Today Manitoba’s Minister of Finance Scott Fielding released Manitoba’s budget for the 2021-22 fiscal year. The headline numbers include a deficit projection of $1.597 billion for this upcoming fiscal year. That is an improvement of over $400 million as the most recent third-quarter projections forecasted a $2.08 billion deficit in the 2020-21 fiscal year.
In the words of Minister Fielding this budget has “two clear goals: First, protect Manitobans through COVID-19. Second, advance Manitoba’s economy past COVID-19. Protecting our people, advancing our province. That is what Budget 2021 is all about.”
On the COVID-19 front almost $1.2 billion is budgeted for costs brought on by the pandemic, as well as contingency funds for future needs. While it is an extremely difficult climate for forecasting, the province sees real GDP rising by 4.1% in 2021, followed by 3.6% in 2022. This comes off the 5.3% real GDP decline in 2020 and the province is optimistic that the pandemic deficits are temporary. The projected deficit for 2022-23 is $374 million, with that number falling to a $209 million deficit for the 2024-25 fiscal year.
On the tax side, the big news was speeding up the elimination of education property taxes. Residential and farm properties will see their education property taxes reduced by 50% over the next two years( 25% this year with an additional 25% the following year). Other property types such as commercial, industrial, railway and pipelines will see a 10% rebate.
The payroll tax exemption level is raised $250,000 to $1.75 million and the threshold for the reduced rate is increased $500,000 to $3.5 million. The annual tax savings to Manitoba businesses from the payroll tax changes is approximately $10 million and about 240 businesses will become exempt from the payroll tax.
Enhancements were also made to the Small Business Venture Capital Tax Credit with the maximum eligible investment rising to $500,000. New changes will come into effect on December 1, 2021 in regards to online and e-commerce purchases. Online marketplaces, accommodation platforms and streaming services will be required to collect and remit the sales taxes, mirroring moves made by the federal government and several other provinces.
Further measures to advance the province’s economy include the creation of a new, private sector-led economic development agency and starting a tax competitiveness review.
Over $2.1 billion is scheduled for strategic infrastructure this year, the largest amount in the province’s history. That’s an almost $80 million increase over what was budgeted in 2020 and includes a commitment to new electric bus infrastructure in Winnipeg.
Related Links
- Budget Speech
- Manitoba 2021-22 Full Budget
- Premier Pallister’s Press Conference
- Minister Fielding’s Press Conference
- News Release: Budget 2021- Protecting Manitobans, Advancing Manitoba
- Budget in Brief
- Estimates of Expenditure
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