CED in the Manitoba 2018 Budget

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On Monday, March 12, 2018, the Province of Manitoba released Budget 2018, it’s spending plans for the 2018/19 fiscal year. CCEDNet – Manitoba has conducted a review of the budget in respects to our membership policy priorities.

Read CCEDNet – Manitoba’s 2018 pre-budget consultations submission

Overall, the budget does not include any drastic spending changes for our member’s priorities but also doesn’t show investment or prioritization of our interests. There are small increases in priority areas, as well as decreases. The following analysis breaks down Budget 2018 by our member-led priority areas. CCEDNet – Manitoba looks forward to continue advocating our members’ policy priorities and working with the Government of Manitoba for more inclusive and sustainable communities and economies.

Highlights

  • Consultations for the new Provincial Poverty Reduction Strategy are ongoing. Budget 2018 states the strategy is being developed and does not provide a timeline for completion.
  • Budget 2018 is clear that a $25/tonne carbon levy is coming into place (projected to net approximately $260 M per year), however does not set a clear plan for recycling these revenues into GHG-reduction initiatives besides a one-time, $102 investment in an endowment fund for natural infrastructure.
  • Funding for Neighbourhoods Alive! has been maintained at $5.08 M (a slight funding decrease when factoring inflation).
  • Funding for Community Places has increased by 11%, from $5.17 M in 2017/18 to $5.74 M in 2018/19.
  • Effective March 12, 2018 (budget day), cooperatives are once again eligible to use the CED Tax Credit.
  • Budget 2018 maintains funding for the Northern Healthy Foods Initiative at $1.25 M.
  • Budget 2018 announced $3.3 M for new and newly funded childcare spaces, estimated to be 700 spaces, as well as $4.8 M in new funding for the Inclusion Support Program. Much of these increases can be attributed to the recently announced Canada-Manitoba Early Learning & Child Care Agreement.
  • Manitoba Housing & Renewal Corporation’s funding was increased by 8.3%, to $115.96 M from $107.05. This increase will be offset by a cut of $20 M to capital borrowing. No increases to the supply of affordable and social housing are planned.

More details about the 2018 Budget's impact in the following areas can be found below

Poverty Reduction
Community-Led Development
Energy and Sustainability
Social Enterprise
Co-operative Development
Justice and Community Safety
Child Care
Food Security and Sovereignty in Northern Manitoba
Housing
Social Innovation and Social Impact Bonds


Poverty Reduction

Read Make Poverty History Manitoba's response to Budget 2018

CCEDNet – Manitoba’s membership and our partner organizations have called upon the Province to release a new comprehensive poverty reduction strategy, with targets and timelines for implementation.

Consultations for the new Provincial Poverty Reduction Strategy are ongoing. Budget 2018 states the strategy is being developed and does not provide a timeline for completion.

Spending on Employment, Income Assistance and Rental Assistance is budgeted to decrease from $523 M to $511 M. CCEDNet – Manitoba has been advised that this is not to be seen as a cut, but an expected reduction in demand for the programs. CCEDNet – Manitoba will seek to clarify what data supports this expectation, out of concern a reduction in EIA spending will harm low-income Manitobans.

The Province is contributing an additional $7 M to index RentAssist to median rates.

There is no increase to assistance rates for low-income Manitobans in Budget 2018. As highlighted by Make Poverty History Manitoba, current EIA rates leave recipients with income that falls as much as 47 percent below the poverty line for single individuals.

Budget 2018 commits to increases the Basic Personal Amount tax credit available to all Manitobans by $1,010 in each of the taxations years 2019 and 2020.

Community-Led Development

Funding for Neighbourhoods Alive! has been maintained at $5.08 M (a slight funding decrease when factoring inflation).

Funding for Community Places has increased by 11%, from $5.17 M in 2017/18 to $5.74 M in 2018/19. CCEDNet – Manitoba will continue to monitor these programs to advocate this funding is spent in the highest value way: long-term, stable agreements with community organizations.

Earlier this year, funding for the Manitoba Community Services Council was cut. After an early lack of clarity, government has committed to continuing to spend the funds that were delivered by this organization. The budget shows this money is still allocated to community development but there remains a lack of clarity about how these resources will be deployed now.

Budget 2018 made no mention of the NPO Strategy. CCEDNet – Manitoba will seek clarity about the agreements that were grouped under this program, and will continue to call for long-term, stable funding for community organizations.

The Communities Economic Development Fund (a crown corporation with a mandate to encourage economic development in Northern Manitoba) has been cut by 30%, from $1.43 M in 2017/18 to $1.00 M in 2018/19.

Energy and Sustainability

Budget 2018 is clear that a $25/tonne carbon levy is coming into place (projected to net approximately $260 M per year), however does not set a clear plan for recycling these revenues into GHG-reduction initiatives.

The Province has committed to creating an endowment fund for natural infrastructure (managed by the Winnipeg Foundation and administered by the Manitoba Habitat Heritage Corporation) through a one-time investment of $102 M. The Winnipeg Foundation has averaged 7.10% returns over the last 10 years, suggesting this endowment will generate approximately $7.2 M per year in funding for spending on natural infrastructure.

The remaining revenues from the carbon tax pay for tax reductions in others areas, although Budget 2018 also highlights investing $40 M in green projects. It is unclear how this investment connects with revenues from the carbon tax.

CCEDNet – Manitoba members have advocated that these revenues should be used for energy efficiency efforts and job creation in low-income neighbourhoods and in First Nations.

Social Enterprise

Social enterprise is featured in the poverty reduction strategy section of the budget, highlighting Manitoba Housing’s social impact procurement. Manitoba Housing practice of social procurement is the Province’s most significant support for social enterprise. Since 2016, Manitoba Housing has been procuring approximately $7 M from social enterprises hiring individuals facing barriers to employment.

Budget 2018 (as well as the most recent Throne Speech) reference a “social impact procurement strategy.” At this time it is unclear what this strategy is. CCEDNet – Manitoba will continue to work with the Province to see this practice grown and expanded to more operations than Manitoba Housing.

The Province has announced changes to the Labour Market Transfer Agreements with the federal government, noting increased flexibility in program and client eligibility, which the Province says will “support those furthest from the labour market with training and work experience.” CCEDNet – Manitoba looks forward to following this file and seeing how our members can take utilize this program and these changes.

Co-operative Development

CCEDNet – Manitoba members strongly support co-operatives as they create economic democracy, root ownership locally, distribute profits equitably and often create jobs and services in communities where they are otherwise lacking. Unfortunately, Budget 2018 does not prioritize co-operative development.

Budget 2018 decreases funding for Co-operative Development by 6.7%, from $386,000 in 2017/18 to $360,000 in 2018/19. Spending on Salaries and Employee Benefits increased from $312,000 to $316,000, and spending on Other Expenditures decreased from $74,000 to $44,000.

Effective March 12, 2018 (budget day), co-operatives are once again eligible to use the CED Tax Credit.

The Credit Unions Special Deduction is being eliminated. This special tax deduction allowed credit unions and caisses populaires to pay a lower rate of tax on a portion of their income. This is being phased out over five years, which once fully removed will end up costing credit unions and caisses populaires in Manitoba $15 M per year.

At the same time, the Credit Unions and Caisses Populaires Profit Tax, currently a 1 percent profits tax on taxable income over $400,000, is being eliminated, providing approximately $1 M per year in tax relief between Manitoba credit unions and caisses populaires.

Justice and Community Safety

Ahead of releasing this year’s budget, the Province of Manitoba announced plans to modernize the criminal justice system, with an emphasis on prevention through community partnerships, restorative justice and reducing recidivism through responsible reintegration. CCEDNet – Manitoba was pleased to hear this news, as our members have called on the Province to reverse the trend towards increased incarceration and instead focus on addressing the root causes of crime.

While budget documents highlight small investments in community-based crime prevention programs ($250,000), it seems Budget 2018 does not prioritize the strategy identified in this press release. Budget 2018 slightly decreases funding to Community Corrections by $68,000 (from a $32.3 M budget allocation), and decreases funding to Crime Prevention by $69,000 (from a $2.4 M budget allocation). Custody Corrections and Policing Services & Public Safety received funding increases of $2.55 M and $35 M, respectively.

Child Care

The following draws upon analysis completed by the Manitoba Child Care Association

Budget 2018 announced $3.3 M for new and newly funded childcare spaces, estimated to be 700 spaces, as well as $4.8 M in new funding for the Inclusion Support Program. Much of these increases can be attributed to the recently announced Canada-Manitoba Early Learning & Child Care Agreement.

Total funding for Early Learning & Child Care increased by 5.4%, from $175.7 M in 2017/18 to $185.1 M in 2018/19. As highlighted by MCCA, it is likely most or all of this increase comes from the recently signed agreement with the Federal government.

As further highlighted by MCCA, with 16,702 names on the Manitoba Online Child Care Registry (as of Aug/16), a rate of 700 new spaces per year means this waiting list will be eliminated in 22 years.

The province also announced a Child Care Development Tax Credit, a refundable corporate tax credit meant to stimulate the creation of licensed child-care centre spaces in private workplaces. The tax credit provides up to $10,000 per space over 5 years, with pick-up for the program capped at 200 spaces.

Food Security and Sovereignty in Northern Manitoba

Budget 2018 maintains funding for the Northern Healthy Foods Initiative (NHFI) at $1.25 M.

Further to Northern food security, Budget 2018 highlights the Affordable Food in Remote Manitoba program (AFFIRM), a retail subsidy for communities with rail and fly-in access only who do not receive Federal Nutrition North Canada subsidy. At this time, we are unable to comment on the program, as budget documents do not specify the amount of funding AFFIRM receives, nor its demand, pick-up or outcomes.

Housing

See the Right to Housing Coalitions's budget analysis here.

Manitoba Housing & Renewal Corporation’s funding was increased by 8.3%, to $115.96 M from $107.05. The budget documents state “Manitoba Housing is maintaining existing capital spending on maintenance and improvement of it social and affordable housing stock, and new construction.” As Make Poverty History Manitoba has noted, this increase will be offset by a cut of $20 M to capital borrowing and no increase in new supply of social or affordable housing.

The budget comments that development of a Provincial Housing Strategy is underway.

Budget 2018 does not mention the expiring Federal operating agreements that threatens to pull many affordable co-op housing units off the market.

The Rental Housing Construction Tax Credit is being eliminated, estimated to provide the Province with $3.1 M in new revenues. As highlighted by the Right to Housing, "this tax credit was introduced in 2013 to stimulate the construction of rental housing and increase the supply of new affordable rental housing units. The tax credit was worth up to 8% of the capital cost of new rental housing construction by the private, non-profit, and co-op sectors. Eligible projects required at least 10% of constructed units to have affordable rents."

Social Innovation and Social Impact Bonds

Budget 2018 reiterated the provincial government’s commitment to pay-for-performance models such as social impact bonds. The first SIB will be in child welfare, aiming to improve outcomes for children and families at-risk of coming in contact with the child welfare system. It’s unclear how much money is being budgeted to develop this financing tool.

Other Organizational Budget 2018 Responses

Province: 
Manitoba
Categories: 
Government
Policy Development & Advocacy