Manitoba is facing a nearly $800-million deficit for the year ahead, as the first budget under the NDP government promises incremental progress on a number of election commitments, along with new tax relief geared toward lower-income households.
The Manitoba government’s 2024 budget, released Tuesday, pledges to double the province’s spending on health-care infrastructure — including beginning the process of building a new emergency room at Winnipeg’s Victoria Hospital.
It also promises to extend the provincial gas tax holiday by another three months and introduce changes to the education property tax next year that will essentially eliminate the tax for some homeowners, but see the owners of higher-valued homes pay more.
A total of $635 million is budgeted for health-sector capital projects, including starting the process of opening a new Victoria ER, along with an emergency room in the Interlake community of Eriksdale and a new CancerCare headquarters — all NDP election promises.
However, the budget doesn’t offer a timeline for any of those projects, though Premier Wab Kinew, speaking during an early afternoon briefing with reporters, said he expects “shovels in the ground” for Victoria’s ER within two years.
That south Winnipeg emergency room was converted into an urgent care centre in 2017, under what the then Progressive Conservative government called the “most significant change in the health-care system in a generation.”
Tuesday’s budget also promises $2.5 million this fiscal year toward planning a supervised consumption site in Winnipeg’s North Main area, and $500,000 for starting an inquiry into the construction of the Winnipeg police headquarters, but no start or completion date is provided for those initiatives either.
The government is pledging a total of $1.4 billion more in spending across the board — a six per cent increase over the last budget. In particular, the health department will get an extra $980 million in spending, for a total of $8.2 billion.
Finance Minister Adrien Sala said those spending increases are appropriate, even as his government tries to slay a forecast deficit for the previous fiscal year of nearly $2 billion.
“There are those who will say this budget is too ambitious — but it’s for those reasons it needs to be ambitious,” Sala said, while reading his budget speech.
He maintained the government can fix health care and make life more affordable, while also charting a path back to a balanced budget in four years.
“And if anyone, if anyone tries to tell you it can’t be done — we’re going to prove them wrong. Just watch us.”
The province is assuming its books will be supported by an extra $960 million in revenue. Tax revenues are projected to increase, including $152 million in added PST revenues due to an expectation of higher consumer spending. Federal transfers will rise by just under $1 billion, to a total of $6.9 billion.
Promise to hire 1,000 more health-care workers
The biggest winner in the $24.1-billion provincial budget is health care, which the NDP made the focus of last fall’s election campaign.
The government is promising to open minor injury and illness clinics in Winnipeg and in Brandon, and a new primary care clinic in Winnipeg.
There’s money set aside for 151 new acute care beds and seven more intensive care beds as well.
The government is also pledging $310 million toward its goal of hiring 1,000 new health-care workers over the next year.
Premier Kinew expressed confidence Manitoba will reach that target.
“We hope to exceed those numbers,” he told reporters during Tuesday afternoon’s briefing.
Though details are sparse on how the government will find those workers, the province is committing $15.6 million for new doctor training seats, $12.3 million toward recruiting and training new family medicine doctors, and $6 million for new medical specialists.
The health-care hiring pledge would include adding 100 doctors in 2024 — a significant increase, says Doctors Manitoba president Michael Boroditsky.
“We’re encouraged that the government is putting together a lofty number, and now we’re interested to sit at the table and figure out the details,” he said following Tuesday’s budget release.
But Kyle Ross, president of the Manitoba Government and General Employees’ Union, which represents some rural health-care workers, expressed skepticism around the hiring target, which would also include 90 more paramedics and 600 health-care aides.
“I think it will be really challenging. The job right now, the pay isn’t competitive with everything around them,” he said.
“I think there is a lot of work to be done to make those jobs attractive to Manitobans who want to take them on.”
The previous PC government initially committed $200 million toward recruitment and retention efforts, and pledged an extra $200 million before the election campaign.
Gas tax extended
The budget also includes various affordability measures.
The government will extend the provincial gas tax holiday, which temporarily suspends the 14 cent per litre tax, until the end of September.
Interim Manitoba Liberal Leader Cindy Lamoureux argues the government could have found a better use for the tax money it is forgoing.
“This budget further adds to our debt, really pushing our province into an irresponsible position,” she said.
The province will also scrap the existing package of 50 per cent education property tax rebates in favour of a single credit of up to $1,500 to all homeowners, beginning in 2025.
The tax rebate for farm properties will be maintained at 50 per cent, while the rebate for other commercial properties is being removed altogether pending the introduction of a new education funding model expected to be released in 2025.
While the previous Progressive Conservative government pledged to gradually eliminate the tax, the NDP’s new system will result in some homeowners getting credit for the full amount they pay in taxes, and some others paying more than they were under the PC administration.
Under the previous model, a homeowner paying $2,301 in gross school tax would get a total of $1,500 back through the 50 per cent tax rebate and a $350 property tax credit — meaning that homeowner will essentially see no change under the flat-credit system.
The change to a flat credit will mean homeowners whose taxes are above the $2,301 threshold will end up with a lower rebate than they previously got.
However, any Manitoba household subject to $1,500 of provincial property taxes or less in 2025 won’t pay any provincial property taxes at all.
Kinew said 83 per cent of Manitobans “will make out better” under his government’s plans.
Political scientist Christopher Adams said it’s another sign of the NDP supporting lower-income people at the expense of higher-income people.
“We have a budget that’s more oriented toward middle- and low-income” people, he said, noting the government is about to launch a school nutrition program and planning to build 350 more social and affordable housing units.
Overall, the property tax changes will raise provincial revenues by $148 million annually.
Interim Progressive Conservative Leader Wayne Ewasko doesn’t believe most homeowners will be better off.
“When you really drill down to it, it’s going to be a significant loss to Manitobans, and I think it’s going to hurt more
people than it’s going to help,” he said.
There is also a change to income taxes that will see people with net income above $200,000 paying more through a clawback on the basic personal exemption.
The province will also create a $300 rebate for people or businesses buying security systems and a rebate of up to $4,000 for electric vehicle purchases, retroactive to August of last year.
The budget also includes money for free prescription birth control — expected to come at a cost of $5 million this fiscal year — and to double the maximum fertility treatment tax credit to $40,000.
In 2025, the renters’ tax credit will increase from $525 to $575. The province will gradually return the credit to the $700 amount it was until the Tories reduced it in 2021.
Legislation is also promised to help convert commercial buildings into residential rental units, though no details are provided in the budget.
The province is also vowing a $7.7-million increase for highway maintenance, including a plan to provide 24/7 snow clearing for the Perimeter Highway.
Kinew backtracked on a planned inquiry into the COVID-19 pandemic, explaining Tuesday a “thorough” review into government decisions is necessary but that Manitobans want to move on from the pandemic.
Manitoba has run deficits in every year but two since 2009. The government’s net debt is forecast to climb this year to $35 billion.
Manitoba’s NDP government tabled its first budget on Tuesday, April 2. Here’s a look at the province’s spending plan.