Manitoba’s personal tax exemption limit of $8,634 is too low and needs to be raised about $2,000 to match the Canadian average, Manitoba Progressive Conservative leader Brian Pallister said to reporters on Wednesday.
In making his case, Pallister said that Saskatchewan’s basic personal tax exemption is almost $15,000, while Albertans can make more than $17,000 provincial tax-free.
By moving Manitoba’s personal exemption to the national average of $10,617, a single worker could save $200, while a working couple could put $400 back in their wallets.
“We think this is very important, for us to take immediate action to reduce the damage to Manitoba’s economy and to Manitobans of the NDP’s tax hikes last year,” Pallister said.
However, a spokeswoman for Finance Minister Stan Struthers said that Pallister “hasn’t thought this through.”
“His proposal would cut $140 million from the services Manitoba families count on,” Sally Housser, a spokeswoman for the minister wrote in an email to the Brandon Sun.
“That means fewer investments in our schools and our communities.”
Pallister said he sought a balanced approach in proposing the increase in personal tax exemptions, and chose not to ask for the same limit as Saskatchewan.
“It’s a challenge,” Pallister said. “I had a gentleman in Roblin come up to me and said he only had one issue, that being where I stood on moving the provincial border 60 kilometres to the east. People in Westman are particularly feeling the crunch because labour is mobile and folks can move to close proximity to Saskatchewan and some are actually moving. … This measure probably doesn’t move far enough for some, but it recognizes that we have challenges that have to be faced as well.”
Housser added that while Pallister spoke on his desire to make life more affordable for families, he hasn’t ruled out bringing in a harmonized sales tax to the province.
“Bringing in an HST would mean a $400-million hit to families as well as an additional $400-million hit to the budget,” Housser said. “Our government has been very clear, we’re not interested in an HST.”
Pallister said that the increase in the personal tax exemption limits, while providing a modest benefit to lower-income families can easily be offset by the savings incurred by moving a proposed Manitoba Hydro Bipole III line to the east side of the province.
He disputed Housser’s statement that the government is taking a “balanced approach that has reduced the income taxes Manitobans pay,” adding that the tax increases brought forward in the last provincial budget represented the highest tax increase since the NDP government led by Howard Pawley in the 1980s.
“These largest tax grab in a quarter-century took place last spring, and the estimated amounts are $180 million, which are the highest tax increases since Howard Pawley,” Pallister said.
“At least Howard Pawley didn’t lie about it when he did it, and this government did. They promised not to increase taxes and did so weeks later.”
Republished from the Brandon Sun print edition October 25, 2012