COLUMN: Editorial – Bracket creep in Manitoba a black mark on Kinew’s record

Taxes, the deficit, planned spending and how the province plans to boost companies that will be affected by U.S. tariffs occupied much of the ink and airspace used to share provincial budget details last week.

For some, the pre-budget announcement of free provincial park entry in 2025 seemed more important than some of the budget details.

But as the saying goes, the devil is in the details, and with this budget one particular move by the NDP will cost citizens more money in an unfair fashion. This was highlighted in a March 20 press release from the Canadian Taxpayers Federation.

In 2017, Brian Pallister’s PC government eliminated bracket creep.

A phrase that isn’t exactly a household term, it is one of the most important ways to maintain fairness.

To his credit, Pallister saw that, and his government acted.

Bracket creep occurs when tax brackets are not adjusted annually for inflation.

Using 2024 numbers, the first bracket with taxation at 10.8 percent, topped out at $47,000 in taxable income. The second bracket went from $47,001 to $100,000, at 12.75 percent. Any money earned above $100,000 was taxed at 17.4 percent.

And it’s worth reminding readers that everyone is taxed at the low rate on the first $47,000 of earnings. Only money earned above that limit will receive higher taxation.

Indexing tax brackets was designed to recognize that thanks to inflation, the same amount of money will simply not purchase the same basket of goods.

If someone gets a cost-of-living increase at work equal to the rate of inflation, then their money should still go exactly as far. It will still cover the same basket of goods and services. While the total salary is higher, there is no change in their living conditions.

If, however, tax brackets are indexed to inflation, the system recognizes that more money doesn’t mean a higher standard of income. Every year tax brackets would increase by the rate of inflation, which would mean fairness in the tax system.

The NDP has stopped indexing tax brackets this year.

That means every year, more of Manitoban’s salaries will be taxed at a higher rate, even though in many cases their lifestyle remains the same.

A cost-of-living increase could result in higher taxes on part of their salary.

CTF Prairie Director Gage Haubrich called it out for what it is.

“The government shouldn’t be punishing taxpayers with a tax hike just for getting a cost-of-living pay raise,” he said. “Failing to adjust tax brackets to inflation is a stealth tax hike on Manitobans that will increase their tax bills every single year.”

And it’s one thing for governments to plead ignorance. For those who have never indexed the tax brackets to inflation, they can simply plead that they’ll adjust tax rates in response.

But this isn’t the case.

Brian Pallister’s government did the heavy lifting on this.

Indexing brackets was a done deal.

The NDP’s abrupt reversal, something they did not campaign or even make a case for in the past, is a sleazy, underhanded move, designed simply to take more money from Manitobans.

And it is significant.

The CTF says the bracket creep tax hike will cost taxpayers $82 million this year. That number will compound every year because of annual inflation.

The CTF has never shied away from their goal of lower taxes period.

But they make some valid points on this issue.

They say that a Manitoba family making $75,000 per year already pays more in provincial taxes than similar families living in British Columbia, Alberta, Saskatchewan or Ontario.

They point out that despite the province collecting higher taxes, they’re increasing their debt by $1 billion compared to last year’s budget. By the end of the year provincial debt will total $36.5 billion.

Interest payments alone will cost taxpayers $2.3 billion this year, working out to $1,544 per Manitoban.

Debt interest payments will cost taxpayers more than $6.4 million per day.

These are sobering numbers.

Sure, Manitoba has always had some debt. According to the Fraser Institute, the provincial government net debt in 1990-91 was $4.773 billion or about $4,040 per person.

Today our debt totals about $24,000 per person.

Even adjusting that 1990 amount for inflation, it would only amount to $8,500 per person.

It’s clear that we have enough issues without having government use underhanded ways to get more of our money.

“Taxpayers can’t afford the government wasting millions of dollars on debt interest payments every year,” Haubrich concluded.

He’s right and while sometimes a case can be made for tax increases, they should be debated publicly and done honestly.

Kinew and his NDP should know that Manitobans are not easily fooled or impressed by such an underhanded strategy.

Indexing tax brackets and eliminating bracket creep is the right thing to do.