WINNIPEG – Manitoba’s governing NDP laid out a pre-election plan Tuesday to increase taxes for high-income earners while giving low-income families a small tax break.
The New Democrats said in a non-binding fiscal update that they will create a new tax bracket for incomes over $170,000 if they are re-elected in the April 19 provincial vote.
The 20 per cent tax rate would affect 13,000 people and raise $52 million annually.
“(We’re) simply asking folks at the top to give a little bit more so that families, middle-class and working families can have a little bit more cash in their pockets at a time when we need that stimulus,” Premier Greg Selinger said. “It’s quite modest.”
The tax changes would take effect Jan. 1 and would save a family of four with an income of $60,000 about $260 a year.
The new high-income tax bracket would give Manitoba one of the highest marginal tax rates in the country.
The Alberta government recently increased income tax rates for people earning more than $125,000 a year, while Ontario’s higher tax rates start at $150,000.
Although the proposals aren’t binding, Selinger said it shows the NDP is putting a “down payment” on promises made in its speech from the throne.
“We think it’s an important document,” he said.
The third-quarter update shows Manitoba’s deficit stands at $646 million — up from $421 million the government had forecast. The province’s economic growth has slowed to two per cent from 2.5, and tax revenue has declined by $148 million.
At the same time, the government is spending $57 million more on child welfare and $49 million more on health care.
While the NDP initially promised to balance the books this year, that date has been pushed back repeatedly. The new target is now 2020 to align with the federal government’s plan, Selinger said.
“We’re all committed to a stimulus program right now to reboot the Canadian economy.”
The fiscal update lays the groundwork for an election campaign that could start as early as next Tuesday for a vote on April 19.
Tabling of the update was delayed in the legislature by the Opposition Progressive Conservatives, who submitted numerous petitions and called for an emergency debate on the lack of a full budget.
Finance critic Cameron Friesen said taxpayers are paying $500 million more in new taxes compared with six years ago. Manitoba’s tax system has become so unfair, Friesen said, that the average family pays $3,300 more every year than the same family living in Saskatchewan.
“But even with these record-high revenues, the government cannot balance the books,” he said. “Because of this NDP propensity for over-spending, they are hungry for revenue and therefore the government fails to address the most basic fiscal issues.”
The New Democrats have been in power since 1999, but have been trailing far behind the Conservatives in opinion polls since raising the provincial sales tax in 2013.
Selinger has said the tax increase was needed to pay for infrastructure projects and create jobs. Opposition Leader Brian Pallister has promised he would reduce the sales tax within his first term as premier.
Lone Liberal MLA Jon Gerrard criticized the government for tabling a fiscal update instead of a formal budget.
“The NDP have had more than enough time to produce it,” he said. “In not producing a budget, the NDP are short-changing Manitobans.”