Procedural legislation required to implement budget tax cuts and bolster the provincial economic stimulus plan was introduced today by Finance minister Greg Selinger.
“This legislation would help bolster our economic stimulus plan while providing Manitoba families and businesses with strategic tax relief as we work to keep Manitoba one of the most affordable places to live, work and do business,” said Selinger.
The Budget Implementation and Tax Statutes Amendment Act (BITSA) is the legislative authority under which the provincial government reduces taxation levels and implements other budgetary measures.
In response to economic uncertainty, the bill also proposes flexibility on the province’s debt payment by suspending for three years the minimum annual payment of $110 million. This year, in order to respond to the uncertain economy and bolster the province’s economic stimulus plan, Budget 2009 allows for $90 million from the debt payment to be redirected towards the cost of infrastructure renewal. The budget continues with a $20-million debt payment this year.
“In Manitoba, we chose not to run a deficit this year,” said Selinger. “Our budget invests in the knowledge economy and continues with strategic, affordable tax cuts that will help maintain the purchasing power of families and the financial strength of business.”
Budget 2009 projects a $48-million summary financial surplus that includes core government departments, Crown corporations and pension obligations while making a payment of $20 million to reduce debt and pay for pension liabilities. The budget projects a Fiscal Stabilization Account balance of $634 million at the end of 2009-10 after a $110-million draw to ensure vital services in health, education and training are maintained.
The BITSA bill would implement several important tax and other measures including:
· dropping the small business tax rate to zero before the end of 2010, down from eight per cent in 1999;
· increasing the basic Education Property Tax Credit in 2009 to $650 from $600;
· allowing tax-free savings account holders to designate beneficiaries outside of a will;
· allowing individuals to earn tax credits on shares acquired in their tax-free savings accounts when issued by a labour-sponsored fund or under the Community Enterprise Development Tax Credit program;
· reducing the fuel tax on domestic cargo flights and extending the full refund on international cargo flights to direct and indirect flights to and from the United States;
· extending the fuel tax exemption for logging to include fuel used for forest renewal;
· preventing the clawback on individual personal tax credits due to registered disability savings plan drawings;
· extending the Manitoba Mineral Exploration Tax Credit for three more years, doubling the credit in 2009 and tripling it in 2010;
· reducing the mining tax to 10, 15 and 17 per cent from 18 per cent, depending on taxable income;
· introducing the Advanced Level Apprenticeship Hiring Incentive; and
· extending the Odour Control Tax Credit and the components of the Co-op Education and Apprenticeship tax credits.
Selinger said the tax decreases in Budget 2009 total $121 million and, when combined with those announced since 1999, Manitobans and businesses are now saving more than $1 billion in taxes annually. Selinger also said an expanded research and development tax credit will be made refundable in 2010.