Tomorrow, Paul Martin will be delivering a fiscal update but, unlike other years, it will include a mini-budget. Hopefully, “mini” won’t be the guiding objective for establishing a direction for Canada’s budgetary stance. What we need is a “maxi” plan to address the critical long-term economic issues faced by Canada.
If you look solely at provincial income taxes, including medicare premiums, Manitoba looks bad. Its taxes are the highest in Canada, followed by Quebec and Saskatchewan. But if you add in the costs of provincial sales and gasoline taxes (lower in Manitoba and Saskatchewan than elsewhere), the picture changes.
It makes no sense to drive away your best revenue sources with uncompetitive tax rates.
The burgeoning beast known as the Celtic tiger is more proof that tax cuts can pay for themselves and more.
Alberta’s plan for a flat provincial income tax has merit.
Manitoba and Saskatchewan are losing brainpower workers to other parts of the country because their taxes are too high.
The only plan that comes closest to the major tax cuts needed to discourage movement of our most valuable tax base – well-paid and educated people — to Alberta and Ontario and to compensate Manitobans for years of bracket creep.
Despite many grounds for optimism, new threats to Manitoba’s competitiveness are building. Substantially lower taxes in Alberta and Ontario will pull jobs and investment from our economy.
The great divide between the public and private sectors, in terms of productivity and efficiency, continues to expand.