Statistical analysis of the Manitoba Government Budget 2023 changes to the Basic Personal Amount (BPA) and income tax brackets find the top 10% are slated to get 26% of the total tax savings, equivalent to an average tax cut of $1,322 for everyone in the top decile in 2024. The average savings of all tax filers will be $502 a person while the average savings for the bottom 20% of tax filers will be $37 a person.
Budget 2023 changes the Basic Personal Amount, the income exempt from provincial tax. In 2023, the Basic Personal Amount in Manitoba is set at $10,855. Budget 2023 raises this to $15,000. Income tax thresholds are shifted in Budget 2023, with the first bracket ending at $47,000 and the highest bracket beginning at $100,000 in 2024.
Using Statistics Canada’s tax modelling software SPSDM 29.0, which considers this change in relation to all tax credits and benefits, a better breakdown of these changes is possible by income. CCPA Economist David Macdonald finds the top 10% of filers (making over $101,274) will avoid on average $1,322 in taxes in 2024. The value of the tax cuts for this group will be $132 million in 2024 or 26% of all benefits, despite only representing 10% of the population. On the other hand, the bottom half of Manitobans (making under $43,000) will receive only 24% of the benefit.
The poorest 20% of Manitobans will receive only 2% of the total benefit because they already have enough tax credits and can’t use more.
“The tax changes announced in Budget 2023 give disproportionate benefits to high-income earners, particularly dual-income households, who have the disposable income to absorb costs of living increases,” says Niall Harney, Senior Economist and Errol Black Chair in Labour Issues. “The Province should be helping low and middle-income households without gifting hundreds of millions of dollars to the richest among us.”
Table 1: Taxes avoided by taxable income (2024)
Source: SPSD/M 29.0 and author’s calculations
Notes: includes the impact of both the Basic Personal Amount and tax bracket changes in 2024 vs the baseline in 2024 of nothing having been changed.