Analysis

Winnipeg Free Press - PRINT EDITION

'Sheriff' Struthers content to continue robbing from poor

By: Shannon Martin

Posted: 10/29/2012 1:00 AM | Comments: 0

NDP Finance Minister Stan Struthers last week poured cold water on a suggestion put forward by Manitoba's Progressive Conservatives to increase the basic personal exemption by $2,000, thus matching the Canadian average for the amount one can earn before paying taxes.

It's not surprising the NDP rejected the idea. Over the last several budgets they have been steadily migrating from their middle-of-the-road approach to a more left-of-centre fiscal strategy, including ditching balanced-budget legislation, increasing taxes and adding to the debt.

While not surprising, it is definitely disappointing to see Today's NDP resort to tired old rhetoric about tax cuts taking away "money from schools, hospitals and infrastructure."

Disappointing because the BPE is a powerful tool in the government's policy bag for improving the lives of people on low and fixed incomes.

It is far more effective than politically motivated increases to minimum wage that benefit the province as much as those earning it.

The government's own budget papers tell us a $100 increase to the basic exemption will remove 2,000 low-income earners from the tax rolls.

If a $100 increase will remove 2,000, then imagine how many a $2,000 increase would remove.

To give you an idea, in 2008, when Saskatchewan increased its BPE by $4,000, an estimated 92,000 low-income earners were removed from the tax rolls.

We are talking here about the working poor and individuals on fixed incomes, people at the bottom of the income ladder who nevertheless are still required to divert a portion of that limited income to Manitoba's coffers.

In 2001, when the provinces assumed full control of the personal income tax system, Saskatchewan's basic exemption was $8,000 while ours was $7,412, a modest difference of $588 or eight per cent.

Thanks to, or because of, an unwillingness on the part of the NDP to make annual increases to the basic exemption at least at the rate of inflation, by 2012 our BPE had increased to $8,634 while Saskatchewan's had increased to $14,942 -- a difference of $6,308, or 73 per cent.

Perhaps we would not find ourselves in a situation requiring such substantive action if Today's NDP paid more than mere lip service to keeping Manitoba competitive.

It's also worth noting that despite taking almost 100,000 taxpayers off the tax rolls, Saskatchewan has still managed to become a have province and, according to the most recent RBC provincial outlook, will see real GDP growth that leads the country.

The real difference between the government of Saskatchewan's approach to taxation and that of the government of Manitoba is one of attitude, as witnessed in the language used to describe essentially the same announcement.

Saskatchewan said that their exemption increase would "save... taxpayers over $300 million a year."

Here in Manitoba, we are told it will "rob the provincial treasury (of $140 million a year)."

So the same tax policy in Saskatchewan is seen as saving taxpayers money, but in Manitoba, the NDP dismiss it as robbing government.

Taxpayers are inherently distrustful of government, in particular the attitude that "we know best how to spend your money."

When governments start to view reducing the tax burden as robbing their treasuries then they have lost sight of the fact it is our money, not theirs.

Struthers would be well-served to remember that he is the finance minister, not the Sheriff of Nottingham.

If the Manitoba treasury is being robbed, I suspect it is an inside job.

Shannon Martin is a Winnipeg

political commentator.

Republished from the Winnipeg Free Press print edition October 29, 2012 A13

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