The Manitoba NDP government’s first budget provides tax relief for middle and lower-income families and includes many measures that will affect families, consumers and communities.
Middle and lower-class Manitobans are the real beneficiaries of this budget, says Christopher Adams, adjunct professor in political studies at the University of Manitoba. “The budget [reorients] taxes and benefits away from wealthier families… to less wealthy households.”
Previous Progressive Conservative governments cut taxes, which saved taxpayers money but left public institutions with less funding, said Molly McCracken, director of the Manitoba office for the Canadian Centre for Policy Alternatives.
McCracken says the tax cuts “led to this massive deficit” in the province, which hit $2 billion in 2023-24. The deficit is projected to fall to nearly $800 million in 2024-25.
Growing population
Manitoba’s 2024 budget provides tax relief to lower and middle-class families by raising the lowest income tax bracket to $47,000, up from $36,842. It raises the next income bracket from $79,625 to $100,000.
Manitoba’s budget changes the education property tax, which helps fund public education, to benefit owners of lower-value homes. This change reverses the previous Progressive Conservative government’s attempt to gradually eliminate the education property tax over 10 years.
The 2024 budget promises that, beginning in 2025, residential property owners will receive a fixed credit of up to $1,500 to offset property taxes. The credit is being branded as the Homeowners Affordability Tax Credit.
One effect of this credit is to eliminate education property taxes entirely for the approximately 83 per cent of homeowners who have properties valued at less than $437,000. By contrast, the owner of a $850,000 home will see their tax increase by $1,088.
Manitoba’s 2024 budget commits funding to open new child-care centres, create more $10-a-day child-care spaces and increase salaries for early childhood educators.
The province is also investing $30 million in a universal school nutrition program to ensure all school children have access to healthy food. It is unclear how this will interact with the recently announced federal national food program.
Other measures for families include a doubling of the maximum fertility treatment tax credit, from $8,000 to $16,000. Unlike in some provinces, there is no limit to the number of treatments eligible Manitobans can claim.
The province will also cover prescription birth control in a program independent of Ottawa’s recently announced national pharmacare plan.
‘Burden on tenants’
All commercial properties other than farms will stop receiving a school tax rebate under the new budget.
Commercial landlords of properties who do not receive the rebate “are definitely going to put this burden on the tenants to increase their rent,” said Umar Hayat, a real estate agent at Coldwell Banker Preferred Real Estate in Winnipeg.
McCracken disagrees, noting the province sets the amount of allowable annual rent increases. Landlords who wish to exceed the rent increase guideline must receive government approval.
Fuel and EVs
Manitoba will extend the province’s “fuel tax holiday” by extending a suspension of the gas tax until September. The suspension, which began Jan. 1, cuts taxes on gasoline and diesel purchases by $0.14 per litre.
“We’re quite concerned this is $84 million more dollars that will not be brought in by giving this fuel tax cut. And it doesn’t benefit everyone — it only benefits car drivers,” said McCracken.
The province will also give a $4,000 rebate to Manitobans who purchase a new electric vehicle or plug-in hybrid, and $2,500 to those who buy used electric vehicles. Purchases made since August 2023 are eligible for the program.
But the province has few charging stations, and the lack of infrastructure funding could jeopardize the government’s plan to increase sustainable transportation, says McCracken.
‘Correcting social problems’
Manitoba’s 2024 budget allocates $20 million to be “tough on crime and tough on the causes of crime,” reads the budget. Policing and public safety initiatives will see an increase in the 2024 budget of $13.7-million and $6.3-million respectively. The budget also gives families and businesses a $300 rebate on security camera purchases.
Manitoba Premier Wab Kinew said the budget “is more oriented to correcting social problems, which indirectly reduces crime,” said Adams.
The budget also includes more than $11 million for mental health and addiction services, including the province’s first supervised drug consumption site. Manitoba will join Alberta, British Columbia, Saskatchewan, Ontario and Quebec in having at least one such site.
