Tories promise ’emergency-ready budget’

Payroll tax gets trimmed


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On the eve of the provincial budget, Finance Minister Scott Fielding says he's got a plan to deal with the current uncertain economic times.

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Hey there, time traveller!
This article was published 10/03/2020 (931 days ago), so information in it may no longer be current.

On the eve of the provincial budget, Finance Minister Scott Fielding says he’s got a plan to deal with the current uncertain economic times.

“The budget will be the most emergency-ready budget in Manitoba history,” Fielding declared Tuesday, while announcing a business tax cut.

A stock market downturn, fuelled by plunging oil prices and the potential economic fallout from the coronavirus outbreak, has turned government budget preparations into a bit of a guessing game.

MIKAELA MACKENZIE / WINNIPEG FREE PRESS Finance minister Scott Fielding talks about new tax improvements in advance of the 2020 provincial budget at Fort Richmond Collegiate in Winnipeg on Tuesday.

However, Fielding maintained the Manitoba government has made allowances for the economic uncertainty and built a number of contingencies into its 2020 financial blueprint.

“We are prepared,” he said. “If there’s a downturn (in the economy), we are prepared.”

Premier Brian Pallister likely stole most of Fielding’s budget thunder last week, when he made the surprise announcement Manitoba would lower the provincial sales tax to six per cent, effective July 1. On the same day, the province plans to impose its own carbon tax of $25 a tonne.

The net effect for taxpayers is expected to be a gain of $40 million annually.

On Tuesday, Fielding made a pre-budget tax announcement of his own, revealing government would give employers a break on the Health and Post-secondary Education Tax, commonly referred to as the payroll tax.

As of Jan. 1, 2021, payroll thresholds for companies affected by the tax will go up, benefitting about 1,000 employers in Manitoba and exempting an estimated 220 of them from paying the levy altogether.

Employers with an annual payroll of $1.5 million or less will be exempt (up from the current $1.25-million threshold).

“We think this will help Manitoba businesses grow and prosper,” Fielding said in announcing the measure at a news conference at Fort Richmond Collegiate.

The move is expected to cost the provincial treasury close to $9 million a year.

Scrumming with reporters Tuesday, Pallister indicated there would be specific measures announced in the budget to deal with the economic uncertainty that lies ahead.

“Being able to be resilient in these uncertain times is a really good quality for an individual and it’s a really good quality for a government as well,” he said.

Pallister noted the government has worked hard to strengthen the province’s finances and increased the size of its rainy day fund to $572 million.

He said the budget will include projections for the forthcoming budget year that account for potential declines in economic growth and what they will mean for the government’s bottom line.

Opposition NDP Leader Wab Kinew urged the government to be prepared to act swiftly with programs that keep people working should the current oil shock or the coronavirus threaten to severely damage the economy.

“I think the government should be taking the worst-case scenario options more seriously and should be putting in measures to respond to that,” he said.

Meanwhile, Chuck Davidson, president of the Manitoba Chambers of Commerce, applauded the government for its planned changes to the payroll tax.

“It’s awesome,” he said, noting the move caught him by surprise.

Business has long called for the tax to be phased out and eventually eliminated.

Jamie Kozak, principal architect at Prairie Architects Inc., said increasing the payroll tax threshold will exempt his firm from paying the levy, saving it $5,000 per year.

He said his company could use the tax savings to pay for software licences and new computers. It will also allow it to consider hiring a summer student “knowing that their salary will not cost us an extra 4.3 per cent in payroll tax.”

“This is a significant initiative our office will benefit from,” he added.

Fielding said about 3,000 Manitoba employers pay close to $510 million in payroll taxes each year.

Larry Kusch

Larry Kusch
Legislature reporter

Larry Kusch didn’t know what he wanted to do with his life until he attended a high school newspaper editor’s workshop in Regina in the summer of 1969 and listened to a university student speak glowingly about the journalism program at Carleton University in Ottawa.

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