Little relief on Manitoba horizon as inflation pressure mounts

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This article was published 25/06/2022 (872 days ago), so information in it may no longer be current.

With one of the largest cost-of-living increases in Canada, Manitobans are feeling the sting of inflation — and shouldn’t expect relief any time soon.

Statistics Canada reported last week the consumer price index in Manitoba rose 8.7 per cent year over year in May. It was second to only to New Brunswick and Nova Scotia where the cost of living increased 8.8 per cent; the national average was 7.7 per cent.

Results of an Angus Reid Institute survey released Friday showed 57 per cent of Manitobans are “struggling” or “uncomfortable,” according to the pollster’s “economic stress index.”

No immediate financial help is expected from the federal or Manitoba governments, who’ve both said they’re relying on measures announced in spring budgets to cope with inflation.

Finance Minister Cameron Friesen says the provincial budget’s education property tax rebate and residential tenants tax credit are making life more affordable for Manitobans in inflationary times.

In a news release Thursday, he trumpeted the Progressive Conservative government’s tax cuts arriving at so-called “Tax Freedom Day” — the date the average person has earned enough money to cover annual income taxes — on June 4, ahead of every other province.

When it comes to its handling inflation, however, the conservative government didn’t get high marks in the Angus Reid survey, in which 87 per cent of Manitoba respondents said it was doing a “very poor” or “poor” job.

Provinces that have offered help fared a bit better.

In Alberta, which instituted a gas tax holiday in April and monthly $50 utility rebates, and Quebec, which sent out a one-time payment of $500 to those with a net annual income of less than $100,000, 71 per cent of respondents said their provincial government was doing a “poor” job.

In Saskatchewan, which offered a housing benefit for those spending 35 per cent of their income or more on rent, 68 per cent of respondents said the province was doing a “poor” job.

Friesen has ruled out a “gas tax holiday” on the 14 cents per litre Manitoba collects, and said Wednesday the province has called on the federal government to act.

Ottawa collects three taxes on gasoline: an excise tax, five per cent GST and a carbon levy.

“The federal government makes out like bandits when the price of gas goes up,” Friesen said. Canadians paid 48 per cent more for gasoline in May than a year earlier.

Economists say there are several measures the province could take to quickly offer relief.

“Increasing the employment and income assistance rates and the rent assist program in Manitoba, or sending one-time top-ups for those benefits, is a way to do that,” said University of Manitoba economics Prof. Jesse Hajer.

“You could do this in a targeted way that didn’t didn’t end up wasting resources by getting it to the lowest-income households,” said Hajer, a researcher with the Canadian Centre for Policy Alternatives.

A fellow U of M economics professor with a more conservative bent said social assistance benefits should be adjusted to keep up with inflation.

“That would certainly help people who are facing a problem,” said Gregory Mason.

These are “tricky” times, Mason said. “Central banks are raising rates in a desperate attempt to contain the contagion. If our inflation rate continues to increase we can expect another rate increase, which could precipitate a crisis for recent housebuyers.”

A gas tax holiday would offer only “slight relief” and would add to Manitoba’s deficit, Mason added.

Hajer was also dismissive of putting the breaks on the gas tax. Using cuts (such as the education rebate) to help people cope with soaring prices helps the well-off more than those suffering the most, he said.

“When we use across-the-board tax cuts that aren’t capped and are proportional to how much wealth someone has in the form of property, then you get a very unequal distribution of that benefit. Those who hold very expensive properties get a lot of money, and those who have very low-value properties or may not own property at all, get a much lower benefit,” said Hajer.

“I think that goes against what Manitobans would expect: that if we are going to provide relief to people in these circumstances, that relief should be targeted. It should be going to those who who are struggling, as opposed to those who are already well-off.”

NDP Leader Wab Kinew said Friday the province could and should give Manitobans a break.

“We know that there’s more than $600 million in the COVID contingency fund in this year’s budget,” said Kinew, noting the province has scaled back its pandemic spending.

“There’s a lot of different ways that you could help people with the the price of gas or groceries, and people who have to take transit,” he said. “Manitoba Hydro is on track for a banner year in terms of revenue.

“We should see, at the very least, a commitment that we’re not going to get more Hydro increases from this government.”

— with files from Danielle Da Silva

carol.sanders@freepress.mb.ca