By: Josh Brandon
FOR more than a decade, Manitoba has persisted as the province with the highest rates of child poverty in Canada. This sad record consigns tens of thousands of children to reduced opportunities in education, employment and social participation. Poorer health outcomes as a result of child poverty last over generations.
Budget 2023 could have offered a sharp inflection point in the fight against child poverty. Increased revenues from a growing economy and federal transfers gave the province ample resources.
Unfortunately, investments in the areas of housing, mental health, income supports or child welfare are insufficient to the scale of the crisis. Instead, the provincial government has elected to devote its scarce resources to providing Manitobans with broad-based tax cuts that will do little to affect the rates of child poverty in the short term.
The budget offers nearly $1 billion in tax cuts, including $486 million in income tax reductions and $453 million in education property tax rebates.
However, very little of this windfall is likely to find its way to the families who need it most. While increasing the Basic Personal Amount to $15,000 will save most Manitobans an average of $448 this year, at least 271,000 Manitobans will not see any benefit, as their incomes were already too low to pay income tax. Another 47,000 low-income Manitobans will see only a partial benefit from the BPA increase, since their incomes were on the cusp of not paying provincial income tax.
Moreover, the largest tax cuts will go to Manitobans earning more than $100,000 per year, who will see tax reductions of nearly $1,400 once the changes in income tax thresholds go into effect in 2024. Only the richest3.3 per cent of Manitobans falling in this upper-income tax bracket will see the benefit of this tax break.
Wealthier families are also more likely to own more expensive properties and see a greater share of the education property tax rebates, which rise to 50 per cent this year.
While the rising prices as a result of high inflation are affecting all Manitoba households, families in the highest tax brackets face only choices about which luxuries to defer. For families in the lowest income groups, decreasing affordability forces decisions about which basic necessities to curtail. When prices for rent, electricity and groceries are all increasing even faster than inflation, the need for targeted relief is even greater.
Broad-based tax cuts also leave little room for long-term investments in the services and programs that will help alleviate poverty.
A good example is the mismatch between commitments made to address homelessness and the lack of resources for affordable housing. Just last month, the province committed to create 700 units of affordable housing, including 300 units of new construction. Meanwhile, Budget 2023 allocates only $51 million to its homelessness strategy. Given the high cost of construction, it is difficult to see how the government will realize its promise with this level of support.
The fact that the budget documents locate the homelessness strategy as part of its project of “safer streets,” rather than within a rights-based approach to ending homelessness, also raises concerns about how the government will tackle the issue. By positing homelessness as a security issue, there is a risk that the government will continue to apply ineffective responses that only perpetuate it.
Another area that continues to see inadequate investment is mental health. International experts, such as the World Health Organization, have recommended that advanced economies like Canada need to direct at least 10 to 12 per cent of the health budget to mental health. These needs have only grown during the pandemic.
In Manitoba, we are spending less than half this level. Meanwhile, community-based mental-health providers accessible in low-income communities are starved of the resources they need. Treatment options for mental health and addiction and harm-reduction resources, such as supervised consumption sites, need to be part of a continuum of care to provide low-income families the tools they need to thrive.
In Manitoba, low income is linked to several negative child-health outcomes, including increased risk of preterm birth, child mortality, dental extraction and suicide. These effects are compounded by long-standing patterns of colonialism and racism.
As a result, these impacts are hardest felt by Indigenous communities that experience poverty at double the rate of non-Indigenous households. Budget 2023 could have done much more to reduce these historic inequities; instead, the government has opted for historic tax cuts.
Josh Brandon is a community animator with the Social Planning Council of Winnipeg.
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