Manitoba released its 2019-20 budget on March 7th and CFIB was on-hand to find out what impact it will have on your business. You told us that you wanted tax relief, steps to continue reducing the deficit and return to balanced budgets by no later than 2022, and more work to reduce red tape.
Overall, this budget sends the right signals with much needed relief ahead of schedule by reducing the Provincial Sales Tax (PST) from 8% to 7% beginning on July 1st, 2019. We hope this tax relief will help offset some of the other cost increases your business is facing such as Canada Pension Plan premium hikes and the costly federal carbon tax.
You can read CFIB’s news release, Manitoba small businesses welcome much needed PST reduction ahead of schedule.
2019 Manitoba budget Highlights:
- The Provincial Sales Tax (PST) will lower from 8% to 7% beginning on July 1st, 2019. This equates to $325 million in savings annually ($237 million to Manitobans in the 2019 fiscal year);
- Manitoba’s PST will be the 3rd lowest among all provinces and the lowest rate east of Saskatchewan;
- Personal income tax brackets and Basic Personal Exemption amount will continue to be indexed, saving an additional $36 million in 2019-2020.
Getting back to balanced budgets:
- The deficit is projected to decrease to $360 million for 2019-2020 (a decrease of $161 million from the 2018 budget);
- The province is holding spending growth to just 1.2% from their current 2018 budget Q3 report;
- The province is receiving significant increases in federal transfer payments, a significant increase in personal income tax revenues, and is finding savings through efficiencies;
- The province has not outlined a multi-year plan to get back to balanced budgets, but CFIB’s projections estimate that it will return to balanced budgets by the 2022 budget at its current growth rate.
Red tape reduction:
- The government will continue to place a priority on red tape reduction in 2019-2020, but the budget does not to focusing on reducing red tape for small businesses this year.
- The province is investing less than excepted on core infrastructure projects such as roads and bridges;
- The province has not outlined its plan to raise the Basic Personal Exemption amount by $2000, as previously committed.
Raising your priorities:
To raise your priorities for the 2019-2020 Manitoba budget, CFIB met with Finance Minister Scott Fielding; Wab Kinew, Leader of the Opposition; Dougald Lamont, Leader of the Manitoba Liberal Party; and Reg Helwer, Legislative Assistant to the Minister of Finance.
Small Business Priorities for the 2018-19 Provincial Budget:
Priority #1 – Deliver tax relief (without a carbon tax)
Short-term (before 2020):
- Reduce the PST and expand the exemption base
- Increase the BPE by $2,020 and keep personal income tax brackets indexed
- Raise the Manitoba payroll tax exemption and index it to inflation
- Eliminate the $5,000 cap on the Farmland School Tax Rebate program and review school taxes on farmland (and other small businesses)
Long-term (before 2024):
- Implement a long-term plan to phase out the Health and Post-Secondary Education Tax Levy (the Payroll Tax)
- Develop a long-term plan to eliminate the ESL for commercial properties and adjust portioning regulations on school property taxes
Priority #2 – Boldly getting back to balance:
Balance the budget by no later than 2022, without further tax increases:
- Limit short-term spending growth to less than current projections (2%)
- Outline and publically release a multi-year plan to return to balanced budgets
- Limit long-term spending increases to inflation and population growth after the budget is balanced
Reduce government program costs to return to sustainable spending by:
- Significantly reducing the size/cost of the provincial civil service (CCs included)
- Eliminate redundancy and excess staff through attrition
- Continue to narrow wage disparity (19.5%) between public and private sector workers
- Eliminate work week hours gap between public and private sector workers
- Move new hires from a defined benefit to defined contribution pension plan
- Implementing Fiscal Performance Reviews in future years
Priority #3 – Continue reducing red tape:
Continue ongoing efforts to reduce red tape:
- Renew and expand the Red Tape Reduction Task Force
- Continue to bring forward annual red tape reductions through a legislative vehicle with a focus on reducing red tape for small businesses
- Improve communications of requirements and changes with business owners
- Reduce red tape within WCB and Workplace Safety and Health
- Proceed with The Red Tape Reduction Day Act
- Introduce a Taxpayer Fairness and Service Code
- Share red tape tools and experience with municipalities
Join the Fight!
Manitoba’s businesses still tax relief, and the provincial government still needs to deliver on its commitment to increase the Basic Personal Exception (BPE) amount by $2,000. Help us push for more tax relief by signing our Action Alert: Progress made; more work needed!