Winnipeg Free Press

Winnipeg Free Press (Newspaper) - March 9, 2005, Winnipeg, Manitoba Budget analysis the provincial 2005 budget Winnipeg free press wednesday March 9, 2005 a13 $2.8 billion spending $2.5 billion $2.1 billion$2.4 billion $2.2 billion tempers $2.0 billion $1.8 billion $1.6 billion Good news $1.4 billion $2.3 billion $1.7 billion $1.9 billion$1.6 billion$1.6 billion $1.5 billion$1.5 billion year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 critics say Token tax cuts failing to solve provinces Revenue woes from Ottawa have been unpredictable $0 million staying he said. Reductions Mani and much of that new Revenue came Toba residents $500 million from Ottawa meaning Manitoba still and companies has to made any inroads into becoming Are paying half a billion dollars More self reliant. $400 million investing in tax cuts would create less tax than they jobs and people with new jobs pay new were in 1999. $300 million but despite income taxes Mccallum said. Self those cuts Mani generated Revenue rather than Money $200 million begged from Ottawa results in longer Toba still languishes As the highest taxed province West of Quebec and its term steadier Revenue growth he said. Finance minister Greg Selinger and spending in that time has soared by $2 $100 million doer both have admitted transfers billion or $891 for every Man woman and child in the province. But instead of using that As an impetus Manitoba now spends $6,634 per to wean Manitoba off Ottawa a Wallet 1995/96 1996/97 1997/98 1998/99 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 capita up $300 Over last year. Premier Gary doer will argue that they have complained loudly that some of his property tax cuts show up Ottawa needs to Send bigger cheques. In the budget As an expenditure Manitoba is now the Only Western because taking education funding off province entirely reliant on equalize the Back of property tax payers Means Tion to balance its budget and it is get the province has to increase its own Ting worse. This year 19.6 per cent of revenues come from equalization up education spending. From 18.3 per cent in 2000. Regardless All that spending is not includes general purpose Manitoba Hydro making Manitoba look inviting to out $16.4 billion even Saskatchewan developed a plan health facilities and miscellaneous siders critics say and at some Point to wean itself off equalization and we re going to hit a Brick Wall when while that was accomplished because of soaring world Oil prices Manitoba has revenues can to keep up. Doer said yes so far shown no interest in even trying erday he believes this budget is a Hall to become less reliant on equalization. Mark of his balanced approach highlighted by the largest five year tax most of the governments increased spending is for programs Manitoban $14.7 billion$15.2 billion reduction in Manitoba a history. Critics Are bracing themselves for hold near and dear namely health and the Day revenues fall Flat and All this education. But Are we getting any bang $14.2 billion spending is no longer affordable. $14.3 billion for our extra Bucks Manitoba chamber of Commerce $13.9 billion when Revenue growth comes $13.8 billion president Graham Starmer said the $13.8 billion screeching to a halt what Are we going province in to answering that question. $14.5 billion to do said University of Manitoba economist John Mccallum. We Don to know because we Don to $13.6 billion Joe Bryksa / Winnipeg free press w Hile the nip tried to spin its sixth budget As a Good news document that invests in provincial priorities while paying Down debt cutting taxes and saving for the future economic critics were shuddering yesterday under the weight of new provincial spending. The nip ? Long flagged As a tax and spend party ? has been Given credit in the last five years for cutting taxes. With yesterday a new income property and business tax invested in tax cuts where it would ultimately generate More Revenue. The $314-million Deposit into the Rainy Day fund is a bit of a red herring Mccallum said considering much of that is actually a health care Transfer paid ahead of time by Ottawa that must doer Era proceeds from Sal of its invested be spent Over the next few years to bring Down waiting lists. Mccallum said the tax cuts introduced this year Are not big enough to encourage capital investment or Job growth. Because of spending we be put a big sign Over the province that says High taxes and that a where we re Mccallum says the nip needs to Start capping spending increases at the equivalent of inflation or about two per cent. For the last two years spending growth has hit 3.5 per cent almost Dou ble the rate of inflation. While spending kept Pace with Rev Enue growth Mccallum said the extra Money from Ottawa should have been viewed As an unusual circumstance and should have been socked away or taxes and fees province goes easy on sin taxes user fees have any benchmarks he said. Business groups have been demand ing the province set economic goals and outline a Way to get there but have not yet been Given that plan. Its unlikely Manitoba will Ever become More than a Middle of the Road province without planning How to get there the critics say. $14.0 billion $13.5 billion $13.0 billion $12.5 billion by Mia Rabson for the first time in six years the government did to hike sin taxes and user fees across the Board. With Federal Cash fattening the provinces Bank accounts and economic growth holding steady finance minis Ter Greg Selinger left cigarette taxes Gas taxes liquor markups and other user fees virtually untouched yesterday. We Felt we could balance the budget without raising those taxes this year Selinger said. The government has been accused Over the past several budgets of claim ing to Cut taxes on the income tax Side while hiking every consumption tax and user fee it could find. Between 2000 and 2005, the Money the province raised from various consumption taxes sales taxes and other levies soared by $577 million. More than 15 per cent of that was in tobacco tax hikes alone. On top of that user fee revenues including court fines and levies Drivers. licences and Park forestry and Conser vation permits went up $84 million. Last year increases were made to jus Tice fees Drivers licence fees corporate capital taxes tobacco taxes liquor markups motive fuel taxes tax rate applied on diesel fuel and land Transfer taxes. The government also applied the sales tax to accounting and engineering services. Adrienne Batra Manitoba director of the Canadian taxpayers federation praised the province for leaving the Little people alone this time. What a change from last year when they Nickel and died us to death she said. But Batra said its Likely a Short lived reprieve made possible by Ottawa a generosity. This government is balancing the books this year because of increased year 1995 1996 doers government left cigarette taxes Gas taxes liquor markups and other user fees virtually untouched. Transfer payments she said. Its not because of anything they be done them selves like watching their spending. We have other canadians to thank for tory Leader Stuart Murray is also sceptical there wont be user fee increases this year. He said Many of these hikes can be passed at the Cabinet table and Don to have to be included in the Provin Cial budget. Its not unlike the doer government to pass these sneaky taxes these user fees somewhere Down the line he said. The province did raise one fee yesterday in the Justice department. It will raise service fees applied to some court costs from $30 to $35, raising $350,000. Selinger called that a fee charged to the people who break the Law. $12.6 billion $12.9 billion 1997 1998 1999 2000 2001 2002 2003 2004 2005 economic development tax cuts incentives aimed at businesses by Paul Egan the provincial government served up a mix of business tax cuts and incentives in its budget yesterday but faced continued criticism from business leaders that it lacks an economic plan. Measures aimed at helping business and the Economy announced by finance minister Greg Selinger include. The general corporate tax rate Falls to 14.5 per cent from 15 per cent effective july 1, 2006. The rate will drop further to 14 per cent on july 1, 2007. The Small business rate is Cut to 4.5 per cent from 5.0 per cent on Jan. 1, 2006 and to 4.0 per cent on Jan. 1, 2007. Combined the business tax cuts Are Esti mated to Cost the province $36.9 million a year. A research and development tax cred it increases to 20 per cent from 15 per cent. The estimated Cost of the increase is $2.5 million a year. The 10 per cent manufacturing invest ment tax credit which until now Only applied to purchases of new buildings and equipment is extended to used buildings and equipment effective immediately. Also companies will be Able to claim the first two per cent of the tax credit whether they owe taxes or not. The changes Are expected to Cost the government $10.8 million a year. The film and video production tax cred it is increased from 35 per cent to 45 per cent for new productions. The budget also expands the types of productions covered by the tax credit and increases the area covered by the tax credits Northern incentive. The measures Are expected to Cost $2.7 million a year. Other economic incentives include $1 million for the . Asper clinical research Institute at St. Boniface Gen eral Hospital and $1 million for Bio med ical commercialization. Dave Angus president and ceo of the Winnipeg chamber of Commerce said the tax cuts and other incentives Are Wel come. However we were hoping for some kind of sense of where we re headed ? we did to see that Here today Angus said. Selinger had promised business Lead ers the budget would include an eco nomic plan for Manitoba. When asked about that plan yesterday he pointed to a document outlining a seven Point action strategy that is an updated version of a report the province released in 2003. It sets out priorities that include Edu cation research investment affordable government growth through immigration clean Energy and Community development. ;