There used to be a saying that Saskatchewan was the gap between Manitoba and Alberta. These days, Manitoba has the dubious honour of being the gap between Saskatchewan and Ontario. To be sure, Ontario and Saskatchewan have their own high tax issues with a health care premium and school taxes respectively, not to mention rampant spending in both provinces. But Manitoba is falling further behind on almost every front when it comes to competitive taxation.

A recent report from the Canadian Federation of Independent Business (CFIB) has confirmed what the Canadian Taxpayers Federation (CTF) has been saying for many years now. Simply put, Manitoba is not competitive.

Saskatchewan has outpaced Manitoba on most economic indicators. With respect to personal income taxes, Manitoba slightly edges out Saskatchewan on the low tax rate at 10.9 percent compared to 11 percent. But where there is such a dramatic difference is in the middle and high rates. Income earners in our province start paying 13 percent (of the federal rate) up to $65,000 of income, our neighbour to the west has the same rate but there can earn $110,000 before the next highest rate kicks in - fully $45,000 more! At the top end of the tax scale, Manitoba's rate sits at 17.4 percent, while Saskatchewan's is 15 percent.

Although Manitoba's rates have come down slightly, the CFIB's report points to an even more significant reduction in Saskatchewan where a two-income family earning $60,000 a year paid $280 less in personal income taxes between 2001 and 2007.

As for the basic personal exemption (BPE), the amount of money one can earn before they start paying tax, Saskatchewan edges out Manitoba, again. There is a $944 or 12 percent gap in the BPE between the two provinces. Further, Saskatchewan has indexed their tax brackets to the rate of inflation, where Manitoba has not. Since bracket creep is alive and well in our province, the small income tax reductions have been eroded to the tune of $100 million since 1999. Those are dollars going into government coffers, not into the pockets of hard working Manitobans.

There are, as our finance minister will point out, a couple of areas where our prairie neighbour doesn't measure up. On gas tax and school taxes Manitoba has an edge, but it really ends there.

Saskatchewan's sales tax is a full two points lower than ours, giving consumers more purchasing power, and with the federal government's recent announcement to further reduce the GST, Manitoba is an even less attractive place to purchase goods.

The story on business taxes is not much better either. The small business tax threshold in Saskatchewan has gone as high as $500,000, at the CTF's urging, compared to $400,000 here. Manitoba also tacks on an additional insidious little payroll tax, further hurting the business climate.

When all is said and done, the economic picture is grim for Manitoba. But with some political will and long-term thinking, our province can strive to fill in that gap.