Finance Minister Cameron Friesen delivers Budget 2018 at the Manitoba Legislative Building in Winnipeg on Mon., March 12, 2018. Kevin King/Winnipeg Sun/Postmedia Network
Manitobans will begin paying carbon tax on Sept. 1.
Budget 2018 predicts the new $25-per-tonne levy will raise $248 million in revenue per full year. And that tab will help drive up the overall taxes Manitobans pay per full year by $95 million, as long as the financial plan is approved as is.
The province does, however, vow to provide enough tax cuts over four years to eventually return all carbon tax revenues to Manitobans.
The new levy will add an initial cost of about 5.3 cents per litre to the price of gasoline and tack on 4.7 cents per litre to the price of natural gas, though agriculture-related emissions are exempt.
Finance Minister Cameron Friesen said he expects those up-front costs will convince Manitobans to reduce their fossil fuel consumption, even though tax relief will eventually offset the pocketbook pinch.
“The price at the pump does change … and we believe that price at the pump will have (an) effect,” said Friesen.
The carbon tax revenues won’t immediately fund key green investments. While the budget commits to spend $102 million on a conservation trust for “natural infrastructure” and another $40 million on green projects, finance officials say that will be paid out of general revenues.
Manitobans are slated to save money this year through a basic personal tax exemption increase to $10,392 on Jan. 1, 2019, which is expected to save individual taxpayers $109 a year. The exemption will grow to $11,402 in 2020, saving individuals another $109 each.
That tax cut is expected to cost the province $156 million on a full-year basis, which Friesen said is worth the investment, even as the province works to slay its deficit.
“The government believes Manitobans deserve a break,” said Friesen.
The provincial summary deficit, which includes arm’s-length agencies such as universities and Crown corporations, is expected to drop to $521 million by the end of the year. That’s down from an $840-million projection in the 2017 budget, a shortfall the province now expects will be reduced to $726 million by the end of this fiscal year.
The core deficit, which doesn’t include arm’s-length agencies, is expected to drop to $639 million this year, down from the $779 million projected in 2017.
The province will also spend money on schools, devoting more than $100 million to build five new ones. That includes an elementary school and a high school for Waverley West, a kindergarten to Grade 5 school in Seven Oaks, a kindergarten to Grade 8 school in Waterford Green and a kindergarten to Grade 8 school in southeast Brandon. These schools won’t be built through public-private partnerships, an idea the government had studied.
The province expects bulk buying to save $18 million on building the schools and allow the construction of one more school than originally planned.
However, post-secondary and municipal funding will be cut to help achieve those savings. Post-secondary school operating grants will fall to $676 million, down from about $682 million.
Meanwhile, finance officials say overall “basket funding” to municipalities will drop by $3 million, from about $315 million to $312 million.
Here are some highlights of pledges within the 2018 Manitoba budget:
-Use $3.5 million of revenue from skilled workers applying to the Manitoba Provincial Nominee program to offset new grants for immigrants and refugees.
-Raise the Families department budget by $60.5 million.
-Introduce a new tax credit to support creation of up to 200 licensed child-care spaces, through a $10,000-per-space benefit over five years.
-Add $4.8 million to the inclusion support program.
-Add $13.6 million for supports to adults with intellectual disabilities.
-Increase affordable housing support by $8.9 million.
-Raise the small business income tax threshold to $500,000, up from $450,000, as of Jan. 1, 2019.
-Add $7.7 million for dialysis treatment.
-Add $14 million for the home cancer drug program.
-Reduce ambulance fees from $425 to $340.
-Spend $70 million to launch to Lake Manitoba outlet project.
-Add $50 million to the provincial rainy day fund.