CALGARY, AB – The Government of Manitoba is banking on steady economic growth as it released a deficit budget focused on creating jobs and funding badly needed new infrastructure.
The 2015 budget, delivered Thursday, revealed a $422-million summary budget deficit, with increases in spending as the province delayed its returned to a balanced budget until 2019.
Manitoba’s summary net debt also increased to $20.4 billion. The government set aside an unprecedented $1 billion in infrastructure spending for roads, bridges and flood protection.
“It’s great to see the province making strategic investments in the future of Manitoba, in particular in the areas of infrastructure and youth. These are investments that will pay off in the medium term,” said Canada West Foundation senior economist Janice Plumstead.
“The biggest concern we have with the budget is that the province is already spending $842 million a year in debt payments. This could skyrocket when interest rates climb, yet the province is still taking on significant additional debt. This is a legacy that Manitoba’s youth may ultimately regret.”
The budget contains a number of modest tax credits, including for caregivers and volunteer firefighters and doubles the seniors’ school tax rebate to $470. The province is also raising the minimum wage to $11 an hour in October and creating the Youth Jobs Strategy. Meanwhile, for banks and financial institutions, corporation capital tax is going up to 6 per cent from 5 per cent. But fewer small businesses will pay corporate tax due to an increase in the exemption thresholds.
While Manitoba has struggled with a string of budget deficits, it has also experienced the benefit of a diversified economy and good access to the U.S. market. The Manitoba economy has some wind in its sails and the government is aiming to include Manitobans in that growth, said Plumstead.
The Canada West Foundation focuses on the policies that shape the West’s quality of life. Through our evidence-based research and commentary, we provide the objective, practical solutions. For more than 40 years, we have been a passionate advocate for western Canada.
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