Some simple math to bind post-secondary cuts By: Tom Brodbeck Posted: 7:00 PM CDT Thursday, May. 14, 2020

Hey there, time traveller!
This article was published 14/05/2020 (1991 days ago), so information in it may no longer be current.

There’s an easy way for Manitoba to avoid reductions at post-secondary institutions and other government-funded agencies during the COVID-19 pandemic: postpone more than $100 million of planned tax and fee cuts this year.

The University of Manitoba, University of Winnipeg and Red River College are facing a combined funding cut of $23.6 million, resulting in layoffs and service reductions. It’s a tough — and entirely unnecessary — blow to the three Winnipeg-based centres of learning, which are still operating at full capacity and grappling with new technology costs to deliver online courses to students.

Premier Brian Pallister claims the cuts are necessary to redirect tax dollars to the front lines of health care to fight the novel coronavirus pandemic. However, he’s also going ahead with a slew of tax and fee cuts which will do little to help those who need the most support right now.

I’m all for tax cuts during good economic times, especially in a province that has some of the highest rates in the country. But cutting taxes during an economic crisis, when the province will have to borrow record amounts to replace billions in lost revenue, defies common sense.

To avoid cuts to universities and colleges, the Pallister government could start by postponing a plan to remove the provincial sales tax from property insurance premiums, scheduled for July 1.

The plan, worth $75 million on annual basis, wasn’t even in the 2020 budget. It was a 2019 Tory election promise that wasn’t supposed to come into effect until 2021, at the earliest.

Pallister changed that April 3, moving the tax break up to this year. He said it was part of government’s “support and relief” for Manitoba’s fight against COVID-19.

It’s hard to imagine how removing the PST from property insurance premiums helps Manitobans fight a pandemic.

The province could also postpone a plan to remove the PST from income-tax preparation services, scheduled for Oct. 1. The move will cost the province $5.5 million annually, but will do little to help people and struggling businesses during an economic downturn.

Pallister could also delay the planned removal of probate fees on the estates of deceased persons. The current probate fee is $70 on the first $10,000 value of an estate, and $7 per $1,000 thereafter. The Tories, who plan to remove the fee July 1, say Manitoba will be the first province in Western Canada to do so. The move is expected to cost the public treasury $7.8 million a year.

Finally, we’d all like to pay less to register our vehicles, but is now really the time to cut those fees?

One of Pallister’s weaknesses as a leader is an inability to set aside ideology in favour of pragmatism during a crisis.

The Pallister government announced in its 2020 budget a 10 per cent cut to vehicle registration fees (collected by Manitoba Public Insurance on behalf of the province). That works out to $15/year per vehicle owner. Crown Services Minister Jeff Wharton confirmed the fee cut Tuesday, which will cost the province $15 million annually in lost revenue.

All told, postponing those four tax and fee cuts would provide the province with $103 million in revenue — more than enough to cancel out the hit to colleges and universities, with plenty left over to help struggling businesses and people who have lost their jobs because of the pandemic.

Pallister says he plans to go ahead with the cuts in order to put more money “on the kitchen tables” of Manitobans — a platitude that may have had some legitimacy during good economic times, but not during one of the worst economic downturns since the Great Depression.

One of Pallister’s weaknesses as a leader is an inability to set aside ideology in favour of pragmatism during a crisis.

His ideology served Manitobans well when the province needed a premier four years ago to clean up the financial mess left behind by the former NDP government. Manitoba is better positioned to weather the financial storm brought on by the pandemic as a result of Pallister’s fiscally responsible policies.

Clinging to the idea of tax cuts, however, while slashing funding for important public institutions during a recession, is the opposite of the common sense Pallister claims to possess.

tom.brodbeck@freepress.mb.ca

Tom Brodbeck
Columnist

Tom Brodbeck is an award-winning author and columnist with over 30 years experience in print media. He joined the Free Press in 2019. Born and raised in Montreal, Tom graduated from the University of Manitoba in 1993 with a Bachelor of Arts degree in economics and commerce. Read more about Tom.

Tom provides commentary and analysis on political and related issues at the municipal, provincial and federal level. His columns are built on research and coverage of local events. The Free Press’s editing team reviews Tom’s columns before they are posted online or published in print – part of the Free Press’s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.