In a province with a string of deficits, parties promise more spending, tax cuts

Manitoba legislative building

WINNIPEG — Manitoba's Progressive Conservatives promised Friday to sharply increase tax credits for charitable donations if they are re-elected Oct. 3.

It was the latest in a series of promises involving hundreds of millions of dollars in tax cuts or new spending from the Tories and Opposition New Democrats, who both say they can fulfil their promises while also balancing the budget and putting an end to a long string of deficits.

"Our track record is one where when we've set (budget) targets ... we've usually met those targets or exceeded them," Justice Minister Kelvin Goertzen said Friday in Steinbach, a city southeast of Winnipeg, where he is running for a sixth term.

Goertzen said a re-elected Tory government would increase the provincial income tax rebate on the first $200 given to a registered charity from 10.8 per cent to 20 per cent. The rebate on contribution amounts above $200 would jump to 25 per cent from 17.4 per cent, he added.

Four days into the campaign, the Tories have already promised to eliminate the land transfer tax for first-time homebuyers, let seniors defer municipal property taxes, and cut in half -- gradually, over a four-year period -- the tax rate applied to the lowest-income tax bracket.

The income-tax cut alone would cost the treasury $604 milliona year when it's fully implemented, the Tories said Friday. That is close to the $612 million annual budget for the entire Agriculture department.

The New Democrats have also promised tax cuts, including a temporary pause on the provincial fuel tax, which at 14 cents a litre brings in roughly $340 million a year. The NDP has also promised hundreds of millions of dollars in new spending, including the reopening of three hospital emergency rooms and a recruitment strategy for health professionals.

On Friday, NDP Leader Wab Kinew promised to open four new family medical centres in Winnipeg and one in Brandon. An NDP government would also help existing medical clinics expand to offer a range of medical services including mental-health workers, social workers and pharmacists, he added.

"All of these health experts will be at your fingertips, working together to provide comprehensive care that keeps you healthy," Kinew said.

The NDP has said some of its proposed spending is one-time infrastructure work. It has also said its promises would be paid partly by contingency money -- an amount put aside annually for unexpected costs -- that the Tories included in their spring budget.

The Liberals, who have three legislature seats, have promised $1 billion in new spending, funded in part by tax increases on some income earners and property owners.

The Tories and the NDP have promised to balance the budget within the next term and end a series of deficits that stretch back to 2009, with the exception of a razor-thin $5-million surplus in 2019. The red ink prompted two credit-rating agencies to downgrade Manitoba's rating in 2017.

The province has seen its red ink shrink in the last few years, helped in part by big increases in equalization payments from the federal government.

Equalization jumped this year alone by 19 per cent to $3.5 billion -- a total that has roughly doubled since the Tories took office in 2016. The program is based on a complex formula that calculates each province's ability to raise revenues and gives money to ones with less fiscal capacity.

The amount any province receives can vary widely from year to year, and the federal government reviews the formula every so often.

Goertzen said the Tories will release their fully costed platform before the election next month. He said the tax cuts will stimulate the economy, which will generate more tax revenue and offset some of the revenue lost by the tax cuts.

Goertzen also hinted that the deficit for last year -- last forecast at $193 million -- may be smaller than expected when the final audited numbers come out. That usually occurs near the end of September.

"I think you'll see good news there as well," Goertzen said.

This report by The Canadian Press was first published Sept. 8, 2023.