Province cutting revenue by $363.4 million at expense of education, housing, civil service, and municipalities
April 12, 2022
For Immediate Release (Treaty One, Winnipeg) – Today’s Provincial budget commitment to once again cutting taxes during the COVID-19 health crisis follows the same counterproductive fiscal policy pursued over the last three years.
Cuts to the education property tax will reduce government revenue by $350 million in 2022 and $450 million in 2023. Reductions in vehicle registration fees and payroll tax will reduce revenue by a further $13.2 million in 2022.
Budget 2022 projects a deficit of $548 million: the government is borrowing money to pay for tax cuts, coming at a direct expense to starved public services.
“It is disappointing to see the Provincial government pursue the same tax cut policy which has placed our education and health care systems in crisis. With the economy growing, there is an opportunity to address Manitoba’s nursing shortage, ER overcrowding, and support public education. Instead this government has chosen to borrow money for tax cuts.” – Niall Harney, Errol Black Chair in Labour Issues.
Operating funding for universities, schools and the civil service remain effectively frozen, with no funding to address recruitment and retention among the understaffed public service. Funding for housing and municipalities also remains flat, leaving municipalities on their own to deal with the homelessness and the housing crisis.
Cuts to government revenue will do damage to Manitoba’s public services for years to come. Government revenue grew dramatically in 2021/22 thanks to strong economic growth and generous federal transfer payments. This growth in revenue is projected to continue in the coming years. Tax cuts leave public services unable to benefit from this growth.
The Budget introduces the Residential Renters Tax Credit at $525. This credit replaces the Education Property Tax Rebate for renters which provided $700 in 2020. This change means renters will receive $175 less per household than prior to 2020, with no assurance the province won’t allow landlords to change guideline or above guideline rent increases. This will entrench inequality between property owners, who will receive a larger rebate, and renters.
“With Provincial revenue and federal funding increasing, this is a historic opportunity to invest in healthcare, education, housing, and green infrastructure. By choosing to once again cut taxes the Province is squandering this opportunity.” – Niall Harney, Errol Black Chair in Labour Issues.
The Canadian Centre for Policy Alternatives Manitoba office (CCPA MB) is an independent, charitable, non-partisan research institute concerned with issues of social, economic and environmental justice.