increasing the middle-income threshold to $66,000 effective in 2008.

The 2007 budget also adds $200 to the basic personal exemption, and increases the spousal amount and eligible-dependent amount by 24 per cent to match the basic personal amount. Previously announced income-splitting for seniors is also included, mirroring changes in the federal budget.

The changes will save taxpayers relatively small amounts of money on their taxes for the 2008 year:

A single person earning $40,000 would save $46.
A senior couple earning $40,000 through private pension income and old age security pension would save $43.
A family of four with one earner making $60,000 would save $194.
A family of four with two earners making $100,000 a year would save $127.
The government also increased the education property tax credit to $525 from $400. The farmland education tax rebate was also increased by five percentage points to 65 per cent.

The province will also invest more than $14 million in child care to backfill a withdrawal of funds that were expected to come through a program of the former Liberal federal government, which was killed by the Conservative government.

Taxes on cigarettes and liquor will remain the same.

Business taxes

The budget also reduced the general corporation income tax rate to 13 per cent on July 1, 2008 — a drop of one percentage point. The small business tax will be reduced to two per cent in 2008, down one percentage point.

The threshold for the payroll tax — officially called the health and post-secondary education levy — increases to $1.25 million, up from $1 million, which will exempt about 200 employers from the tax.

In what is likely an attempt to head off criticism about reduced venture-capital investments in the wake of the collapse of the Crocus Investment Fund, the budget expands the community enterprises development tax credit program to include a 30 per cent tax credit for investments in emerging enterprises, for startups and early expansions.

The budget did not include a cut to the provincial sales tax, which some analysts forecast after Saskatchewan cut its sales tax earlier in the year.

Selinger said the PST was already one of the lowest in the country, and he preferred to put more money in consumers' pockets through tax reduction.

Health care

Expenditures in health care, traditionally the largest piece of the spending pie, increase by $172 million to more than $4 billion in the budget, roughly an eight per cent increase over last year.

While the budget did not include many initiatives that the government had not previously announced, it confirmed funding of training for doctors and nurses and reductions in waiting times for hip and knee surgeries.

Officials also announced the province will install a new $10-million "non-invasive cancer knife" — the first of its kind in Canada — to treat cancers in all parts of the body. Officials expected to release more details in the coming weeks.

The budget eliminates the fee for inter-facility transfers, at a cost of $6 million.

It also introduces a children's fitness tax credit to complement a similar credit. The combined federal-provincial credit will provide parents with up to $132 to assist with the cost of registering children in physical activity programs.

Law and order

The new budget provides funding for 30 new police officers across the province: 14 for Winnipeg — including five previously announced for the stolen auto unit — two new officers for Brandon and 14 new RCMP officers, which officials hope to have in place by Jan. 1, 2008.

In co-operation with the City of Winnipeg and school boards, the province also agreed to fund three new police officers for the school-resource program. They'll work in Gordon Bell, Hugh John Macdonald, Kelvin, Grant Park and Churchill high schools.

Education

The budget continues the NDP government's tuition freeze at Manitoba's post-secondary institutions

Average funding to the provinces' universities and colleges will increase seven per cent — up two percentage points over last year. Government officials said this was the equivalent of a four per cent tuition increase.

The budget also makes good on a previously announced 60 per cent income tax rebate on tuition fees for all post-secondary graduates who live and work in Manitoba, designed to make staying in the province more attractive to young graduates.

Young people who live and work in Manitoba will pay among the lowest tax rates in Canada, Selinger said.

'Green' initiatives

The budget confirmed the previously leaked increase of Manitoba Hydro loans for geothermal systems to $20,000, and also announced interest rates on such loans would be locked in at 4.9 per cent for the first five years.

It also confirmed an already announced $2,000 rebate for drivers who buy hybrid vehicles.

The budget introduces a new "green energy manufacturing credit," which provides a 10 per cent credit against the costs a manufacturer incurs to make a system more environmentally friendly.

The province is also restoring the 50/50 funding split with municipal governments for public transit in centres including Winnipeg and Brandon.

Infrastructure

The budget confirmed its previously announced investment of almost $400 million next year in highways, as part of a five-year, $2-billion plan to improve road infrastructure.

The budget also allocates $33 million under cost-shared agreements with municipalities and the federal government for projects such as upgrades to Winnipeg's wastewater and water-treatment system and other programs in Swan River, Winnipeg and Brandon.

The province also announced it would spend $104 million on affordable housing projects — including inner-city revitalization, urban aboriginal housing, northern housing, homelessness and initiatives to help low-income seniors live at home.

Just over $61 million of that money has already been provided by the federal government, with the balance coming from the province; about $10 million to $20 million of that money will be spent next year and the rest over the next four years.

The budget's delivery was delayed for about 45 minutes on Wednesday afternoon after the Liberals introduced a motion asking for Selinger to be replaced with someone more "honest."

The move was part of the opposition's ongoing protest of the government's refusal to call a public inquiry into the collapse of the Crocus Investment Fund.

Overall, I'm disappointed. I was hoping for deeper income tax cuts... 0.25% isn't enough.

Also there's nothing specific for downtown Winnipeg. I think the NDP/provincial gov't needs to be committed to downtown as much as the city should be.

What about rapid transit for Winnipeg? Provincial gov't could have made a huge positive (and green) statement with an annoucement like that...but no.

Nothing really in the budget to keep me here... while the economies and tax situation in B.C., Alta and Sask. continue to get better, Manitoba continues to be a mediocre place to live and do business.