Falling Further Behind

Media Appearances, Equalization, Frontier Centre

Manitoba continues to be the highest taxed jurisdiction in Western Canada and nearby U.S. states, according to the latest Frontier Centre for Public Policy report.

Worse, Manitoba has fallen further behind its neighbours in recent years, making it even less competitive than it was before.

The Frontier Centre measures the total tax load — including personal taxes, consumption taxes and business levies — of jurisdictions and compares them from year to year.

The think-tank compares the four Western provinces, Ontario and the U.S. states of North Dakota, Minnesota, Montana and Washington.

Manitoba is last in the West and doesn’t even come close to the low-tax regimes south of the border — jurisdictions that we compete with for capital and skilled labour.

“Despite small reductions for 2006, Manitoba remains Western Canada’s tax load champion, with punitive capital taxes, and the highest tax rate on small businesses,” the report says.

Manitoba’s tax load is double that of Alberta’s and we’re now slipping away from Saskatchewan.

Since 1999, Manitoba has lowered its tax load by only 6%, while Saskatchewan has cut its taxes by 11%, Alberta 14% and British Columbia 18% during that same period.

While the Doer government has made some small tax reductions, they have not kept pace with the tax cuts in other jurisdictions. That makes us less competitive and less attractive for companies to stay or relocate here.

“The impacts of Manitoba’s uncompetitive tax rates are predictable — lower growth rates in income, population and investment,” the report says.

At the same time, Manitoba is becoming more reliant on federal government transfers, the report found.

Since 1999, federal transfers in Manitoba have grown 50% faster than the local economy. They have increased by 45% since 1999 while own-source revenues have grown by only 30% during that period.

Which means we are becoming increasingly vulnerable to the policy decisions of Ottawa and more dependent than ever on the economic strength of our neighbours.

It’s hardly the position of strength we should be striving for.

The Doer government should spend more time on serious economic issues like this and less time on bogus marketing exercises like the “Spirited Energy” campaign if it truly wants to make Manitoba a better place to live.