Manitoba tax change to help most people despite raising more money, premier says

WINNIPEG — Manitoba Premier Wab Kinew continued to promote a property tax change Friday that has been criticized by the Opposition as a tax grab on the middle class. 

Kinew held a press conference in suburban Winnipeg to highlight the tax change, which was announced in last week’s provincial budget.

Roughly 83 per cent of homeowners will pay less under the new system, Kinew said, even though the tax change is forecast to garner the province an extra $148 million a year.

“When we campaigned (last fall), we talked about the middle class, because we want to make a difference for the average Manitoban,” Kinew told reporters.

“And I know Manitobans have been strained these last few years.”

The budget eliminates, as of next year, a combination 50 per cent rebate and $350 credit for education taxes on residential properties. A 10 per cent rebate on commercial properties is also eliminated.

Under the new system, the government will provide a flat $1,500 credit for residential homeowners. Owners of rental apartments, as well as commercial property owners, are not eligible for the credit.

It’s a change that the government says will bring savings to owners of homes assessed at less than $437,000 — depending on the local school tax rate — and will see owners of homes assessed above that level pay more.

The break-even point is lower in school divisions such as Winnipeg and Seven Oaks, where the local mill rate is higher than the provincial average.

The Opposition Progressive Conservatives said Kinew’s comment that 83 per cent of homeowners will save money is wrong, because many suburban homes are valued at more than $437,000.

“We’re not talking about the ultra-wealthy here. We’re talking about the middle class,” Tory finance critic Obby Khan said.

Data from the City of Winnipeg shows there are tens of thousands of homes in the city assessed above the $437,000 level.

The government’s estimate that 83 per cent of homeowners will pay less under the new system is also based on a comparison between next year’s flat $1,500 credit to refunds and credits issued last year, Finance Minister Adrien Sala’s office said in a written statement Friday.

The Tories have said that data is outdated, because school taxes, along with the 50 per cent refunds, are increasing this year in many areas.

Kinew stood outside a bungalow in the St. Vital neighbourhood assessed at $359,000 to make his remarks. On an adjacent street, several homes have been assessed at more than $500,000, the city’s website shows.

Khan said the fact Kinew held a news conference to reannounce a budget measure is a sign the NDP government is already feeling heat on the tax change.

A political analyst said the tax change may not go over well in some of the suburban constituencies that switched from the Tories to the NDP in last year’s provincial election.

“In many ways, the NDP were elected as a rejection of the past administration and, secondly, concerns over things like health care,” said Christopher Adams, an adjunct professor of political studies at the University of Manitoba.

“So right now, the NDP is putting in these changes. They might be forgotten by the time the next election comes around, but I suspect there will be some blow back in some of the middle-class neighbourhoods of Winnipeg.”

The NDP has made affordability a key theme of its time in office so far, with measures that include a temporary suspension of the provincial fuel tax, slated to run until the end of September.

Kinew said the property tax changes will make the system more progressive, because people with lower-value homes will pay less and those with high-value homes will pay more.

He also said the government cannot forego a lot of revenue, because of the province’s string of deficits.

“We’re also addressing the issue we inherited around a structural deficit and the chronic underfunding of education in Manitoba.”

This report by The Canadian Press was first published April 12, 2024.

Steve Lambert, The Canadian Press