Promises aplenty ahead of Manitoba election

Promises aplenty ahead of Manitoba election

Tax cuts, rate freezes and incentive programs on offer
Monday, September 18, 2023

Manitobans are hearing promises aplenty as political parties offer up tax cuts, rate freezes and incentive programs ahead of next month’s provincial election. A mix of proposals aimed at business operating expenses and affordability for consumers could have potential impacts for commercial and multifamily landlords.

The presumed leading contenders — the incumbent Progressive Conservatives (PCs) and official opposition New Democratic Party (NDP) — are targeting somewhat different voter demographics, but both pledge to retain Manitoba’s education property tax rebate in some form. Meanwhile, the Liberals say they will overhaul the property tax system and largely dismantle the rebate except for low-income and small property owners, seniors on fixed incomes and people with disabilities, who would be eligible for more generous disbursements than are currently available.

Both opposition parties are critical of the universal nature of the rebate, which the Manitoba government introduced in 2021. (At the time, it was presented as a step toward eventually uploading responsibility for education funding from a patchwork of school districts to the provincial tax base.) The Liberal platform notes that “many cheques are being sent to commercial landholders and institutional investors outside of Manitoba”, while the NDP commits to “stop the PCs’ practice of handing out rebate cheques to billionaires”.

However, the NDP promises to continue a 50 per cent rebate of education property taxes for residential and farm ratepayers. It also pledges to “bring in stronger rent control” and to boost the tax credit for renters to $700 from the current $525 annual amount.

Conservatives pad platform with tax cuts

The PCs are appealing to business operators with a promise to eliminate the provincial payroll tax by 2032. Currently, employers with annual payrolls in excess of $1.5 million are subject to the levy, which goes toward funding health care and post-secondary education. Companies with annual payrolls in the range of $1,500,001 to $3 million are exempted for the first $1.5 million and taxed at 4.3 per cent on the remainder, for a maximum of $64,500, while companies with payrolls exceeding $3 million are taxed at 2.15 per cent on the entire amount, garnering upwards of $64,500.

In announcing the envisioned phase-out, which would cut the tax rate by 50 per cent over the next four years, the governing party calls it an “anti-competitive” tax. “This tax has been deterring business from coming to Manitoba or expanding in our province,” maintains Manitoba Premier Heather Stefanson.

The PCs are also promising to exempt first-time homebuyers from the provincial land transfer tax, which is currently equivalent to 2 per cent of the purchase price of properties valued at $200,000+. Graduated tax rates from 0.5 to 1.5 per cent are levied on transactions valued between $30,000 and $199,999.

Commercial and multifamily landlords are among the potential beneficiaries of another small tax perk in the PCs’ list of promises, which would eliminate provincial sales tax (PST) on the purchase of trees, plants and flowers. That would add some of the mainstays of decorative groundskeeping in with the fruit and vegetable plants that are already exempt from PST.

NDP disdains demand-response pricing for electricity

The NDP is promising to hold the PST steady at 7 per cent, cut the vehicle gas tax by $0.14 per litre and freeze hydro rates for 2024. It has also declared it will ban surge pricing (also known as time-of-use) for electricity, even though that rate structure is not yet available in Manitoba.

This pre-emptive strike responds to Manitoba Hydro’s recently unveiled long-term strategic plan, which calls for consideration of the demand-response pricing model that many other jurisdictions have already adopted. For example, Ontario introduced time-of-use rates for residential, small business and farm electricity customers in 2006 and is in the process of adding a new ultra-low overnight pricing option.

“Current rate structures do not incorporate any seasonal or time-varying differences in cost or value. Some utilities have more complex rate structures in place, which allow the utility to provide more dynamic pricing with the goal of shifting energy use to lower-demand times in the day,” Manitoba Hydro’s plan states. “Price signals allow the customer to take advantage of lower-cost periods, which enables the utility to improve the overall effectiveness of managing the grid.”

The NDP serves up a less complete explanation in its campaign information — characterizing surge pricing as a mechanism that “will increase hydro rates for Manitobans during times of peak demand, like on the hottest and coldest days of the year.”

Liberals and Greens offer energy efficiency incentives

The Liberals are promising a $300-million fund to subsidize: residential and commercial energy retrofits; new electric vehicle charging stations; development of wind and solar power generation; and programs to reduce greenhouse gas emissions in the agricultural sector. Another $15 million is additionally earmarked for an initial investment in cleaning up toxic properties.

The party also proposes to create 10,000 new units of housing for residents with low incomes over the next 10 years. Partnerships with private landlords, other levels of government and other organizations would be encouraged, and units could be procured through purchase of existing buildings, direct new development or offering incentives to private developers in return for longer-term access to a portion of units in their new multifamily projects.

Under a Liberal government, businesses that pay corporate tax in the province would be compelled to declare their beneficial owners, and this information would be made public in a searchable online registry. To support financially stressed business operators, the Liberals pledge to establish a “debt compromise board”, which is promoted as “a forum where they can meet with their lender to find ways to restructure debts”.

The Green platform has fewer specifics, but promises new incentives to upgrade insulation in existing buildings. The Greens would also amend the building code to mandate “super-efficiency insulation standards” and provisions for on-site renewable energy generation in new construction, and would halt the expansion of natural gas services for residential heating.

The party pledges to “offer support to businesses interested in making the transition to renewable energy” but to “only support commercial development and operations that demonstrate a strong commitment to preserving and protecting ecosystems”.

Election day is October 3.

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