Budget 2023 hands down large tax cuts on the back of increased federal transfers

For Immediate Release (Winnipeg, Treaty One Territory): We are disappointed to see the provincial government prioritize large tax cuts in its 2023/24 budget at a moment when our provincial health care system and other social services are struggling to keep up with demand. 

The 2023/24 budget commits to $949 million in tax cuts, including $326 million to raise the Basic Personal Amount, $160 million to raise income tax thresholds, and $453 million on education property tax rebates. 

These income tax measures will increase income inequality in Manitoba while reducing government resources to repair public services pummelled by COVID and seven years of austerity. “These regressive tax cuts increase income inequality as they disproportionately benefit the best off in our society. Manitoba could have helped low income Manitobans and maintained tax rates on high income earners. Instead wealthy Manitobans are getting thousands in tax breaks, limiting funding available for social programs that give the highest social return on investment.” says Molly McCracken, Director at the Canadian Centre for Policy Alternatives – Manitoba.

Proposed changes to the Basic Personal Amount income tax exemption and raising income tax thresholds will give $1399 back to those who earn over $100,000 per year while giving $470 to those earning under $30,000. 

Increasing the education property tax rebate to 50% is projected to cost $453 million in 2023. The education property tax rebate has disproportionately benefited wealthy property owners, delivering large cheques to corporate landowners such as Cadillac-Fairview. At the same time, the budget does not put forward a plan to make up the education revenue lost through the education property tax rebate. Further reductions in income tax raise further questions about the future of education funding. 

Large tax cuts in 2023/24 come on the back of a $1.04 billion increase in federal transfer payments, including increases to equalization payments, health and social transfers. “It seems the Province is using large federal transfer payments to cover the cost of its tax cut agenda. This is money that should be used to repair our healthcare system at a moment when we are sending patients out of province for elective surgeries” says Niall Harney, Errol Black Chair in Labour Issues at the Canadian Centre for Policy Alternatives – Manitoba. 

We welcome increases in health funding in budget 2023/24. The $668 million increase is desperately needed across the system. However, budget 2023 delivers just a 7.6% increase in operations funding to health authorities. With health worker contracts still unsettled, and many expiring next year, this offers precious little to expand recruitment and retention of frontline staff. 

The Canadian Centre for Policy Alternatives – Manitoba is an independent, charitable research institute based in Winnipeg.