Province promised simpler property tax relief, delivered horrible mess

The rollout of the province’s new education property tax credit has been nothing short of a disaster.

What the NDP government pitched as a relief measure for homeowners has instead become a bureaucratic nightmare, leaving many Manitobans without the financial assistance they were promised.

During the 2023 provincial election, the NDP campaigned on maintaining the 50 per cent education property tax rebate brought in by the previous Progressive Conservative government. The NDP pledged to “take the politics out of it” by applying the rebate directly to municipal property tax bills.

However, in its 2024 budget, the government broke that promise and instead introduced a tax credit of up to $1,500. The Kinew government justified it on the grounds that the previous system was overly complex and disproportionately benefited homeowners with higher-value properties.

It sounded reasonable on paper, but the implementation of the new credit has been a hot mess for many homeowners.

For starters, the flat $1,500 credit does not automatically adjust for inflation or increases in property assessments. That means homeowners in areas with rising property values and school division mill rates could be paying more in school taxes without receiving additional relief.

A property owner in the Louis Riel School Division, for example, with a home assessed at $371,100, will pay $316 more in school taxes this year.

One of the most glaring issues with the new credit — which was just revealed by the province this week — is a requirement that, to receive the credit, homeowners in Winnipeg and Brandon must register their properties as their principal residence.

If that step is overlooked, homeowners are left out of the credit entirely. It’s a stipulation few, if any, knew about until now. And it’s proven to be a significant barrier, particularly for new homeowners who may not be aware of the need to register, or for those who have recently moved.

The province’s explanation (or excuse) is a cop-out. It shifts the blame onto individuals, rather than acknowledging the government’s failure to adequately communicate the new rule. The NDP had ample opportunity to inform the public about the registration process but failed to do so, leaving many residents in the dark.

Initially, those who didn’t register their property with their municipality were told they could claim it on their income taxes next year. That’s cold comfort for those who need the money now, not next year. Besides, that’s not what the NDP promised voters in 2023.

But then on Wednesday, the province changed its mind. A provincial spokesperson told media the government has now directed the City of Winnipeg to let the money flow sooner. It’s a rat’s nest that was entirely avoidable.

The transition from a rebate system to a tax credit was anything but seamless. Many homeowners reported receiving less financial relief than expected. It has led to confusion and frustration among residents, many of whom feel they were not adequately informed or prepared for the changes.

Moreover, the government’s decision to phase out the previous rebate system without a clear and effective replacement has left many Manitobans questioning the fairness and transparency of the new policy. While the NDP argued that the new system would provide more targeted relief, the reality has been a patchwork of outcomes, with some homeowners benefiting and others being left behind.

The impact of these changes is particularly harsh for seniors and fixed-income individuals who have lived in their homes for decades. Many of those residents are now seeing their property values and education taxes soar, leading to increased financial strain.

The timing couldn’t be worse. Many low-income homeowners are already struggling with affordability issues, as inflation in some sectors continues to rise, particularly at the grocery store checkout.

The reality is, NDP’s decision to eliminate the rebate system without a clear and effective replacement has left many Manitobans worse off.

Instead of providing relief, it has created an additional burden for many. The NDP has to take responsibility for that and come clean with the public on how many homeowners have been negatively affected by the change, including the number who received no tax credit at all.

It should also launch a comprehensive public information campaign to ensure homeowners know how the new system works and how to access the tax credit if they haven’t received it.

The Kinew government has a lot of work to do to fix the mess it has created. It’s been a botched rollout that has eroded public trust in a government.

tom.brodbeck@freepress.mb.ca