View From the Legislature

Changes to taxation, while important, are not always easy to recognize.

Some, like the increase of the provincial sales tax by the former NDP government, are easy to see as it appears on the receipt of almost every purchase that is made. Other changes are more difficult to notice but can be very significant.

On January 1st, our provincial government took another step to keep Manitoba affordable and ensure Manitobans can keep more of the money they earn in their pockets. The personal income tax brackets and the basic personal exemptions were increased to keep up with inflation. Increasing these two measures on which tax is levied every year to keep up with inflation was a commitment our government made during the last election campaign.

These regular adjustments ensure that wage earners do not move into higher tax brackets simply because the brackets are never adjusted. As well, raising the basic personal exemption annually (the amount that you can earn before you begin to pay provincial tax) keeps more people off the tax rolls and allows you to earn more money before starting to pay tax. In addition, the previous two provincial budgets helped to hold the line on taxes and fees in Manitoba. After consecutive years of record tax increases under the previous NDP government, Manitobans and businesses needed to know that stability and predictability were being returned to the finances of our province and our government has been able to achieve this in the first two years of its mandate.

These are important steps to keeping our province affordable and allowing Manitobans to be financially secure. And they are important because very real challenges and cost pressures remain. As an example, it will take many years to clean up the mess that was left by the former government at Manitoba Hydro. The amount of new debt that Hydro is carrying as a result of capital construction of new dams and the Bi-Pole III line will put pressure on Hydro rates for many years to come. And while it is impossible to turn back the clock and correct many of the mistakes that have been made in the past on Hydro and other financial issues, taking reasonable steps forward to keep Manitoba affordable is important. Indexing tax brackets and the basic personal exemption are key steps.

Of course, more needs to be done. Our government committed during the last provincial election to reduce the PST back to 7% before the next election in 2020. As we work to reduce the deficit every year and to keep the growth of spending in check, this important commitment remains a key part of that planning.