NDP Tax Increase Coming?

During the recent municipal election, the Manitoba NDP supported Judy Wasylycia-Leis in her run for Mayor of Winnipeg against Sam Katz. During her campaign, Wasylycia-Leis promised that if she were elected Mayor she would increase property taxes during her first term.

Promising to increase taxes isn’t generally a well received election promise and it probably was part of the reason that Wasylycia-Leis lost the race.

It appears that Premier Greg Selinger and his NDP Caucus, fresh off of the experience of supporting a losing candidate for Winnipeg Mayor, won’t be as public about their plans to raise taxes as Wasylycia-Leis was.

But it is clear from the NDP government’s own financial plans that they are looking to increase taxes on Manitobans if they are re-elected to government next year. Through their own budget documents, the NDP acknowledge that there will not likely be increases in federal transfer payments to Manitoba over then next five years. Transfer payments have increased from Ottawa by record rates over the past decade but economic times have changed dramatically and for the next half decade Manitoba projects no increase in transfer payments.

As well, the NDP 2010 budget documents indicate that own source revenue for the province is expected to remain flat over the next five years. The NDP are therefore projecting that revenue available to the province will not increase over the next five years. And yet, at the same time, the NDP are saying that expenses will increase at least five per cent for the next five years.

The combination of flat revenues and growing expenses means that the deficit has to increase. And yet, remarkably, the NDP government has promised to balance the budget within the next three years!

Obviously, it is not possible for the government to balance the budget over the next three years when revenues are not expected to grow but expenses are. The only way this could happen is if the NDP raises taxes on Manitobans, which is what their candidate for Mayor of Winnipeg promised to do if elected. It appears as if the Manitoba NDP are planning to do the same thing, but they simply are not being as up front about it as Judy Wasylycia-Leis was because they have seen its not a great way to win an election.

But the fact remains that the NDP budget numbers don’t work without planning a significant tax increase on Manitobans. Over the past decade the NDP have increased service fees and expanded the areas that the provincial sales tax (PST) applies to. Raising taxes isn’t something that the NDP is afraid to do. It’s just something that they seem afraid to admit to heading into an election year.