Highlights from the 2018 provincial budget

Hey there, time traveller!
This article was published 12/03/2018 (2769 days ago), so information in it may no longer be current.

The Pallister government is cutting income taxes and small business taxes and effectively using revenues from a federally mandated carbon tax, which kicks in Sept. 1, to pay for them.

“We are keeping the promises we made to Manitobans,” Finance Minister Cameron Friesen said in his budget speech.

“We’re fixing our finances, so that Manitobans will have greater stability. We’re repairing our services, so that Manitobans will have greater security. And we are rebuilding our economy, so that Manitobans will have greater opportunity.”

“Fiscal responsibility” and “keeping our promises” were their buzzwords of Budget 2018.

The province unveiled its 2018-19 fiscal plan Monday, after consulting with close to 35,000 Manitobans through online surveys, community meetings and telephone-in town halls.

There were relatively few new announcements about major projects, other than funding for the construction of five new schools.

Below are 12 things you should know about the new Manitoba budget.

Picking away at the deficit

The slow crawl out of the bog of red ink continues with the summary deficit budgeted to be $521 million by the end of the budget year. The government’s four-year projection puts the deficit at $142 million.

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Provincial deficit and surplus (in millions)

   $1,000

2021-22 summary deficit: $142 million

0

2018 projection

2017 projection

-1,000

2019

2007

2011

2015

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Provincial deficit and surplus (in millions)

$1,000

2021-22 deficit: $142 million

0

Revised 2018 projection

2017-18 summary deficit: $726 million

2017 projection

-1,000

2007

2009

2011

2013

2015

2017

2019

Carbon tax revenue will return to Manitobans’ pockets

Finance Minister Cameron Friesen says the province will refund all carbon tax revenues it collects over the next four years to Manitobans through tax reductions.

The new carbon tax – $25 per tonne on gas, liquid or solid fuel products intended for combustion – won’t kick in until September. Carbon tax legislation will be introduced in the spring legislative session.

“The $25 carbon tax per tonne of emissions is estimated to generate $248 million in net revenue during the first 12 months,” according to the budget.

The carbon tax is expected to add about 5.32 cents per litre to gasoline costs, about 6.71 cents for diesel, about 4.74 cents for natural gas and 3.87 cents for propane.

Read More: Manitobans will get carbon tax back, finance minister promises

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Average price, litre of gas as of March 9: 107.2

77.9 cents

14

10

5.4

5.3

Base

Source: gasbuddy.com (figures rounded)

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Average price of a litre of gas, March 9: 107.2

77.9 cents

14

10

5.4

5.3

Base

Source: gasbuddy.com (figures rounded)

New schools for kids, less funding for universities

The government plans to invest $2.8 billion in education and training, which will help fund five new elementary and high schools in Manitoba – four in Winnipeg and one in Brandon. Those schools will accommodate 3,300 students and have 392 child-care spaces. The move costs more than $100 million. The identified schools are:

• K-8 English – Brandon School Division – Southeast Brandon
• K-8 English – Pembina Trails School Division – Waverley West
• Grade 9-12 English – Pembina Trails School Division – Waverley West
• K-5 French immersion – Seven Oaks School Division – Precinct ‘E’
• K-8 dual track – Winnipeg School Division – Waterford Green

The announcement comes after a year of study by consultant KPMG on whether the province should consider using P3 (private-public) partnerships to build new schools. Ultimately, the government decided to finance the schools using the conventional Public Schools Finance Board approach.

Tenders for the construction of the new schools should be issued by the end of 2018.

Support for post-secondary education, however, was less hefty. The government cut operating grants for universities and colleges by about $5.4 million, while student aid and bursary funding went up by about $2.6 million. This could mean a tuition increase is in store for post-secondary students, as universities and colleges try to re-coup their costs elsewhere.

Heavy reliance on federal transfers

Manitoba is budgeting for the largest equalization payment from Ottawa in a decade, at just over $2 billion for the 2018-19 year.

We can thank a stronger Ontario economy for that.

"Ontario’s fiscal capacity has improved relative to that of the other equalization-receiving provinces, including Manitoba," deputy spokesperson Jocelyn Sweet wrote in an email to the Canadian Press in February.

On the flip side, budgeted revenue decreased from the budgeted amount last year. However, forecasted income tax revenue for last year is lower than what was budgeted.

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Manitoba’s major revenue (in thousands)

Income tax

Other taxes

Federal transfers

Total federal transfers: $4.2 billion

$4,000,000

3,500,000

3,000,000

2013

2015

2017

Note: Includes budgeted figures from previous years

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Manitoba’s major revenue (in thousands)

Income tax

Total federal transfers: $4.2 billion

Other taxes

Federal transfers

$4,000,000

3,500,000

3,000,000

2013

2014

2015

2016

2017

Note: Includes budgeted figures from previous years

Personal income tax decreased

The basic personal amount protected from taxation will increase in 2018 to $9,382 and is projected to increase to 2020 to $11,402.

The government’s revenue is taking a $19-million hit in the 2018-19 budget as a result.

Before the hike, Manitoba had the fourth-lowest basic personal exemption amount in the country.

The premier told Bloomberg last month that taxpayers in the province face a "triple threat" of higher federal small business taxes, rising interest rates and Manitoba Hydro rate hikes. The province needs to ensure taxes are "going in the right direction," Pallister said.

Read more: ‘Largest tax cut in Manitoba history’: Tories on 2018 budget

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Basic personal exemption

$18,690

Alta.

16,065

Sask.

14,278

NWT

13,128

Nunavut

11,635

Canada

11,635

Que.

11,635

Yukon

10,208

B.C.

10,171

Ont.

9,895

N.B.

Man.

8,978

Nfld.

8,481

N.S.

8,320

P.E.I.

2017: $9,271.00

2018: $9,382

2019: $10,392

2020: $11,402

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Basic personal exemption

$18,690

Alta.

16,065

Sask.

14,278

NWT

13,128

Nunavut

11,635

Canada

11,635

Que.

11,635

Yukon

10,208

B.C.

10,171

Ont.

9,895

N.B.

Man.

8,978

Nfld.

2017: $9,271.00

2018: $9,382

2019: $10,392

2020: $11,402

8,481

N.S.

8,320

P.E.I.

Benefits for low-income Manitobans falter

There will be less cash set aside for Employment, Income and Rental Assistance. A funding estimate for 2018-19 is set at around $510.6 million, down nearly $12.8 million from the fiscal year before. The government promised to reduce red tape around the EIA process, “modernizing” it with streamlined, online application forms. The Portable Housing Benefit and Emergency Assistance funds remained the same as projected last year, estimated around $3.6 million.

Related Articles

Dan Lett on four things you need to know about the 2018-19 budget

Manitobans will get carbon tax back, finance minister promises

Finance Minister Cameron Friesen presents the 2018-19 budget

Housing spending up, no provincial strategy revealed yet

Spending on housing went up by about 8.3 per cent to around $115.9 million. The Provincial Housing Strategy is still under wraps, though advocates last week were hoping the government would announce its plan alongside the budget and vow to match federal spending on affordable housing. “The Manitoba Government is encouraged by the federal government’s ongoing engagement in housing and its plans for new initiatives, commencing in 2018/19,” the budget states.

‘Record’ healthcare spending

The government says it’s doling out a “record investment” of $6.2 billion to Manitoba Health, Seniors and Active Living.

Ambulance fees have gone down from $425 to $340 – a 32 per cent decrease since the Pallister government was elected and “keeping on track to reduce to $250 as promised,” according to a provincial news release. Spending on drug programs has gone up slightly. The Home Cancer Drug program received about $14 million, there was about $7.7 million allotted to expand dialysis treatment and about $3.1 million for “rare disease drugs.” Money is set aside to hire 60 new full-time paramedics as well.

Child welfare budget increase

The government is planning to spend $35.3 million more on child protection through Child and Family Services. The estimated operating budget for the department in the 2018-19 fiscal year is about $523 million, up about 7.3 per cent from estimates on the previous fiscal year.

Changes to business taxes

A new business tax credit will incentivize the creation of child-care spaces in the province. The Child Care Centre Development Tax Credit will be “available for private corporations that create new child-care centres for a total benefit of $10,000 per new infant or preschool space created, claimable over five years,” the budget states.

Small and medium-sized businesses luck out as Manitoba changed the deduction limit from $450,000 to $500,000 as of Jan. 1, 2019. Corporations could save up to $6,000 per year with this change, which will make a $7-million difference in the province overall.

Highways spending still going down

Capital spending on highways continues to decrease, dropping to $350 million in 2018-19. “Even if
 we were to choose to make no further capital investment in our highways and bridges,” the budget states, “we
 would still be spending over $450 million annually for years to come, just to pay for the decisions of the past.”

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Capital investment on highways,

adj. for inflation $ (000s)

$1,000

800

600

400

2018-19 capital spending on highways: $350 million

200

0

2018

2012

2014

2016

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Capital investment on highways, adj. for inflation $ (000s)

$1,000

800

600

400

2018-19 capital spending on highways: $350 million

200

0

2012

2013

2014

2015

2016

2017

Spending down in five departments

Expected expenses for five departments are down, with the biggest slash coming to Growth, Enterprise and Trade, which loses 8.5 per cent of its budget from last year, falling to about $78.9 million.

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Operating budget changes from last year

Sport, culture, heritage

3.8%

3

Families

1.8

Justice

1.2

Infrastructure

0.9

Health

0.5

Education

0.3

Finance

  Indigenous and Northern relations

0

                Civil Service Commission

0

Muni. relations

-0.9

Sustain. dev’t

-1.1

Agriculture

-2.3

Exec. council

-2.3

Growth/

enterprise

-8.5

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Operating budget changes from last year

         Sport, culture and

3.8%

  heritage

3

  Families

1.8

Justice

1.2

       Infrastructure

0.9

 Health

0.5

    Education

0.3

  Finance

        Indigenous and

0

            Northern relations

     Civil service

0

       commission

-0.9

             Municipal relations

     Sustainable

-1.1

       Development

-2.3

     Agriculture

-2.3

        Executive council

              Growth, enterprise and

-8.5

  trade

Miscellaneous items

• Despite worries over whether the Manitoba Film and Video Production Tax Credit would be cut, the province kept the credit in the books, allotting about $16 million for the 2018-19 fiscal year.
• The Tobacco Tax rate for fine cut tobacco is going up as of midnight Monday, though costs for cigarettes, cigars and raw leaf tobacco remain the same. The increase is from 28.5 cents per gram to 45 cents per gram.
• Funding was set aside to complete Freedom Road, which will connect Shoal Lake No. 40, and the Waverley Street underpass, as previously announced. There is also money for upgrades to the Portage la Prairie wastewater treatment plant.
• There was no mention of revenue expected from cannabis sales, though $131 million is set aside for spending on cannabis contingency plans.

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margin:0;
}
#g-180312budget-filmtv-Artboard_1 .g-aiPstyle0 {
font-size:12px;
line-height:14px;
color:#000000;
}
#g-180312budget-filmtv-Artboard_1 .g-aiPstyle1 {
font-family:Open Sans,sans-serif;
font-size:15px;
font-weight:300;
color:#000000;
}
.g-aiPtransformed p { white-space: nowrap; }

Total volume of film and TV production in 2016-17 (in millions)

$2,991

B.C.

2,977

Ont.

1,754

Que.

308

Alta.

129

Man.

100

N.S.

41

Nfld

36

Sask.

24

     Territories

15

N.B.

2

P.E.I

Source: Canadian Media Producers Association

#g-180312budget-filmtv-Artboard_2{
position:relative;
overflow:hidden;
width:600px;
}
.g-aiAbs{
position:absolute;
}
.g-aiImg{
display:block;
width:100% !important;
}
#g-180312budget-filmtv-Artboard_2 p{
font-family:nyt-franklin,arial,helvetica,sans-serif;
font-size:13px;
line-height:18px;
margin:0;
}
#g-180312budget-filmtv-Artboard_2 .g-aiPstyle0 {
font-size:12px;
line-height:14px;
color:#000000;
}
#g-180312budget-filmtv-Artboard_2 .g-aiPstyle1 {
font-family:Open Sans,sans-serif;
font-size:15px;
font-weight:300;
color:#000000;
}
.g-aiPtransformed p { white-space: nowrap; }

 

Total volume of film and TV production in 2016-17 (in millions)

$2,991

B.C.

2,977

Ont.

1,754

Que.

308

Alta.

129

Man.

100

N.S.

41

Nfld

36

Sask.

24

     Territories

15

N.B.

2

P.E.I

Source: Canadian Media Producers Association

graeme.bruce@freepress.mb.ca

Jessica.botelho@freepress.mb.ca