Opposition Parties Need to Stand Firm Against Tax Cuts for the Rich

By Jesse Hajer

The 2023 Manitoba budget proposes over half a billion dollars in tax cuts, but many Manitobans won’t see a dime, while the richest Manitobans will get the lion’s share of this money. The Canadian Centre for Policy Alternatives has shown that over 100,000 Manitobans – those with the lowest income and most in need – will get nothing from these tax cuts.  In fact, the bottom 500,000+ Manitobans will get less than the 100,000+ highest-income Manitobans. These tax cuts are the sequel to the Manitoba  government’s Education Property Tax Rebate that similarly handed out the largest payments to wealthy property owners while taking benefits away from lower-income renters.

Tax cuts are a double insult to our less fortunate. Working- and middle-class Manitobans get the short end of the stick again when our health and education systems are starved to pay for these tax cuts. The reality is that these families simply don’t have the resources to pay for private schools and tutors for their children or hop on a plane for private surgeries when our systems fail to meet their needs.

That the Stefanson government is handing out the most to the well-off (as broad, non-refundable tax cuts always do, versus targeted, refundable credits) shouldn’t be a surprise.  It is always a challenge for working- and middle-class households to have their interests reflected in the legislature. Corporations and the wealthy pour millions of dollars into advertising, lobbyists and think tanks to promote and advance their interests.  Labour unions in Manitoba, one of the few institutional forces that consistently stand up for working- and middle-class Manitobans, are pushing back against these cuts. Manitoba’s opposition parties should take note, and not fall into a race to the bottom that will morally bankrupt our province, while doing no favours for fiscal sustainability.

The reality is every dollar handed out to the wealthy is a dollar less we have for healthcare, education, child care and other government services that the vast majority rely on for a decent quality of life. Strong public services provide the foundational infrastructure that allows our economy to function and be competitive.  This is particularly important given tight labour markets and continuing social challenges arising out of the pandemic. We need to invest in people so we can work as a province.

Unfortunately, our public services have been thrown into crisis by years of underfunding and cuts. Wage freezes and deteriorating working conditions for public sector workers have led to people leaving for other sectors and provinces, early retirements, and recruitment challenges that will take years to remedy. Making our public sector an employer of choice again is the first step in reversing this downward spiral, but we must have revenues in place to back up such a commitment.

The government has tabled a budget with tax cuts, spending increases, and a smaller deficit, thanks to growing revenues. This combination is only possible due to an inflationary windfall and repressed public sector wages due to the government’s heavy-handed wage freeze and approach to labour negotiations.  Wages will need to catch up with inflation if we are going to solve the staffing crisis in the provincial public service, but multiple massive tax cuts will lead to structural deficits and the need for further service cuts and austerity.

Running deficits in this context to send money to the richest Manitobans is not only fiscally irresponsible, it is also morally questionable, given the pressing needs of less fortunate Manitobans. Manitoba’s opposition parties should commit to repealing proposed and recent tax cuts and replacing them with investments in public services and more affordable benefits targeting those genuinely struggling with the rising cost of living. 

This will take some courage on the doorstep in some of Manitoba’s swing ridings. Parties must ask higher-income Manitobans to prioritize our collective well-being and sustainability as a province. Manitobans are prioritizing progress on rising inequality and pressing social problems like the homelessness and addictions crisis laid out in our towns and cities for all to see. This may not be an easy conversation, but it is one well worth having. At least one poll has shown that a majority of Manitobans support investing in public services over tax breaks. Manitobans may be more generous than our politicians give them credit for.

Jesse Hajer is an Assistant Professor of Economics and Labour Studies at the University of Manitoba and a Research Associate with the Canadian Centre for Policy Alternatives – Manitoba