Manitoba's Action Strategy for Economic Growth
Affordable Government
A fair, balanced and responsible approach to government finances is critical
to keeping the economy on a solid footing, and for the long-term well-being
of Manitoba families and communities.
The Manitoba government remains committed to making strategic investments in public priorities, such as health care, education, clean water and roads, while making sustainable tax reductions and paying down debt, all within a balanced budget framework. For Budget 2007, as recommended by the Auditor General, Manitoba moved to full summary budgeting, which is a comprehensive reporting on all government and government-controlled entities. Budget 2007 was the first Manitoba budget to fully reflect Generally Accepted Accounting Principles (GAAP).
Manitoba’s fiscal approach has earned four credit rating upgrades since
1999, debt burden as measured by net debt to GDP ratio has been reduced,
and Manitoba has implemented a sensible plan to address its accumulated
pension liability.
Since 1999, Manitoba has met or exceeded every tax reduction commitment it has made. Taxes are more affordable for families and property owners as a result of measures such as:
- eliminating the Residential Education Support Levy, saving Manitobans $100 million annually;
- reducing education taxes on farmland by 65%, providing savings of $29 million in 2007, and working toward an 80% reduction;
- increasing the basic Education Property Tax Credit to $525;
- reducing the middle income tax rate by one-fifth to 13%;
- increasing the personal exemption level by $1,240, removing thousands of low-income earners from the tax rolls.
Manitoba business has also benefited from measures to make their taxes
more competitive, including:
- reducing the small business tax rate from second highest in Canada (8% in 1999) to the lowest in 2007 (3%, tied with Alberta), and then to 2% in 2008;
- doubling the small business tax threshold so more taxable corporations now benefit from the small business tax rate;
- reducing the corporation income tax rate from 17% to 14% in 2007 and to 13% on July 1, 2008 – a 24% reduction unprecedented in Manitoba history;
- phasing out the Corporation Capital Tax: the CCT deduction has already been doubled from $5 million to $10 million, reducing the number of firms paying this tax by 19%; and
- raising the payroll threshold for the Health and Post-Secondary Education Tax Levy to $1.25 million, benefiting one-third of the employers which paid the tax in 2006.
Tax changes introduced since 1999 provide significant tax relief for families
and business, delivered within a fiscally responsible framework. Manitoba
is committed to build on this record, providing steady, responsible tax relief
for all taxpayers, combined with targeted incentives to encourage economic
development, youth retention, environmental protection and support for
low-income families.
