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Manitoba budget hikes taxes, user fees to fight $1-billion deficit

Manitoba Finance Minister Stan Struthers talks to media about the 2012-2013 budget at the Manitoba Legislature in Winnipeg, Tuesday, April 17, 2012.

JOHN WOODS/The Canadian Press/JOHN WOODS/The Canadian Press

Manitobans will pay more for gas, cigarettes and spa treatments as the NDP government struggles to slay a $1-billion deficit by hiking taxes and user fees.

In its budget tabled Tuesday, the province is boosting fees for land titles, birth, marriage and death certificates to bring in an extra $7-million. Gas taxes are going up 2.5 cents a litre while smokers will pay 63 cents more per pack. Money raised through the gas tax, which has been frozen for almost two decades, will go directly to fixing the province's roads and bridges.

The NDP is also expanding the seven per cent provincial sales tax to include some forms of insurance and cosmetic services such as pedicures, manicures, haircuts, tattoos and piercings.

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The province is also pledging to loosen its strict 12 p.m. to 6 p.m. Sunday shopping hours — the most stringent in the country, according to the government. The plan is to start consultations with the aim of having new hours in place by Boxing Day.

Hidden in budget papers, the government said it is hoping to raise $75-million through the unspecified sale of provincial assets, which could include some government buildings.

"These are uncertain times," said Finance Minister Stan Struthers. "The effects of last year's flood are still being felt. There is upheaval in the global economy and the federal government has made our work harder by freezing transfers and cutting jobs here in Manitoba."

The government will take $56-million out of its rainy-day fund but will still run a projected deficit of $460-million in 2012-13. Despite modest projected revenue growth, Mr. Struthers is forecasting the province will go from its $1-billion deficit this current fiscal year to a $23-million surplus in 2014 as it promised in last fall's election.

"We will meet this target and we will do so without reckless cuts to core services."

The province is trying to rein in spending by merging 11 regional health authorities into five, which Struthers said will eliminate about 35 executive positions. Manitoba is also freezing or cutting the budgets in 10 of its smaller departments such as Aboriginal Affairs, Conservation and Family Services.

Manitoba will also merging the liquor commission with the lotteries corporation as it reduces government agencies. Mr. Struthers said the NDP will slice the cost of government by cutting travel costs, deferring wage increases and slashing office expenses for legislative assembly members.

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"These are bold, responsible and modern ways to reduce the cost of government," Mr. Struthers said. "Manitobans need to know that we're getting our own house in order at the same time as we understand what we're up against."

While some called for the government to play hardball with public-sector unions and conduct a thorough review of provincial programs, Mr. Struthers said the NDP is determined to bring the province back into the black through a delicate balance of administrative cuts and strategic spending increases.

Expanding Sunday shopping hours will boost the economy by helping businesses compete against the growing popularity of online shopping and changes to cross-border shopping restrictions, Mr. Struthers suggested.

"The times are changing," he said.

But the province's plan to change Sunday shopping hours was already drawing fire. As news leaked out hours before Mr. Struthers tabled the budget, the union representing grocery store workers condemned the move.

Jeff Traeger, president of the United Food and Commercial Workers, said expanding Sunday shopping will mean some workers will be forced to work against their will.

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"I appreciate the desire for the public to want round-the-clock shopping. Those who want it are usually not the ones who have to work it," Mr. Traeger said in a statement.

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