MCC President & CEO Reacts to Budget 2019

Mar 8, 2019 | Other News

During Budget 2019 lock-up, one theme was common among stakeholders in attendance: that this government is keeping its promise to get its fiscal house in order and return to a balanced budget. But at what cost to business growth?

According to MCCs 2018 Manitoba Business Outlook Survey, 71% of respondents believe the province is heading in the right direction. Certainly, the big news of a 1% cut to PST, effective July 1, 2019, and an increase to the Basic Personal Income Tax Exemption from $9,626 to $9,809 in 2020, are both great for individuals and families. Plus, the government forecasts a summary deficit of $360 million for the 2019-20 fiscal year — $161 million less than the deficit projected for the 2018-19 fiscal year, with the expectation of returning to a balanced budget by 2022.

But MCC is concerned that this government’s spending levels in infrastructure and post-secondary education will have a negative effect on the economy.

In fact, just 27% of our survey respondents expected to be increasing their workforce in 2019, and 52% were expecting slow, but steady, revenue growth in 2019. We’re not convinced that Budget 2019 will provide the business community with the confidence booster needed to move those numbers in a more positive direction.

The reality is that federal government transfers are projected to increase by $319 million (7.1% including an equalization increase of $218 million or 10.7%), which accounts for $4.8 billion of revenue in a $17 billion budget. And, in spite of the fact that the increase in the Basic Personal Income Tax Exemption will enable 8,000 low-income earners in Manitoba to live income tax-free, personal income tax levels are still not competitive with other jurisdictions. We also note that the government did not take action on the Payroll Tax.

MCC has called on the province to implement a full review on taxes with a goal of making Manitoba more competitive, and 85% of our Manitoba Business Outlook Survey respondents support this measure. “I think a tax review is a great idea,” said Minister Fielding during the Q&A section of the MCCs March 8 MBiz Breakfast event.

Other highlights from Budget 2019:

  • $313.5 million in basket funding allocated for local governments to provide municipalities with the flexibility they need to meet needs including enhanced support for roads and bridges for municipalities outside of Winnipeg;
  • $350 million allocated in dedicated funding for highway infrastructure and projects such as the Daly Bridge in Brandon, the replacement of the existing overpass near Portage la Prairie and improvements to PTH 21 near Shoal Lake;
  • $45 million allocated toward capital projects in recognition of Manitoba’s 150th anniversary including funding for additional highways and other infrastructure projects;
  • More than $1 billion on strategic infrastructure such as roads and bridges, water and wastewater infrastructure projects, flood protection, hospitals, schools, universities and colleges;
  • Increased funding for the Manitoba Film and Video Production Tax Credit to $31.5 million from $16 million;
  • Increased funding for the Young Farmer Rebate Enhancement program by 32 per cent to $2 million
  • $50 million transferred to the Fiscal Stabilization Fund (“slush fund”)
  • Small Business Venture Capital Tax Credit extended for three more years


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