Review of Budget 2019

Made-In-Manitoba Climate and Green Plan Budget Paper

The 2018 budget established the Climate and Green Plan Implementation Fund of $40 million that will provide the necessary support to government departments to implement the Made-in-Manitoba Climate and Green Plan. Budget 2019 confirms that this funding level will continue this year.” The government’s Expert Advisory Council (EAC) has set up consultation working groups in several sectors to develop proposals for reducing GHGs as input to the government’s Carbon Savings Account. The work is ongoing and it is not known when actions will be taken. There is also a $102 million Conservation Trust managed by the Wpg. Foundation which will provide $5 million annually to be used for projects related to conserving ecosystems, enhancing natural infrastructure, improving water quality and strengthening flood and drought mitigation and adaptation. It will be administered by the Mb. Habitat & Heritage Corporation. Finally, there is up to $451.7 million over 10 years available from the federal Investing in Canada Infrastructure Plan (ICIP) for green infrastructure.

GPM Commentary: The Province ceded control over the carbon tax to the federal government. The GPM would take back that control by implementing a $50/tonne carbon tax as of 2019 and look seriously at increasing it annually to avoid increases in GHG emissions due to economic and population growth. It would recycle the revenue via (1) an expanded Implementation Fund; (2) a reduction of the bottom tax rate from 10.8 to 9.5 per cent to assist with the implementation of its Guaranteed Incomeand, (3) reduction of employment taxes.

Debt Servicing Costs and Deficit Reduction

The Summary Expenditure statement on page 6 of Budget 2019 shows Debt Servicing costs increasing to $1,088 million in 2019/20, up by $233 million from $855 million in 2015/16. The projected deficit is $360 million, down from $846 million in 2015/16. Yet, the government is giving up $237 million in PST revenues in 2019/20 (9 months) and $325 million in 2020/21.

GPM Commentary: It could largely eliminate the deficit this year and begin reducing the total debt and debt servicing costs in future years by maintaining the PST at 8 per cent.

Poverty Reduction Strategy Budget Paper

“The key target of this strategy is to reduce the number of children living in low income households by 25 per cent by the year 2025 compared to the baseline year of 2015. . . The Manitoba government is committed to working with the federal government to support Canada’s goals of reducing the national poverty rate by 20 per cent by 2020 and by 50 per cent by 2030.

Budget 2019 supports goals integral to Manitoba’s poverty reduction strategy.”

It’s program thrusts are – expanding early learning and child care, reducing the number of children in care, expanding addictions support, modernizing the Criminal Justice System, preventing family violence, supporting community organizations through grant funding, advancing reconciliation, increasing the Basic Personal Amount tax credit, increasing the minimum wage annually by the CPI, continuing with Rent Assist, supporting new home ownership, growing the economy, supporting employment training for EIA recipients and improving literacy and numeracy outcomes among grade school children.

GPM Commentary:

There are a number of things lacking in this strategy. First, it is mostly focused on long-term outcomes via services aimed at increasing employability and earnings. There is nothing wrong with this but it doesn’t put money in the pockets of the poor now. There is no mention of increasing welfare rates, the minimum wage is below what is needed to ensure a poverty line income for the single adult, there are no programs to help the single non-elderly adult who experiences the highest rate and greatest depth of poverty. The reductions in child poverty rates over the last two years have been entirely due to the increased generosity of the federal Child Benefit.

By comparison, a provincial Guaranteed Annual Income financed out of the elimination of many of the existing Non Refundable Tax Credits (Basic, Married, Married Equivalent, Age, Pension Income, Education, Fitness, Child Art and Dividend) the Cost of Living Tax Credit and the Property Tax Credit would allow for the delivery of a GAI to families and adult non-family persons that featured a Guarantee of $7,000 for a one adult family and $9,900 for a two adult family with a claw back rate of 15 per cent. Such a GAI would reduce the overall family poverty rate from 10 per cent in 2015 to 4.4 per cent by 2020, for a 56 per cent reduction. The impact would be felt across all key groups including the single non-elderly person. Among Single parent families, the poverty rate would fall by 73 per cent (26% to 7%).

This plan would be financed out of changes to the current personal income tax system and would leave untouched the revenue available to finance the other measures outlined in the Poverty Strategy.