Work to be done to strengthen economy: report
Manitoba’s economy is struggling when measured against those in Ontario and western provinces, a report prepared for the Manitoba Employers Council says. In particular, this province’s tax regime could use some improvement.
Manitoba finished last in taxes, GDP per-capita, interprovincial migration (having lost more than 61,000 residents since 2009) and average weekly earnings, when measured against Ontario, Saskatchewan, Alberta and British Columbia, the 2020 Manitoba Prosperity Report found.
“Manitobans still by far face the highest personal tax rates of any of the five provinces. A one income couple with $75,000 in employment income and two children would save over $3,000 in taxes if they lived in Saskatchewan,” the MEC report, released June 29 stated. “Our income tax brackets are uncompetitive, perhaps no better underlined than the majority of Manitobans are now in our highest income tax bracket.”
While the general corporate tax rate, at 12%, is tied for highest with B.C. and Saskatchewan, the report also notes that Manitoba is the only province among the five with a small business tax rate of 0% – all the other four have a small business tax.
However, Manitoba’s payroll tax is highest. Our unemployment rate is second-lowest, but private capital investment per capita is last. The provincial GDP is lowest among the provinces, as has been the rate of economic growth over the past decade.
The survey was conducted before the coronavirus shut down businesses in March and the report notes the economic impact of the pandemic means Manitoba faces higher deficits and debt levels now. To help Manitoba achieve its full prosperity potential, the report recommended the provincial government:
- reduce the size and cost of the provincial government;
- reduce the province’s debt load and work to eliminate the deficit;
- reverse interprovincial migration losses;
- increase post-secondary graduation rates;
- increase rates of entrepreneurship;
- further reduce red tape;
- reduce personal income taxes through rate reductions and increasing brackets;
- eliminate the payroll tax.
Manitoba Employers Council was established in 1980 and represents 24,000 individual employers and employer associations, who together account for more than 300,000 Manitoba jobs.
Click here to read the full report.
