Budget ‘could have been better’ for business: Ruston

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This article was published 03/04/2024 (910 days ago), so information in it may no longer be current.

WINNIPEG — The Manitoba government is delivering on promised rebates and tax cuts in its spring budget, while also changing property taxes in a way that will see many homeowners and commercial property owners paying more.

The NDP government’s first budget since last October’s election, released Tuesday, extends the provincial fuel-tax holiday by three months.

The 14-cent-a-litre tax was suspended Jan. 1 and was to be reinstated July 1, but the government is extending the break until the end of September.

Finance Minister Adrien Sala’s budget also fulfils campaign promises to provide free prescription birth control, rebates of up to $4,000 on electric vehicles, $300 rebates on security cameras, and double the tax credit for fertility treatments.

“This is a plan to be able to make good on so many of the promises that we were elected by Manitobans to deliver on,” Premier Wab Kinew said.

But the budget also contains a major reworking of the education tax on properties, which was not spelled out on the election campaign trail. A new flat credit will replace the existing combination of credits and rebates, starting next year.

The change will see people with lower-value homes pay less and those with higher-value homes pay more. Many homeowners are looking at increases of hundreds of dollars.

Commercial property owners are losing their rebates and will not get the tax credit offered to homeowners. Overall, the property tax changes will raise provincial revenues by $148 million annually.

The decision to remove the rebate from commercial properties came as a surprise to Brandon Chamber of Commerce president Lois Ruston, who said the business community in Brandon and the wider province will definitely feel the pinch.

“I think from a business community perspective, it certainly could have been a better budget,” Ruston said.

Many small business owners in Brandon and Manitoba have already been grappling with the repayment of the Canada Emergency Business Account (CEBA) loans, which were due by Jan. 18. For owners who missed that date, outstanding loans were to be converted to three-year-term loans subject to annual interest rates of five per cent.

And earlier this year, the City of Brandon’s 2024 budget increased property taxes in the city by 9.4 per cent.

With the loss of the education tax rebate, the added cost will force at least a few business owners to make some difficult decisions.

“Combined with our increases to municipal tax … there will be implications,” Ruston told the Sun. “It feels like there’s tough tax pressures on all sides, which is never a conducive environment for growth and investment.”

Spruce Woods MLA and education critic Grant Jackson said many businesses have been working years to pay back the federal loans.

“And on top of that, we know the federal government owes over $100 million to Manitoba small businesses for their carbon tax rebates,” Jackson said. “They haven’t seen that money. And now on top of COVID recovery carbon tax rebate that they’re waiting for from (Justin) Trudeau, and you’re going to take away the one small rebate they were getting? I would think that the chambers of commerce would be pretty disappointed in that for our small businesses, because it’s going to hit them where it hurts.”

Brandon West PC MLA Wayne Balcean agreed, saying that in the long term the removal of the rebate will cost home owners and business owners, not help them.

“It’s going to cost,” Balcean said. “In the long term it’s going to cost people, the average homeowners, more year over year. Our plan, when you look at the Progressive Conservative plan to phase out the education tax over time, would have been a greater benefit.”

For municipalities, the provincial budget offered some welcome news in the form of increased provincial funding. Operating funding for municipalities and Northern Affairs Communities will increase by $58.9-million this year, with $51.6-million earmarked for operating grants and $7.3 million for capital grants. According to the budget documents, the province is also investing more than $4 million more “in new, annual and sustainable funding for sport and cultural organizations.”

The budget also includes a change to income taxes that will see people with a net income above $200,000 paying more through a clawback on the basic personal exemption.

The province is adding a tax on vaping products to match an existing federal levy.

Keystone Agriculture Producers praised the Kinew government for retaining the 50 per cent school tax rebate for farm properties.

“We encourage the province to continue working toward the complete removal of the tax on farm properties and that this is taken into account when developing the new provincial education funding model,” KAP general manager Brenna Mahoney said.

The group also lauded the restoration of the rural doctor recruitment fund, $1.5 million to increase apprenticeship training seats and $135,000 to support the implementation of a provincial veterinary strategy.

The budget sets aside money for a supervised consumption site in Winnipeg, which would be the first in the province and would open next year.

There is also $500,000 to start an inquiry into cost overruns at the Winnipeg Police Service headquarters and other money for a review of the previous Progressive Conservative government’s handling of the COVID-19 pandemic.

“We absolutely need to go through a thorough exercise of asking what happened, what worked, what didn’t, (and) what should we do better next time,” Kinew said.

The budget forecasts a deficit of $796 million, down from almost $2 billion last year.

Manitoba has run deficits in every year but two since 2009, and the government’s net debt is forecast to climb this year to $35 billion.

» The Canadian Press with files from Matt Goerzen