Unlike some other provinces, the Manitoba budget does not increase taxes

Manitoba needs to cut spending to slay deficit

By -- Todd MacKay, Prairie Director - Canadian Taxpayers Federation—— Bio and Archives--April 12, 2017

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WINNIPEG, MB: The Canadian Taxpayers Federation (CTF) responded to the 2017 Manitoba budget by calling on the provincial government to cut spending in order to shrink the deficit faster.

“The deficit is projected to get a little smaller and that’s good, but this is very, very slow progress,” said Todd MacKay, Prairie Director for the CTF. “The problem is that spending is still going up and cost-control is always critical for slaying deficits.”

Manitoba is projecting an operational deficit of $840 million for the coming year which is down slightly from $872 million last year. The deficit is shrinking because the government is counting on revenues to rise by 3 per cent this year and next year. Meanwhile the government plans to increase spending by $541 million.

“Spending less money is the way to slay a deficit, but Manitoba is increasing spending by more than half a billion dollars,” said MacKay. “Hopefully more money will come in and that will make it easier to balance the budget, but it’s risky to bet the budget on increasing revenues. Here’s the reality: the government needs to cut spending.”

Manitoba’s deficit is projected to push the province’s net debt to $24.7 billion and the government will pay $991 million to cover the interest on that debt this year. The government states that a one-point interest rate increase would drive up the province’s interest costs by $100 million.

“It’s sad to see almost a billion dollars flow out of province just to cover interest payments,” said MacKay. “That’s money that can’t be used for schools, hospitals or tax relief, and those interest costs are going up every year.”

Unlike some other provinces, the Manitoba budget does not increase taxes.

“Manitoba already has much higher taxes than some of its neighbouring provinces and families here simply can’t afford to pay more,” said MacKay. “The government is doing the right thing by making tough decisions with its own budget rather than hiking taxes and forcing Manitobans to make tough decisions with their family budgets.”

A family in Winnipeg earning $75,000 annually pays $7,474 in provincial taxes while that same family would pay $4,510 in Regina, according to the Saskatchewan budget.

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