Newspaper article The Canadian Press

Prudent Budget: Manitoba Cuts Tax Credit for Students, Holds Line on Spending

Newspaper article The Canadian Press

Prudent Budget: Manitoba Cuts Tax Credit for Students, Holds Line on Spending

Article excerpt

Manitoba budget makes small dent in deficit

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WINNIPEG - Post-secondary graduates are taking a financial hit in a relatively stand-pat budget tabled by the Manitoba government Tuesday that holds the line on spending and makes a modest dent in the deficit.

The budget forecasts an overall deficit of $840 million this fiscal year -- $32 million less than last year.

The biggest change is the phase-out by next year of an income-tax rebate on tuition for post-secondary graduates who stay and work in the province. It's worth up to $2,500 a year per person and was introduced by the former NDP government as an incentive to keep grads from leaving.

"We can't continue to support programs that have no demonstrable positive effects and there was no data or support for that program's efficacy," Premier Brian Pallister said.

The Canadian Federation of Students said the rebate is badly needed by students who graduate with big loans.

"We've already gotten so many messages today from people who ... don't know what they're going to do to be able to pay off their student debt," said spokesman Michael Barkman.

There are no increases to personal or business taxes, but a number of tax credits are to be capped or cut.

A tax credit for research and development is being reduced to 15 per cent from 20. And a credit for unpaid caregivers who help relatives stay in their own homes is being capped for the first time at $1,400 a year.

One tax credit is to be increased. The maximum credit for donations to politicians and political parties is rising to $1,000 from $650.

"It's actually now more in balance with the other provinces across the country," said Pallister, whose government earlier announced it is raising the maximum annual donation people can make to politicians to $5,000 from $3,000.

The budget keeps a leash on spending in major departments at or near the rate of inflation. …

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