Fiscal update impacts on Manitoba

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This article was published 14/12/2021 (1176 days ago), so information in it may no longer be current.

OTTAWA — Tuesday’s federal fiscal update revealed five items that will have an outsized impact on Manitoba:

1) Baby bonus to drop

Ottawa projecting a seven per cent drop in Canada Child Benefit payments between the 2021 and 2023 fiscal years, due to income growth and the conclusion of a COVID-19 bump-up.

This year, the $1-billion drop from last year amounts to 3.6 per cent less, despite the November throne speech pledging the benefit would “continue increasing to keep up with the cost of living.”

The baby bonus program has an outsized impact in Manitoba, which for years has had the worst child poverty rates among the provinces. The Liberals have opted against rectifying a drop in payments this year for low-income families who received pandemic benefits last year.

2) Carbon-tax cash for businesses

Tuesday’s fiscal update follows through on a spring pledge to remit money from the carbon tax on agricultural fuels to farmers, which caused a months-long standoff between Ottawa and the Prairie provinces.

The rebate starts in March 2022, and would amount to a combined $100 million for the first year for the four provinces subject to the federal backstop: Ontario, Manitoba, Saskatchewan and Alberta.

Ottawa has also announced plans to rejig its formula for remitting carbon levy revenue to those provinces, which currently sends 90 per cent of revenues to people in cheques, and 10 per cent on green retrofits. Starting in March 2022, part of the money will go to small businesses, with details to come in the new year.

3) Push to clear immigration backlogs

Ottawa has earmarked $85 million clear a backlog in processing immigration applications, to be spent by March 2023.

The funding will target permanent and temporary resident applications, but clearing that gap will likely make it easier for Ottawa to meet Manitoba Premier Heather Stefanson’s request for an increase in provincial nominee quota.

4) First Nations set for massive foster-care package

The Liberals had scant details on their plan to allocate $40 billion for compensating First Nations and reforming foster care, but Tuesday’s fiscal update shows plans for an infusion of $20 billion by March, and around $4 billion in subsequent years.

The funding would come as part of ongoing negotiations surrounding Ottawa being ordered to pay First Nations families whose children were disproportionately placed into child welfare due to federal underfunding.

For years, Manitoba has had one of the highest child apprehension rates in Canada, and this payment would likely have an outsized impact in the province, particularly for large families living on reserves.

5) No rise in health-care transfers

Ottawa raised its health-care spending last year to make up for the COVID-19 pandemic, but tabled figures that would put its payments to provinces back to the pre-pandemic trend.

That means a drop from last year’s $45.9 billion to $43.1 billion this fiscal year and $45.2 billion in the next. Those are all higher than the transfer’s 2019 spending of $40.4 billion, but does not keep up with rising costs.

Premiers have asked Ottawa for years to restructure the health-care transfer, and Stefanson said it is her top federal priority. Prime Minister Justin Trudeau has said he’d consider that after the COVID-19 pandemic abates.

dylan.robertson@freepress.mb.ca