Manitoba's budget focuses on infrastructure, but maintains deficit

Most Manitobans won't have to expect any tax increases in this year's budget, which offers or expands modest tax credits, boosts health and family services spending, and pledges to spend an unprecedented $1 billion on roads, bridges and flood protection measures across the province.

Finance Minister Greg Dewar's budget, which will be the second-last budget by the NDP government before next year's provincial election, proposes doubling the senior's school tax rebate and increasing the caregiver's tax credit by 10 per cent.

Bad news for smokers, though: the tobacco tax is going up by half a cent per cigarette at midnight tonight, meaning a pack of 25 cigarettes will cost an extra 12.5 cents.

That increase will fund smoking cessation programs, which will see a $2-million boost this year.

• Budget highlights: tax credits, minimum wage increase and more

Infrastructure is a big winner in the budget, which pledges $1.08 billion on roads, bridges and flood protection structures.

The province is promising to contribute one-third of the funding needed to build underpasses being proposed on Marion Street and Waverley Street in Winnipeg.

Other projects that will be funded under the 2015 budget include:

• Building an interchange at Highway 59 at the Perimeter Highway to improve traffic flows in what's been known as a busy intersection. This project was first announced in 2014.
• Improving the Trans-Canada Highway west of Winnipeg to allow for the speed limit to be safely raised from 100 km/h to 110 km/h on June 2. The highway upgrades were also first announced last year.
• Continuing to improve Highway 75 so it can better withstand flooding. This was first announced in 2013.

As well, the province says it will spend more than $440 million for municipal priorities, including roads, flood protection and policing. Dewar said specific announcements about those projects will be coming in the next few weeks.

The infrastructure spending is part of the province's five-year, $5.5-billion infrastructure plan. Manitoba is currently in the second year of the plan.

'We are choosing to build,' says Dewar

Dewar said the government will increase core spending to the rate of economic growth.

"Budgets are about choices. We are choosing to build instead of cut," Dewar told reporters before he delivered his budget address on Thursday afternoon.

The province's economy is strong, he said, because the NDP government has made decisions that have protected Manitobans from the "effects of global economic uncertainty."

"Investing in strategic infrastructure projects allows us to build and repair roads, bridges and flood protection. Doing so creates jobs now as it lays the foundation for an even stronger economic future," he later said in his budget speech.

"And by investing in education and training we are helping more Manitobans, especially young Manitobans, get the skills they need. Skills that will help them start careers and take advantage of the opportunities created by a growing economy – here at home."

Winners and losers

The Health Department will see a spending increase of 3.2 per cent, followed by Family Services at 2.7 per cent and Education at 2.1 per cent.

Family Services will see an extra $30 million as a result of the increase.

However, the Justice Department and "other expenditures" will see a 6.1 per cent spending cut, amounting to roughly $80 million, from the forecasted amount from 2014-15.

The budget projects a net deficit of $422 million in 2015-16, which is about the same as the $424-million deficit forecasted for 2014-15.

The net debt is estimated to be $20.4 billion.

Earlier this month, Dewar admitted that the government will not produce a balanced budget until 2018, even though the province still has balanced budget legislation.

The budget proposes taking $105 million out of its fiscal stabilization account, also known as the province's rainy day fund, in the next year.

That means the fund will have $115 million left by the end of the 2015-16 year. In all, the NDP government has spent $749 million from the fund in the past six years.

"We have paid off about $500 million in debt from the fiscal stabilization fund. This year we're making another payment of $85 million," Dewar said.

The minister said while the government is using the fund to pay down debt and fund some capital expenditures, it will "replenish the supply" as the economy grows.

"We'll build it up again," he said.

At the same time, he said, "There is still a lot of economic uncertainty out there; things could change…. We are expecting the economy to grow, and … things could change."

Dewar said another budget will be released before Manitobans go to the polls in a general election in April 2016. However, he wouldn't specify when that budget will be tabled.