More than $18M unclaimed as Manitoba education property tax, auto insurance rebate cheques go uncashed
'Obviously, there's smarter ways to move money these days' than mailing cheques: Taxpayers Federation
The Manitoba government celebrated its new education tax rebate as a means to give financial relief to all property owners, but more than 18,000 cheques have not been deposited.
In total, 18,550 of the 456,168 cheques the province mailed out last year — 4.1 per cent — have yet to be cashed, the government confirmed.
That amounts to almost $6.8 million of taxpayers' money sitting somewhere, unclaimed.
There are also 61,000 rebate cheques from Manitoba Public Insurance — a provincial Crown corporation — that are gathering dust. The uncashed MPI cheques, given out through three rounds of pandemic-era rebates, total approximately $12 million.
A spokesperson for the provincial government notes the rebates can be deposited at any time, and said the cheques are still being cashed on a regular basis.
However, the Progressive Conservative government has received pushback for putting cheques in the mail since it introduced the education tax rebate in 2021. Critics have suggested the province could instead use direct deposit, or increase the education tax credit that property owners already receive.
The average rebate for a Winnipeg homeowner was about $458 in 2021.
A taxpayers' advocate applauds the government for moving to phase out what he says is an archaic way of funding the education system, but said the method for getting the tax rebate out is old-fashioned.
"When you're doing the right thing, you need to do it the right way," said Todd MacKay, Prairie director of the Canadian Taxpayers Federation.
"Sending out cheques? Licking envelopes? Like, was the fax machine broken? Did the passenger pigeons fly the coop? What's going on here?
"Obviously, there's smarter ways to move money these days — cheaper, more efficient ways to do it. The government needs to put some effort into that."
Cheques a political calculation: financial advisor
The province's cheque-issuing strategy came with a price tag of roughly $915,000 last year. Each cheque cost the province around $2, when you combine the price of the cheque, envelope and postage, the Winnipeg Free Press reported.
The government has defended sending cheques as a safe and reliable way to deliver money, adding the province doesn't have access to people's electronic banking information.
But MacKay urged the government to come up with a better solution. Under the current approach, envelopes can get lost in the mail, sent to the wrong address or forgotten about.
"Every government faces the temptation of trying to use its power to look better and put a bunch of cheques in the mail — that's pretty tempting," he said. "But they need to resist that temptation and do things the smart way."
David Christianson, a Winnipeg financial advisor, said the government is likely making a political calculation. The cheque in the mail reminds people of the policy decision, and which government it's coming from.
"I've spent 35 years in financial education and I've kind of come kicking and screaming into the realization that when things are in people's hands, they remember them. They're tangible. They matter," said Christianson, who is also the author of the book Managing the Bull: A No-Nonsense Approach to Personal Finance.
The Tory government, whose popularity among Manitobans has fallen, is trying to "maximize the emotional impact" in its tax relief decision, he reasons.
He also says an electronic approach doesn't work for everyone. The Canada Revenue Agency has been trying to compel people to sign up for direct deposit for income tax returns, but it still sent out 3.4 million printed cheques this year.
"The hard reality is that it's a tough thing to do, to get money out to people. It shouldn't be tough, but it seems like it is," Christianson said.
He suspects the Manitoba government may not have had time to develop a new strategy for sending rebates in the first year of the program, but said the government should move toward a digital solution.
Feds will also mail some cheques
It doesn't appear the province is heading in that direction, however.
A government spokesperson defended Manitoba's approach, saying other organizations and jurisdictions also issue cheques.
The federal government is moving from an annual carbon tax rebate that offset income taxes to a quarterly cheque received through direct deposit or through the mail. The first payment is expected in July in four provinces, including Manitoba.
The provincial spokesperson said Manitoba's finance department has found efficiencies in sending out education property tax rebates.
Starting this year, people who have multiple properties in Winnipeg will receive just one cheque, which was the case in all other municipalities last year. Individuals with multiple properties in more than one municipality will receive separate cheques.
NDP Leader Wab Kinew accused Heather Stefanson's Tory government of repeating a mistake by continuing to put cheques in the mail, which was the method used when the rebate program started under former premier Brian Pallister.
"We're seeing through these numbers that this is not the most effective way to reach people," the Opposition leader said.
The government should pursue other means of helping Manitobans through the current affordability crisis, Kinew said. He added the NDP would put forward its plan in the near future.
As was the case last year, property owners will receive this year's rebate cheques, which will total roughly $350 million, the same month their taxes are due, which is in June in Winnipeg.
People who did not receive their education rebate cheque last year can request a replacement at 1-866-626-4862, or they can call Manitoba Public Insurance at 1-800-665-2410 if they did not receive their eligible rebate on their auto insurance.
ABOUT THE AUTHOR
