• Provincial Sales Tax expanded to professional services
  
• No income tax relief, bracket creep alive and well
  
• Spending to tax cuts ratio 7:1
  
• Provincial debt soaring

WINNIPEG: The Canadian Taxpayers Federation (CTF) reacted to the 2004 provincial budget, tabled in the Manitoba Legislature by Finance Minister Greg Selinger.

"Year after year the NDP government solidifies Manitoba's place as a 'have not' province, and today's budget was more of the same from a tax and spend government," stated CTF provincial director Adrienne Batra. "There is little for Manitobans to celebrate in today's budget as provincial coffers continue to swell." Posting a balanced budget with a slim $3 million surplus, revenues are projected to increase by $268 million in the next fiscal year.

Provincial Sales Tax expanded

As prescribed by the Balanced Budget, Taxpayers Protection & Debt Retirement Act, the government is required to hold a provincial referendum if any major tax is increased, including the Provincial Sales Tax (PST). In budget 2004, the NDP government has not increased the PST, but has expanded it to include professional services. "The NDP is circumventing the spirit of the Act by expanding the PST as opposed to increasing the rate," added Batra. "But when revenue projections are an additional $17.2 million, it adds up to a tax increase."

No income tax cuts, bracket creep continues

"In January of 2004 the middle tax bracket fell from 14.9% to 14%, but there was no additional tax relief announced for Manitobans who continue to pay some of the highest income taxes west of Quebec," said Batra. Most provinces in Canada have indexed their tax brackets to the rate of inflation. "The NDP government refuses to let bracket creep die - you can have as many tax cuts as you want, but until tax brackets are indexed to the rate of inflation, reductions are a moot point."

Overall spending increases

Provincial government spending has risen by $148 million since last year's budget, with the largest increase for health care at five percent. Despite the lack of tax cuts, revenues are expected to increase by $268 million in the next fiscal year. "Manitobans are getting nickeled and dimed to death in this budget to pay for an unsustainable health care system," added Batra. "Driver's license fees increasing by $23, liquor mark ups, cigarette tax increase, diesel tax increase and the expansion of the PST are just a few ways the government is planning on paying for health care in the next year."

The NDP government is also continuing with their plans for a provincially run sandwich factory and laundry facility at a cost of $35 million to taxpayers. "Rather than abandon their plans to usher in a new era of social engineering with state run laundry facilities and sandwich factories, the NDP government is carelessly throwing money into our health care system with little to no thought on focusing on outcomes and reducing waiting times."

Provincial debt soaring

Even though the province did not draw down from the Fiscal Stabilization Fund to balance the books, the province's overall debt has increased by over $2 billion since 1999. "The province's overall debt, including Manitoba Hydro, is climbing at an alarming rate. If the NDP government only makes the minimum debt payment of $96 million as prescribed under the Balanced Budget Act, future taxpayers are going to be left with a colossal debt bill and could potentially lead to higher taxes in the future."

Final thoughts

"Manitobans will be financially worse off after this budget. With little to no long-term economic plan for tax relief and debt retirement, the NDP government continues to spend our money with little regard for the negative effect they are having on Manitobans disposable income," concluded Batra.