The 2017 Manitoba Budget is in the books for another year and it looks like the provincial government will continue its trend of unsustainable spending, with no clear road map to get back to balanced budgets.
The Canadian Federation of Independent Business (CFIB) surveyed Manitoba small business owners on what they wanted to see in the Budget. Their top priorities included; fixing the province’s fiscal fundamentals, improving tax competitiveness, and continuing to reduce red tape.
While CFIB commends the Manitoba government for taking bold steps to reduce red tape facing all Manitobans, entrepreneurs hoped that the government would have been as bold in tackling the deficit. Instead, what small business owners saw was a giant missed opportunity!
The province’s net debt has nearly doubled over the last decade, and the deficit is projected to be $840 million this year. Not surprisingly, the province’s credit rating was recently downgraded. Fiscal restraint is needed now, not later, so it is disappointing that the Manitoba Government continued its trend of unsustainable spending, while failing to outline a clear road map to get back to balanced budgets.
With 2017-18 expenditures increasing by 3.1%, it will be extremely difficult to balance the budget by 2024, let alone any earlier. The provincial government needs to take significant steps now to bend their cost curve. While freezing public sector wages is a positive first step, it only addresses one part of the problem. Manitoba needs to reduce the size of its government. In fact, 98% of Manitoba entrepreneurs support the government reducing its size through workforce attrition.
Small business owners also understand that lowering taxes will help encourage investment and grow the economy. While pleased there were no tax increases or new taxes introduced, the 2017 Budget did little to improve tax competitiveness.
Last year, the provincial government took a step in the right direction by indexing its personal income tax system to inflation. However, the Health and Post-Secondary Education Tax Levy, commonly known as the payroll tax, is not indexed to inflation and becomes even more unaffordable every year. Manitoba entrepreneurs also asked the government to deliver on its commitment to increase the Small Business Corporate Income Tax Threshold to $500,000. With Nova Scotia’s recent announcement to increase their threshold to $500,000, Manitoba will be the only province left to do so.
Make no mistake; the provincial government has taken many positive steps over the past year to begin improving Manitoba’s small business climate. But the province can no longer continue with its moderate deficit reduction policies, which we all know will not solve the problem. Business owners understand that today’s deficits are tomorrow’s taxes, so we hope Budget 2018 will outline a clear plan to boldly fix the province’s fiscal fundamentals.
Jonathan Alward is the Manitoba director of provincial affairs with the Canadian Federation of Independent Business (CFIB). CFIB advocates on behalf of 4,800 small- and medium-sized businesses on Manitoba and 109,000 members across Canada. Jonathan can be reached at [email protected] or you can follow him on Twitter @cfibMB.
CFIB is Canada’s largest association of small and medium-sized businesses with 109,000 members (4,800 members in Manitoba) across every sector and region.
Republished from MyToba.ca April 15, 2017
Republished from Winnipeg Sun, online edition April 16; print edition section A7, April 17, 2017