Finance Minister Cameron Friesen boasted Monday he’s delivered Manitobans the biggest tax cut in the province’s history.
The claim comes after two years of the Tories blaming the former NDP government for uncontrolled overspending, which left the province with crippling debt and a huge deficit.
The reduction comes largely from increasing the basic personal income tax exemption over the next two years, saving taxpayers $19 million this budget year, and an anticipated $149.3 million in future tax years.
Friesen said in an interview Monday's tax cuts surpass the NDP's reductions of $111 million in 2000 and $120 million in 2007.
'A total tax break of $2,020 by 2020 — it's the largest tax cut in Manitoba history. It takes money off the cabinet table and puts it back on the kitchen table in every home in Manitoba'— Manitoba Finance Minister Cameron Friesen
"The basic personal exemption (increases) are truly historic — this is huge," Friesen said. "It's the most profound ever."
Beginning Jan. 1, 2019, the basic personal exemption in Manitoba will rise by $1,010 to $10,392. That will mean $109 more in each taxpayer’s pocket. The exemption will increase by a further $1,010 to $11,402 for the 2020 tax year, adding an additional $109 in savings.
"Budget 2018 delivers even more tax relief for Manitobans," Friesen told the legislature Monday. "A total tax break of $2,020 by 2020 — it’s the largest tax cut in Manitoba history. It takes money off the cabinet table and puts it back on the kitchen table in every home in Manitoba."
Friesen said the changes in basic personal exemptions will remove 30,000 Manitobans from the tax rolls over the next two years.
Officials said the carbon tax that kicks in Sept. 1 will cover all the tax savings and leave almost $100 million in the kitty over a full year to pay for other upcoming tax savings — including the long-touted election promise to reduce the provincial sales tax to seven per cent from eight per cent in 2020, which happens to be the year of the next provincial election.
Friesen said he could have taken all the carbon tax revenue and applied it to the deficit, but "Manitobans deserve a break."
The Tories are also providing a tax break to small businesses. On Jan. 1, 2019, the province will alter the small-business tax reduction to $500,000, from $450,000.
That would save $1.8 million in the fiscal year starting April 1, 2018, and $7 million over a full year, Friesen said. "This will save individual businesses up to $6,000 a year, money they can invest in new jobs or technology."
The finance minister praised small business as the backbone of Manitoba’s economy. "While the federal government seems to see small business as a problem, we see Manitoba’s small businesses as the solution," he said.
Meanwhile, Manitoba increased the farmland school tax rebate $3.4 million.
Only two taxes go up significantly: tobacco goes up $7 million over a full year, and phasing out the credit unions' special deduction saves the province $800,000 in this budget and $15 million over a full year.
There’s a handful of small tax reductions that put money back in the pockets of people in specific areas, officials said.
Private firms that create daycare spaces would qualify for up to $10,000 in tax credits over five years. There’s an additional $1.5-million exemption for businesses from retail sales tax.
For individuals, there are slight improvements via cutting red tape for personal caregivers and education property tax credits.
The Manitoba book-publishing and cultural industries tax credits have been extended.
Friesen renewed the $16-million film production tax credit, saying it is valuable for Manitoba jobs. The province will also create an industry working group to help government improve the credit, he said.
Nick Martin is the bearded guy we keep hidden away at the back of the newsroom. He is now in his fourth decade working in daily newspapers.
Updated on Monday, March 12, 2018 at 7:47 PM CDT: Final edit