Manitoba budget has ‘a lot of positives’ for small businesses, but many question where money’s going

Many are criticizing where the Manitoba government is allocating money in the new fiscal year, but a business lobbyist says there is still some good news coming out of it for small businesses.

“There are a lot of positives in this budget for small businesses, hopefully to help them tide through ongoing [COVID-19] restrictions,” said Jonathan Alward, director of provincial affairs for the Manitoba branch of the Canadian Federation of Independent Business (CFIB), a national small-business advocacy non-profit.

The Manitoba government released its 2021-22 budget Wednesday. Among its many initiatives were tax breaks for some small business owners.

The Pallister government will remove the seven per cent provincial sales tax on personal services, such as barbers and salons.

The threshold that exempts business owners from paying payroll taxes will be raised from $1.5 million to $1.75 million. The annual payroll below which employers pay a reduced tax will also be raised from $3 million to $3.5 million.

This is expected to result in saving a combined $9.7 million for 1,100 business owners, and exempt about 240 employers from payroll taxes, the budget says.

The Pallister government is spending $50 million toward long-term recovery for people and economic sectors that have been most impacted by the pandemic. 

Some of the hardest hit industries are service and accommodations and tourism. Meanwhile, newcomers, who have been in Canada less than five years, and young workers are the labour demographics most impacted by the pandemic.

First Nations ‘not even a real consideration’: Meeches

But Treaty One Nation was disappointed by the budget because it did not specify initiatives to bolster First Nations people and businesses, spokesperson Chief Dennis Meeches said in a statement.

The budget lists a dozen social and economic initiatives for Indigenous people, but nothing specific about pandemic supports for them.

“First Nations people and businesses of Manitoba continue to bolster the provincial economy, yet we’re not even a real consideration in this budget. First Nations and other marginalized people have borne the brunt of this pandemic,” said Meeches.

“While we appreciate the additional emergency measures funding, developing a fair and inclusive approach together to rebuild our economy is the only way to move forward.”

Residential education tax break ‘a big miss’

The Manitoba government will also be phasing out the education property tax — a promise made by the Progressive Conservatives during the 2019 election campaign.

The education tax will be cut in half for residential and farm property owners over the next two years. There will be a 25 per cent cut this year, followed by another the year after.

Other types of property owners can expect a 10 per cent education tax cut this year.

“We want to know where that money is going to come from,” said Nathan Martindale, vice-president of the Manitoba Teachers’ Society, which represents over 16,000 public school teachers.

“It’s a really big chunk of money and not only does it have to be replaced, but it has to be adequate.”

Nathan Martindale of the Manitoba Teachers’ Society hopes the money lost from the property tax is made up through provincial funding. The provincial government earmarked nearly $4.6 billion for education in 2021-22, including post-secondary. (Erin Brohman/CBC)

Alward of CFIB believes residential property owners getting the tax break was “a big miss.”

“When it comes to residential property owners getting that big tax break, I think that could’ve been better invested to help a lot of businesses manage their costs, because many businesses are still struggling every day with restrictions,” he said.

“Most small [businesses] have been paying more than their fair share in education property taxes.”

Unions against tax cuts

Manitoba unions are decrying the tax cuts in the 2021-22 budget, while the head of the Manitoba Association of Health Care Professionals questions the health budget.

“We were hoping to see real investments into the services that have been helping Manitobans through this pandemic. Investments into schools, health care, social services, and municipalities,” said Lee McLeod, regional director Canadian Union of Public Employees, in a news release.

“This is not the budget that Manitoba families needed.”

The Manitoba government has earmarked nearly $7 billion for the health ministry (including mental health) this fiscal year — an increase of 2.3 per cent from 2020-21.

The budget highlights for health include over $270 million on healthcare in rural and northern Manitoba, digital health supports and “infrastructure investment projects and programs,” and an additional $23 million toward the development of cancer treatments.

Michelle Gawronsky, president of the Manitoba Government and General Employees’ Union, believed money could have been put toward COVID-19 vaccination rollout, she said in a statement

Meanwhile, Bob Moroz, president of the Manitoba Association of Health Care Professionals, says the numbers don’t add up.

Health Minister Heather Stefanson’s PC government has earmarked nearly $7 billion for the health and mental health ministries this fiscal year — an increase of 2.3 per cent in the sector from 2020-21. (Pool camera)

“If you take away the spin, it looks like funding for most vital areas that Manitobans count on won’t keep up with the rate of inflation,” he said in a statement.

“They claim to be making investments in areas like diagnostics, EMS, patient transport and cancer treatment but they’ve made similar claims in the past. Meanwhile our Allied Health members are still waiting for increased supports and staffing to handle routine patient loads, let alone the increased demands of the pandemic.”

Gawronsky also accused the provincial government of using the pandemic as an excuse to not allow stakeholders the opportunity to review the budget prior to its release.

“This has long been a tradition where stakeholders are permitted to review these important documents and speak to finance officials to better understand departmental financial breakdowns,” Gawronsky said.

No climate change lens put on economic recovery

Manitoba’s Climate Action Team — a coalition of local environmental and social organizations — accused the Pallister government of not approaching economic recovery with the climate crisis in mind.

The budget detailed the province’s climate and green plan and action it has taken in the past, and what it plans to do within the next couple of years. But the PCs emphasized that they believe the federal carbon tax doesn’t suit Manitoba, calling it punitive.

“Manitoba will continue to pursue a made-in-Manitoba carbon pricing plan that better reflects our unique environmental and economic circumstances,” the budget says.

The Climate Action Team believes the province failed to contribute to economic recovery with climate change in mind.

“A true recovery budget would change direction, restarting Manitoba’s economy by investing in good jobs, public services and programs, and the transition to renewable energy,” said Hannah Muhajarine, organizer with the Manitoba Energy Justice Coalition, in a release.

“This government continues to engage in regressive tax cuts while slashing public services and spending, an approach that will only slow our economic recovery while intensifying the pain of the climate crisis.”

Investments, such as building green transportation and energy infrastructure and retrofitting old buildings, could create jobs and long-term payoff toward reducing Manitoba’s carbon footprint, the release said.