Click here for the CTF's 2002 Manitoba Budget Recommendations.

WINNIPEG: The Canadian Taxpayers Federation describes the 2002/03 provincial budget as uninspiring and humdrum for beleaguered Manitoba taxpayers.

"Manitoba's poor ranking in the inter-provincial tax comparisons has not improved one iota since the budget was tabled," said Vrsnik, CTF provincial director.

Brain Drain:
"The budget is fabulous if you happen to live in Alberta," said Vrsnik. "The visionless budget will only inspire more young Manitobans to move west for lower taxes and greater job opportunities. And Alberta will become the main beneficiary of the Manitoba brain drain."

Vrsnik noted that over 3000 net Manitobans relocated in Alberta in 2001, adding that the trend is not likely to reverse after the passage of the 2002 budget where no new tax cuts were announced.

Tax Grabs:
"Another $10 hike to driver registration fees combined with a $45 million tobacco tax grab is at least consistent with Manitoba's reputation as the highest taxed jurisdiction west of Quebec," said Vrsnik. "The tobacco tax grab is just another crutch for the government to support its program spending spikes."

Bracket Creep:
"Manitoba still holds tight to the dubious distinction as one of the last holdout provinces not to announce the death of bracket creep," said Vrsnik.

The other western provinces, Ontario, Quebec and Ottawa have all announced that tax brackets and credits will be automatically indexed to inflation each year. Non-indexed tax brackets erode disposable incomes when inflation pushes one's income into higher taxed brackets.

Vrsnik credits the government for increasing the basic personal exemption and spousal deductions by 3% and for raising the top tax bracket from $61,089 to $65,000.

Education Support Levy:
The CTF supports the initiative to phase out over 5-years the education support levy for residential property owners but would have been more impressed if the timetable was speeded up and that businesses would have been able to enjoy the tax cut as well. Manitoba currently charges the highest property taxes in Western Canada.

Raiding Hydro Reserves:
"Balancing the budget on the backs of Manitoba Hydro rate payers is a sneaky way to comply with the Balanced Budget Law," said Vrsnik. "The $288 million Hydro tax grab should have been used to retire Hydro's $6.3 billion debt, allowing the utility to lower electricity rates even further."

Balanced Budget / Debt Repayment:
The CTF is pleased to see the budget balanced and $96 million transferred to the debt retirement fund.

Spending:
The CTF cautions that the NDP's spending addiction is inconsistent with its ability to pay. "Were it not for a $93 million draw from the rainy day fund, the $75 million take from Manitoba Hydro in 2002, $45 million in new tobacco taxes and $1.5 billion in federal equalization payments, Manitoba would run $1.7 billion deficit in 2002," calculated Vrsnik. "Program spending is unsustainable."

Increased spending on priority programs like Health Care should have been financed through a redirection of low priority programs, such as $40 million in corporate welfare.

Health:
The need for urgent health care reform came into focus with the 2002 budget. Health care spending is up $180 million over what was budgeted last year. Health care spending represents 40% of all provincial expenditures.

"The province should move without delay to enter into partnerships with the private sector for cost-effective health delivery services," said Vrsnik. "The government's role of payer, provider and evaluator has allowed the health system to decay and costs to soar."