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Education taxes being axed for seniors

Provincial budget to outline $50-million election promise

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No Manitobans aged 65 and over will pay the provincial education portion of property taxes by 2015.

The move will be made official in today's provincial budget and will fulfil a promise made by the NDP during the 2011 election campaign.

But it comes with a price tag. The early estimate is it will take $50 million out of the provincial treasury at a time when the Selinger government wants to reduce the deficit by 2017.

The tax break for home-owning seniors will be phased in starting in 2014, meaning the revenue hit to the province won't be felt immediately. There are more than 180,000 seniors in the province, but it's not known how many live in their own homes.

How the NDP will make up that revenue shortfall is one of the big questions going into budget day, a day that will also see Finance Minister Stan Struthers lay out the early stages of a plan to further flood-proof parts of province that now see damaging spring flooding almost annually. Manitoba, with Monday's snowfall, is now headed into its third major flood in five years. The last flood in 2011 cost an estimated $1.2 billion, although a portion of that was covered by the federal government.

Last year, Struthers -- who worked throughout the weekend putting the final touches on his second budget as finance minister -- raised taxes by adding a number of items such as insurance products and personal services, such as haircuts costing more than $50, under the province's seven per cent retail sales tax. The province recently increased alcohol prices.

"I really hope this evening that tomorrow Manitobans do not find another big lump of coal from this government," Conservative Leader Brian Pallister said Monday at a pre-budget news conference.

Despite the certain revenue pressure caused by pulling seniors off a section of the property-tax rolls, the NDP believes it's a popular move among voters and one it wants to accomplish before Manitobans head back to the polls, likely in the spring of 2016.

"This is one commitment that really affected a lot of families," a government spokesman said.

The selling point to younger Manitobans -- perhaps even a justification for another tax increase -- is that older Manitobans on a fixed income will be able to stay in their own homes longer and be less of a burden on the health-care system, such as by moving into a personal-care home. It also fits into a program announced late last year that sees more house calls from doctors and nurse practitioners for seniors living at home.

Premier Greg Selinger also promised in 2011 to eliminate the education tax on all Manitoba farmland, which would save farmers a collective $14 million a year. The government spokesman said that promise will have to wait as the NDP is not prepared to move on it at this time.

The delay of that promise speaks to the position the province finds itself going into its fifth year in deficit -- a position they've blamed on 2011 flood costs and having to ratchet up infrastructure spending to ward off the recession that began in 2008. The NDP, along with other governments, says it had forecast a more rapid recovery and an earlier date to be back in surplus. The forecasted deficit for 2012-13 is $567 million.

Pallister said that "structural deficit" is more due to the NDP being unable to control its spending on things such as the civil service.

"The government raided the rainy-day fund that they were fortunate to inherit in good times and had an opportunity to prepare for what Mother Nature would throw at us and failed to do so," he said. "So don't blame Mother Nature for the nature of the NDP to spend more than they bring in. They were doing it before that flood and if things don't change tomorrow they're going to continue to do it."

Tuesday's budget and NDP commentary, besides outlining its spending plan for the next fiscal year, is also expected to remind Manitobans that Pallister was a minister in the previous Tory government under then-premier Gary Filmon, a government that presided over cuts to health care and other front-line services, plus the sale of Manitoba Telecom Services, to balance its books following the 1997 flood.

bruce.owen@freepress.mb.ca larry.kusch@freepress.mb.ca

Read it online

The most comprehensive coverage of the Manitoba budget will begin on the Free Press website shortly after 2:30 p.m. today. Our budget team will study the document in a lock-up and, as soon as it's publicly released, will offer in-depth reporting online. Wednesday's paper will offer a special section of reporting and analysis that will explain the budget and how it will affect Manitobans.

Republished from the Winnipeg Free Press print edition April 16, 2013 A7

History

Updated on Tuesday, April 16, 2013 at 8:31 AM CDT: replaces photo

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