The Manitoba government has tabled a cautious budget that contains no personal or business tax increases for the first time in three years.
Even smokers are getting a rare year off.
The budget caps spending growth, while making small investments in child care, rental assistance and small business.
The governing NDP’s popularity has plummeted since it raised the provincial sales tax by one percentage point last year – after promising in the last election campaign not to raise taxes.
The 2014-15 fiscal plan contains a few nuggets aimed at wooing the middle class, including a low-cost loan to help people buy winter tires and $5.5-million to boost child-care spaces.
Finance Minister Jennifer Howard said the government is trying to live within its means without cutting front-line services.
“We did really challenge ourselves to manage with the revenue that we have,” she said. “We’re not going to raise fees in a way that compromises affordability.”
This year’s budget does run a $357-million deficit and pushes net debt up by $1.3-billion, but Howard said the government is still “on track” to balance the books by 2016.
The New Democrats used the budget to once again accuse the federal government of short-changing the province. Manitoba says it is losing out on $100-million in federal funding because the province’s population has been underestimated by Statistics Canada.
The lack of growth in major federal transfers is “an ongoing and increasing challenge for the province,” said the budget papers. This has meant the province has had to delay the elimination of school taxes for seniors and push deficit projections higher, Howard said.
The NDP is promising to cap government spending growth at 2 per cent, while freezing or cutting the budgets of nine government departments.
“That isn’t about providing people with less services. We aren’t asking Manitobans to do with less,” Howard said. “We want them to have excellent services, but we need to get more efficient at providing those services.”
The government raised the ire of many last year when it announced it was raising the provincial sales tax to 8 per cent from 7 per cent. Howard reiterated the government’s commitment to spend that new money on a five-year, $5.5-billion plan to fix roads and bridges and boost flood protection.
While the budget freezes personal tax exemptions at around $9,100, it increases the rental benefit for people on social assistance, which allows them to keep more of their money if they enter the workforce.
Premier Greg Selinger is also to tour First Nations communities to look for ways to improve graduation rates and job opportunities. The high-school graduation rate across the province has improved to more than 85 per cent in recent years, but remains much lower on reserves.