Critics see ‘bad-news’ budget

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This article was published 15/04/2013 (4587 days ago), so information in it may no longer be current.

Recent price increases for beer and liquor are a sign of things to come in the NDP’s new budget, critics say.

That budget will be delivered Tuesday by Finance Minister Stan Struthers and will showcase the government’s spending and revenue projections for the coming year, including how much it expects to see in revenue growth for the Manitoba Liquor Control Commission.

The Progressive Conservatives believe the price hikes on beer and spirits could earn the NDP up to an extra $15 million in revenue in its first year.

“We’re interested to see what does happen on Tuesday if there is something else in there that’s more than they’ve already announced,” Tory MLA and MLCC critic Cliff Cullen said. “It’s probably going to be a bad-news budget for most taxpayers.”

Weeks ago, the MLCC boosted the price of a 12-pack of domestic beer by $2 — almost a 10 per cent increase — and hiked the cost of spirits by $0.622/litre, equalling a 47-cent increase on a 750-millilitre bottle. The markups were in part blamed on supplier increases, but also included the MLCC increasing its own share.

The last time the MLCC increased its markup was in 2010. That year, the cost of a 12-pack went up by $1.25. The price hike saw an eventual 7.2 per cent increase in how much money the liquor commission returned to the provincial treasury in 2011 ($250.5 million from $233.7 million the year before).

“It’s just another way the government can squeeze some more money out of taxpayers,” Canadian Taxpayers Federation spokesman Colin Craig said. “I see this as one of the symptoms of what’s wrong. We’re seeing our alcohol taxes going up, but we’re seeing in some school divisions school taxes rising substantially six to seven per cent. Why is that happening? The answer is the government is spending too much money.”

Before Struthers tables his budget, a legislative standing committee meets tonight to discuss the liquor commission’s most recent annual reports.

Cullen said part of that discussion will include the motivation for the price hikes.

“We’re going to try and drill down and just see exactly what those price increases do mean to Manitobans and the commission,” he said. “They have been very vague in their news releases.”

Government and MLCC spokespersons declined comment.

The NDP isn’t alone among the provinces in hiking booze prices, however.

Saskatchewan Premier Brad Wall’s new budget saw an alcohol-price increase of about three per cent which kicked in April 1 and is expected to generate $10 million in revenue. Nova Scotia also recently hiked its prices on some products by about three per cent. In November, Quebec in its budget told its restaurants to pay an extra 50 cents per litre for wine and liquor, as well as 17 cents more for a litre of beer as part of a budget plan to rake in an additional $33 million in 2012-13.

Unlike other provinces, the recent MLCC booze hikes were done outside of a budget-day announcement.

“Maybe they’re just trying to spread the pain out a little bit,” Cullen said.

Craig added he expects the NDP to continue increasing fees and taxes from those in last year’s budget, when the government included more items under its seven per cent sale tax, including insurance products and services such as haircuts costing more than $50.

“I think people need to look at the root causes of why so many taxes and fees are going up,” Craig said. “The answer lies with spending that is way too high. Before last year’s budget, Manitobans were already paying the highest taxes in Canada and then the government brought in the largest tax increase in 25 years and they did it by stealth means.”

Craig said after the Maritime provinces and Quebec, Manitoba is one of the most heavily taxed provinces.

“This is a sting that a lot of people feel,” he said of the tax load.

The NDP goes into budget day facing a forecast budget deficit of $567 million for the 2012-13 fiscal year.

Struthers admitted late last year the government would have to delay balancing its books until 2016-17, breaking a promise made before the last election to begin running surpluses by 2014-15.

bruce.owen@freepress.mb.ca