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No personal or business tax increases in stay-the-course Manitoba budget

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WINNIPEG - The Manitoba government has tabled a cautious budget that contains no personal or business tax increases for the first time in three years.

Even smokers are getting a rare year off.

The budget caps spending growth, while making small investments in child care, rental assistance and small business.

The 2014-15 fiscal plan contains a few nuggets aimed at wooing the middle-class, including a low-cost loan to help people buy winter tires and $5.5 million to boost child-care spaces.

The governing NDP's popularity has plummeted since it raised the provincial sales tax by one percentage point last year — after promising in the last election campaign not to raise taxes.

Finance Minister Jennifer Howard said the government is trying to live within its means without cutting front-line services.

"We did really challenge ourselves to manage with the revenue that we have," she said. "We're not going to raise fees in a way that compromises affordability."

This year's budget does run a $357-million deficit and pushes net debt up to $18.6 billion, but Howard said the government is still "on track" to balance the books by 2016.

The New Democrats used the budget to once again accuse the federal government of short-changing the province. Manitoba says it is losing out on $100 million in federal funding because the province's population has been under-estimated by Statistics Canada.

The lack of growth in major federal transfers is "an ongoing and increasing challenge for the province," said the budget papers. This has meant the province has had to delay the elimination of school taxes for seniors and push deficit projections higher, Howard said.

The NDP is promising to cap government spending growth at two per cent, while freezing or cutting the budgets of nine government departments.

"That isn't about providing people with less services. We aren't asking Manitobans to do with less," Howard said. "We want them to have excellent services, but we need to get more efficient at providing those services."

Progressive Conservative Leader Brian Pallister said the NDP has a long way to go and a lot more belt-tightening to do.

"They've overspent every single year. It's a giant hole that the NDP has dug for our province and for our future," the Opposition leader said. "They've had a decade-and-a-half. This is an old government. It's a tired government and it's one that has always failed to get its spending under control."

Colin Craig with the Canadian Taxpayers Federation said the government missed an opportunity to cut some "low-hanging fruit" such as civil service pensions and a growing number of cabinet ministers.

"They need to start making those kinds of tough choices," he said.

But there was also praise for the government's targeted investments that some said will make a real difference in the lives of working parents and the poor. While the budget freezes personal tax exemptions at around $9,100, it increases the rental benefit for people on social assistance, which allows them to keep more of their money if they enter the workforce.

David Northcott, executive director of Winnipeg Harvest and vice-chair of the provincial association of food banks, said the move means many won't have to choose between paying their rent or buying food.

"Most moms are eating one meal a day, so that their kids can eat three meals a day and they can pay the rent," Northcott said. "It's an immediate impact ... I'm delighted. I think I'm in love with the minister. I think I have to buy her lunch."

Pat Wege, executive director of the Manitoba Child Care Association, said she was happy to hear Howard talk about creating "thousands" of new child-care spaces at a time when 10,000 families are waiting for care.

"That gets my heart racing because thousands of spaces will make a difference in a way that a couple of hundred probably won't," she said. "Hopefully Manitoba families that are on waiting lists will get some relief from the long wait times for child care in a couple of weeks."

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