The province projects a deficit of $1.597 billion for 2021-22, an improvement from the third quarter projection for 2020-21 of $2.08 billion.
The first priority of Budget 2021 is to continue to protect Manitobans through the ongoing pandemic. The province has budgeted $1.2 billion for pandemic-related health and education costs:
- $230 million for personal protective equipment, testing and vaccine site infrastructure, contact tracing and other preparations as part of the province's overall public-health response.
- $350 million for additional health-care systems costs in preparation for a potential third wave of COVID-19.
- $160 million to support school and education needs over the current and next school years.
- $100 million for the vaccine program.
- $40 million for Manitoba Restart Program capital initiatives at the municipal level.
- $300 million will be set aside for unexpected expenses.
Budget 2021 provides tax relief for Manitoba families by delivering in full the $2,020 Tax Rollback Guarantee one year earlier than planned:
- Phasing out education property taxes by 50 per cent over the next two years (25 per cent per year) for residential and farm properties, and 10 per cent for other types of property, with rebates returning nearly $250 million to approximately 658,000 property owners this year, and an average rebate of $1,140 over two years;
- The province is lowering payroll taxes for small businesses. The exemption threshold is being raised to $1.75 million of annual payroll from $1.5 million. The threshold below which employers pay a reduced rate is being raised to $3.5 million from $3 million.
- Budget 2021 includes more than $62 million to help businesses retrain employees and develop e-commerce platforms, and $25 million for youth job programs.
- The small business venture capital tax credit is being increased to $500,000 maximum eligible investment to help businesses raise business growth equity.
- Removing the retail sales tax (RST) on personal services including haircuts and salon services as of December;
- Reducing vehicle registration fees a further 10 per cent starting in July; and
- Indexing Basic Personal Amount and personal income tax brackets to inflation so an additional 1,500 Manitobans won’t have to pay provincial income tax for 2021.
- Starting Dec. 1, retail sales tax will apply to audio and video streaming services such as Netflix. The province will also require online marketplaces to collect and remit retail sales tax on the sale of taxable goods sold by third parties on their electronic platforms. Online accommodation platforms such as Airbnb will also be required to collect and remit sales tax on the booking of taxable accommodations starting Dec. 1.
- Establishment of a Tax Competitiveness Review that will invite the views of Manitobans to ensure our Province has a truly competitive taxation system for growth and jobs.
Manitoba’s economic outlook indicates a strong rebound in 2021 with real GDP rising 4.1 per cent, followed by another solid year in 2022 of 3.6 per cent real growth.
- A record $2.1-billion investment in strategic infrastructure will help drive construction jobs and stimulate the economy:
- Almost $630 million for road construction and maintenance, including $107 million through the Manitoba Restart Program, which will allow safety improvements at the intersection of the Trans-Canada Highway and Provincial Trunk Highway 16 and the south perimeter interchange at St. Mary’s Road;
Budget 2021 also supports communities through the following commitments:
- $103.5 million increase for priority strategic infrastructure projects that match federal funds under the Investing in Canada Infrastructure Program (ICIP);
- flexible basket funding to municipalities with $172.6 million in operating costs and $137 million in capital costs, with advanced operating grants again this year;
- $25 million in trust to redevelop the Hudson’s Bay Building in downtown Winnipeg; and
- $5.6 million more for the Building Sustainable Communities Program to fund more than 10 larger-scale community capital projects.
We are glad to see continued investment in healthcare to address future Covid-19 measures.
A number of measures the Province announced have long been Chamber policy including a plan to take education off property taxes, reducing Payroll Taxes, indexing personal income taxes and the establishment of a long overdue Tax Competitiveness Review.
We look forward to further details on skills training and digital transformation programs that will help business to recover.
Most important issue to economic recovery is the pace to reopening businesses that have been operating at less than 50% capacity for the past year. Immunizing Manitobans with a greater sense of urgency needs to be government’s number one priority.