CTF Meets Finance Minister to Present 2002/03 Pre-Budget Recommendations

Prebudget Submission

WINNIPEG: The Canadian Taxpayers Federation will meet with Finance Minister Greg Selinger this morning to present the CTF's findings and recommendations for the 2002/03 Manitoba Budget.

The theme of this year's pre-budget submission is "playing catch-up with Saskatchewan," a province similar to Manitoba in many respects but unique in terms of the more competitive income tax rates posted last year. The CTF is also pressing the province to follow Saskatchewan's lead and announce the elimination of bracket creep by fully indexing tax brackets and credits to inflation.

"Keeping up with the Jones's, in this case Saskatchewan, is not a petty rivalry but a necessary first step to develop competitive taxes in Manitoba," said Victor Vrsnik, CTF provincial director. "Otherwise, a hostile business environment will miss out on new investment opportunities and jobs, or worse, precipitate the threat of other business relocations like the MCI case."

The CTF will caution the Finance Minister not to cave into MCI's request for a bailout so as not to set the precedent of failing businesses lining up for handouts.

Driven by the results last year's CTF membership survey results, the pre-budget submission finds that low confidence in provincial tax rates to spur business development has inspired members to press for income tax relief first, followed by gasoline tax, PST and education tax cuts, in that order.

The CTF will press for property tax reform by calling for the elimination of the provincial education support levy.

CTF Pre-Budget 2002/03 Recommendations:

Income tax Relief

• Like Saskatchewan, eliminate bracket creep and fully index tax brackets and credits to inflation.
• Set 2002 individual income tax rates that surpass those in Saskatchewan. The middle rate should fall from 15.4% to 12.5% and the top rate should fall from 17.4% to 14.5%.
• Set the 2002 basic personal exemption and spousal deduction to at least Saskatchewan's level of $8,000.

Spending Restraint

• Freeze overall government spending with the possible exception of health care spending. Increases to health care spending should be funded by a redirection of existing budget envelopes.
• Phase out business subsidy programs and cut departmental funding by an equal amount.
• Do not raid the reserves of publicly owned utilities.
• Introduce competition, privatization and alternative service delivery to government departments and agencies.

Property Taxes

• Eliminate or phase out the provincial education support levy.
• Eliminate or phase out the $37 million of school division taxes levied on farmland.
• Conduct a comprehensive review of the school tax system to explore alternative education funding mechanisms.
• To control rising expenditures and tax increases, extend the Manitoba Taxpayer Protection Act to municipal governments and school boards.
• Do not grant municipalities new taxing powers such as a hotel tax, a gas tax levy, a sales tax or an income tax.

Balanced Budget:

• Balance expenditures with revenues and continue to pay down the debt in accordance with the debt repayment schedule.
• Do not introduce amendments that would in any way weaken or water down the impact and intent of the Taxpayer Protection Act.