Manitobans drowning in taxes, PCs say

Manitoba retirees and small businesses are getting “pinched” by bigger property tax bills after the NDP government vowed most Manitobans would pay less, the Tories say.

Examples of seniors on fixed incomes and businesses taking a hit were tabled by the Progressive Conservatives in the legislature this week.

A pensioner, 79, who’s lived in the same house for 53 years with his wife, saw their property tax bill increase by 54 per cent to $1,359 from $880, while their pension benefits increased by three per cent.

“We have paid all our taxes and been good citizens over our lifetimes,” the senior, whose name was redacted, wrote in an email Tuesday to Premier Wab Kinew, PC Leader Obby Khan and others. “Is it too much to ask that we be able to remain in the familiar surroundings of our homes? … It is much less costly to the government than trying to fit us all into personal care homes.”

The property tax bill of a business shared by the PCs showed a $4,650 increase to the education portion, totalling $13,250 this year compared to $8,600 last year.

“We’ve heard from dozens of small businesses that also experienced the pinch under this NDP government,” Khan told reporters. “We are talking about real Manitobans.”

The NDP introduced a $1,500 Homeowners Affordability Tax Credit this year, replacing a 50 per cent residential and 10 per cent commercial property tax rebate in 2024.

“This new policy, where everyone gets the same rebate, is much fairer and increases benefits for low- and middle-income homeowners who most need the help,” said University of Manitoba economics associate Prof. Jesse Hajer.

The professor said the old system was a poor use of public funds as it gave the largest rebates to “some of the wealthiest Manitoba residents and corporations.” He pointed to research by the Parliamentary Budget Office that showed higher-income earners are better off despite recent high inflation because their incomes have increased more than enough to compensate. Lower- and middle-class households, it said, are worse off.

Many seniors on a fixed income in higher-value homes have made significant gains in their net worth with rising house prices, Hajer said.

Lower-income seniors receive an additional income-tested tax credit on top of the $1,500 homeowners tax credit, he noted.

“The reality is that we need tax revenue to pay for schools, hospitals, roads and other public services. Taxing high-value homes is a reasonable way to get it,” Hajer said.

Small business owners are feeling the loss of last year’s 50 per cent residential and 10 per cent commercial education tax rebate in addition to increases in property assessments and school division mill rates, said a spokeswoman for the Canadian Federation for Independent Business.

“In last year’s budget, the province replaced these rebates with a flat $1,500 property tax credit for residential properties, leaving commercial properties with no support,” Brianna Solberg said.

Nearly 45 per cent of CFIB members surveyed last year approved of the change, compared to 38 per cent who opposed it — likely because of immediate relief they expected to receive on their residential tax bills, Solberg said. When the bills arrived, there was no relief thanks to higher property assessments and school taxes.

“Without any relief on their commercial tax bills, many business owners are now questioning whether anyone is better off under this new tax-credit system,” she said.

Finance Minister Adrien Sala said the province has taken steps to help small businesses, including a payroll tax cut, a $10 million security rebate program, reducing personal income taxes, and income tax bracket changes “that are saving Manitobans money all across the board.”

Kinew said the homeowners tax credit “really, really helps the people who need the most help,” including those who own smaller homes and people in rural communities. “A lot of those folks aren’t going to be paying any education taxes at all.”

It’s a course correction from the “radical changes” introduced in 2022 when the PCs slashed provincial property taxes, said Molly McCracken with the Canadian Centre for Policy Alternatives.

“The cuts were regressive as wealthier homeowners saved more on their taxes, creating a deficit of revenue for the province,” she said. “Property taxes are a reliable and needed source of funding for the public services we all rely upon.

“The Manitoba government has taken steps to make these taxes more progressive.”

carol.sanders@freepress.mb.ca