After some delays in the legislature, the Manitoba Government has released its 2020/2021 budget. The budget focuses on two main areas preparing for fiscal and natural emergencies, and continued tax reduction.  

The PC government estimates health care costs this year could jump by between $50 million and $200 million due to COVID-19, and government revenues may drop anywhere from $160 million to $682 million. In response, the budget for emergency expenditures is to double to $100 million, and the province will put an additional $300 million into its rainy-day fund, in times of economic hardship. Areas such as health and family, with see annual spending increases below two percent.

"Our province will be in a far stronger position to respond to unforeseen emergencies, and we have never been as prepared to deal with those situations," says Minister Scott Fielding. "While the previous government left Manitoba without the resources to respond to natural disasters, our government is replenishing the rainy day fund."

Minister Fielding adds the Manitoba government is tabling a supplementary document that will outline measures in Budget 2020 to address the COVID-19 pandemic. As for tax reductions, the government has continued on its promise of eliminating probate fees and reducing and vehicle registration costs. However, the removal of sales tax from home insurance and salon services will be addressed next year.

The tax reductions will work alongside the Manitoba, a made-in-Manitoba Green Levy effective July 1. At a flat $25 per tonne, that will not increase each year, meaning  Manitoba families and businesses will pay less than the federal carbon tax plan.

"Budget 2020 delivers significant tax reductions which, combined with the 2019 tax cuts, are the largest in Manitoba history. Manitoba will be the only province that has cut its sales tax in recent years, and we've done it twice," says Fielding. "This PST rate reduction will ensure that all who pay the Green Levy will benefit through a lower sales tax rate."

He adds between the Green Levy and last year's PST rate reduction, and the provincial nominal GDP will increase by $108 million. The PST reduction is expected to create an average annual savings of approximately $345 per household, with about 510,000 households in Manitoba.