‘Turn the Corner’ Budget
Highways Capital investment rises in Manitoba’s 2021 Budget
Budget Highlights
The highways capital program should reach roughly $505 million this year and remain at minimum $500 million over each of the next two fiscal years.
The core highways capital program rises to a total $398 million. The program level includes
- $22.9 million carry-over from unexpended funds for highways capital within Budget 2020
- incremental increase of $12.5 million, part of the 2019 election promise to move gradually to $400 million for the core highways cap program by 2023.
In addition, Manitoba Infrastructure has budgeted $107 million worth of work in 2021, out of the 2020 Economic Restart investment program, announced last May during the economic shutdown triggered by the pandemic.
Of the $500-million restart investment program, MI was to see a total $215 million over two years, but that has been extended now to three years, due to a slower rollout of projects. Some $16.5 million was expended last year.
The stated commitment to at least $500 million for highways capital for three years is welcome, but for the industry to plan, we need approximate budget forecasts and projects long-term. This does not set program levels in stone, but it – along with a tentative list of projects in the program — does allow the industry to set up, scale up their labour and supply plans.
Highways “base” budget | $375.0M |
2020/21 Carry forward | $22.9M |
MB Restart Program | $107.1M |
Maintenance & Preservation – Highways | $124.1M |
TOTAL | $629.1M |
We will remain intent on our push for an annual and five-year budget to be made public by Manitoba Infrastructure. This is considered a best practice and is followed at other levels of government. Minister Schuler in a Manitoba Chamber of Commerce hosted webinar was quite explicit in supporting a move to an annual and five-year capital program.
The department confirmed that any unspent dollars carried forward are not a first charge on the succeeding year’s budget and that is a significant continuation of what was started with budget 2020 and welcome.
Also in budget:
- $31 million has been budgeted by MI in water-control structures, the same amount budgeted in 2020-21
- $61.7 million for transfers to municipalities for “strategic infrastructure”, including roads and bridges
- $15.824 million to the Manitoba Water Services Board’s budget this year, the same as last year
Of importance to industry, the program for rehabilitation of pits and quarries will be $6.9 million in 2021
Other highlights
Deficit projection of $1.597 billion – an improvement of over $400 million as the most recent third-quarter projections forecasted a $2.08 billion deficit in the 2020-21 fiscal year.
- On the COVID-19 front almost $1.2 billion is budgeted for costs brought on by the pandemic, as well as contingency funds for future needs.
Real GDP expected to rise by 4.1% in 2021, followed by 3.6% in 2022. Real GDP fell by 5.3% in 2020.
The projected deficit for 2022-23 is $374 million, falling to a $209 million deficit for the 2024-25 fiscal year.
On the tax side, the big news was speeding up the elimination of education property taxes. Residential and farm properties will see their education property taxes reduced by 50% over the next two years (25% this year with an additional 25% the following year). Other property types such as commercial, industrial, railway and pipelines will see a 10% rebate.
The payroll tax exemption level is raised $250,000 to $1.75 million and the threshold for the reduced rate is increased $500,000 to $3.5 million. The annual tax savings to Manitoba businesses from the payroll tax changes is approximately $10 million and about 240 businesses will become exempt from the payroll tax. The basic personal exemption will rise by the rate of inflation.
Small Business Venture Capital Tax Credit will see the maximum eligible investment rising to $500,000. New changes will come into effect on December 1, 2021 in regard to online and e-commerce purchases. Online marketplaces, accommodation platforms and streaming services will be required to collect and remit the sales taxes, mirroring moves made by the federal government and several other provinces.
Further measures to advance the province’s economy include the creation of a new, private sector-led economic development agency and starting a tax competitiveness review.
Over $2.1 billion is scheduled for strategic infrastructure this year, represented as the largest amount in the province’s history. That is a projected $80 million increase over what was budgeted in 2020 and includes a commitment to new electric bus infrastructure in Winnipeg. Hopefully, this will free up the ICIP project approvals and flow federally leveraged funded projects across Manitoba over the next three years.
This is a ‘turning the corner’ budget. It attempts to ease the tax burden, freeing up money into the economy, harnesses infrastructure investment to spur growth and protects the social program fabric of programs.
To read Budget 2021 click here.
