FRANCAIS

December 22, 2005

Manitobans and Manitoba businesses will receive a $48-million tax break effective Jan. 1, while Manitoba’s minimum wage will be raised in two stages beginning with a 35-cent increase on April 1, 2006, and a 40-cent increase on April 1, 2007, Labour and Immigration Minister Nancy Allan and Finance Minister Greg Selinger announced today.

This two-stage increase will raise Manitoba’s minimum wage from the present $7.25 an hour to $7.60 in 2006 and $8 by 2007, and will be comparable to the neighbouring provinces of Saskatchewan and Ontario whose minimum wages in 2007 will be $7.95 and $8 respectively.

"The two-stage increase of the minimum wage along with the important tax cuts for businesses announced today make it more manageable for an employer to do business while still allowing the government to increase the purchasing power of low-income earners," said Allan. "Our rate will continue to remain in the middle of rates among Canadian jurisdictions."

The province has announced there will be $48 million in additional tax relief in 2006. The general Corporation Income Tax rate that was previously scheduled to be reduced to 14.5 per cent from 15 per cent July 1 will be advanced to take effect Jan. 1. Accelerating the corporate tax cut will double the savings that will go back into Manitoba businesses.

The province will also cut personal income taxes by reducing the middle bracket rate to 13.5 per cent from 14 per cent and will reduce the small business income tax rate to
4.5 per cent from five per cent Jan. 1.

"The personal income tax cut is worth $30 million, the general corporate rate cut is worth $12.5 million and the small business rate cut is worth $5.3 million," said Selinger. "By accelerating our corporate tax cuts, companies will be able to take advantage of the lower rates sooner than previously announced. While other provinces were cancelling or postponing tax reductions, we have kept and exceeded our commitment."

The government is also committed to the following tax reductions during the current mandate:

·         reducing the middle bracket income tax rate further to 13 per cent from
13.5 per cent,

·         reducing the small business tax rate further to four per cent from 4.5 per cent in 2007, and

·         reducing the general business rate further to 14 per cent in 2007.

The most recent increases in Manitoba’s minimum wage were 25 cents an hour each in April 2001, 2002, 2003, 2004 and 2005 bringing the rate to the present $7.25 an hour.

Allan also released the report of the Minimum Wage Board public review. It can be viewed at http://www.gov.mb.ca/labour/standards/.

The board, appointed to advise the minister on the minimum wage, consists of a chair and an equal number of employee and employer representatives. The Minimum Wage Board was tasked with developing minimum wage recommendations for Manitoba.

"The Minimum Wage Board actively sought input from stakeholders and the general public," said Allan. "The board received many submissions from stakeholders and the general public during the consultation process and I would like to thank the board members for their hard work and everyone who took the time to provide us with their input and ideas."

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BACKGROUND INFORMATION

TAX REDUCTIONS SINCE 1999

Minimum wage board recommendations:

·         The board submitted separate recommendations from both the employer and employee representatives, as well as from the chair.

The recommendations made by the chair include:

·         A 40-cent increase for each of the next four years (2006-09). In 2009, the minimum wage would be $8.85.

Recommendations made by the employee representatives include:

·         By April 1, 2009, the minimum wage should reach 60 per cent of the current average weekly wage ($10.05) for Manitoba followed by an automatic adjustment every Jan. 1 to maintain the rate at 60 per cent of the average weekly wage. The proposal is for the increases over the next four years to be made in equal stages (70 cents).

·         Change the provisions contained in the Employment Standard Code Regulation to limit the number of classes of workers currently excluded from receiving minimum wage.

Recommendations made by the employer representatives include:

·         An increase over four years to $8 per hour contingent on the acceptance of their recommendations to maintain the current minimum wage level of $7.25 for those who work less than 24 hours per week and for those workers who receive tips.

Minimum wage rates in other jurisdictions as of Dec. 1 were:

Nunavut, $8.50; Northwest Territories, $8.25; British Columbia, $8; Quebec, $7.60; Ontario, $7.45; Yukon, $7.20; Saskatchewan, $7.05; Alberta, $7; Prince Edward Island, $6.80; Nova Scotia, $6.80; New Brunswick, $6.30; and Newfoundland and Labrador, $6.25. Ontario has already announced that it will raise its minimum wage to $8 in 2007 while Saskatchewan has announced that it will raise its minimum wage to $7.95 in 2007.