• Spending to tax cuts ratio 11:1
• Province raids Hydro for $52 million and Fiscal Stabilization Fund for $48 million
• Middle tax rate falls to 14% - not in effect until Jan. 2004 and still the highest in Western Canada
• No indexation of tax brackets and credits

WINNIPEG: The Canadian Taxpayers Federation (CTF) reacted to Budget 2003-04 today. The Manitoba government delivered the classic tax-and-spend budget the NDP has become well known for. Spending has increased by $348 million (5%) and very little has been done to address the onerous tax burden Manitobans are facing.

"If this is the government's idea of a joke - no one is laughing," stated Provincial Director Adrienne Batra. "Once again the government has missed an opportunity to put Manitoba on the economic road to prosperity. They have lost control of spending and taxpayers are going to be left grabbing the steering wheel. Maybe it is time to change our license plates from Friendly Manitoba to over-taxed Manitoba, " added Batra.

Manitoba Hydro/Fiscal Stabilization Fund (FSF)

The province has raided the piggy bank to the tune of $48 million to balance the budget and leave a thin $10 million surplus, or over taxation. They will also take $52 million from Manitoba Hydro this year whose debt has risen from $6.3 billion to $6.7 billion. According to budget documents at the end of 2000 there was $320 million in the FSF, at the end of 2003, only $145 million will remain in the rainy day fund. The provinces overall debt has also increased by $538 million. "There is little doubt that if this government continues to spend the way they have been over the past four years, Manitoba will continue to be at a financial disadvantage," stated Batra.

Income taxes/Bracket Creep

The reduction in the middle tax bracket to 14% is certainly welcome, unfortunately Manitobans are still paying some of the highest taxes west of Ontario. Any of the paltry savings, which don't come into affect until January of 2004, will be eaten away by bracket creep. Most provinces in Canada have announced the elimination of this stealth form of taxation, but the NDP in Manitoba refuse to let it 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, " stated Batra.

Business Taxes

"The reduction in corporate taxes is certainly laudable, however Manitoba is still well behind provinces like Alberta, BC and Ontario. The government should be doing whatever it can to ensure that Manitoba stays competitive with other provinces because according to budget documents, our province relies heavily on business income taxes," observed Batra. Since 1999, the province has raked in over $ 1.5 billion from business income taxes alone. In that same time period, Alberta amassed over $6.6 billion. During the same time frame, Manitoba's population grew by 0.6% and Alberta's by 3.5%.

Health Care

Yet again, one of the most significant spending increase is in healthcare. It is consuming almost 41% of the entire budget. If the current rate of spending is maintained, health care in Manitoba will consume 50 percent of provincial expenditures by 2014, and 75 percent of expenditures by 2034.

"This budget, long touted as the NDP's last before a provincial election, has done very little to take Manitoba off of the 'have not' list of provinces. We will continue to lose our educated professionals to other provinces and no amount of government spending will be able to stop it," concluded Batra..