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March 14, 2018MANITOBA BUDGET 2018-19 Manitoba's 2018-19 Budget plans for a deficit of $521 million (summary basis), following a deficit forecast of $726 million for the 2017-18 fiscal year. Through 2021-22, the Manitoba fiscal plan anticipates ongoing deficits, though they are anticipated to decline in each year to reach $142 million by 2021-22. The Manitoba government reiterates its commitment to balance the budget in its second term and to lower the provincial sales tax rate by 2020.
Manitoba's Budget also plans for a $115 million in-year adjustment/lapse which reflects planned expenditures that are not ultimately made during the fiscal year as well as a $50 million contribution to its Fiscal Stabilization Fund.
In 2018-19, Manitoba's fiscal plans have been slightly revised based on stronger economic and revenue growth assumptions for the near term as well as lower projected expenditures in 2019-20. From 2017-18 through 2021-22, Manitoba's revenues are projected to grow at an annual average rate of 2.2 per cent while expenditures grow by 1.4 per cent.
Over the next two years, the size of Manitoba's provincial government is expected to decline slightly with revenues as a share of GDP falling to 22.5 per cent in 2019-20 and expenditures falling to 23.1 per cent. Manitoba's deficits in the next two fiscal years are expected to be 0.7 per cent and 0.5 per cent.
Manitoba's economy outperformed economic growth expectations in 2016 and 2017, providing some lift to revenues over this period. However, going forward into 2018 and 2019, the Manitoba Budget assumes that growth with slow to 2.0 per cent in 2018 and 1.6 per cent in 2019. The decline in the real GDP growth rate is attributed to winding down of major project spending and consolidation in the province's mining sector. Despite these headwinds, rising global demand as well as business investment to increase capacity is expected to provide Manitoba additional employment and income that support domestic spending.
Key Measures and Initiatives
The Manitoba Budget continues with the government's plans for fiscal recovery and lowering taxes:
- Manitoba's basic personal amount credit under the personal income tax will be increased by $1,010 on January 1, 2019 and by the same amount again on January 1, 2020 to reach $11,402.
- Manitoba will also raise the threshold for which businesses can use the small business tax deduction from $450,000 to $500,000 on January 1, 2019.
- Manitoba will implement a climate and green plan, featuring a $25/tonne carbon tax starting September 1, 2018. Carbon tax revenues over the next four years will be returned as tax reductions. There will also be a $102 million endowment provided to a conservation trust.
- Tobacco taxes for fine cut tobacco are raised from 28.5 cents/gram to 45 cents/gram
- Ambulance fees will be reduced again to $340
- Manitoba will introduce a further 700 child care spaces as well as a refundable tax credit for private businesses that create new child care spaces in the workplace.
- After investigating public-private partnerships, the Manitoba government will proceed with school construction projects using a conventional approach.
- Manitoba is not budgeting for any revenue from the sale of cannabis in the 2018-19 fiscal year, citing uncertainty over revenue and cost projections.
Manitoba Budget 2018-19
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