Manitobans hit with stealth tax hike due to bracket creep

Manitobans are facing a hidden tax increase as the provincial government eliminates inflation-based adjustments to income tax brackets and the basic personal amount, a move known as bracket creep.

The Canadian Taxpayers Federation (CTF) is criticizing the decision, arguing that it will automatically push taxpayers into higher tax brackets due to inflation, even though their purchasing power remains the same.

“The government shouldn’t be punishing taxpayers with a tax hike just for getting a cost-of-living pay raise,” said Gage Haubrich, CTF Prairie Director.

“Failing to adjust tax brackets to inflation is a stealth tax hike on Manitobans that will increase their tax bills every single year.”

The bracket creep tax increase is expected to cost taxpayers $82 million this year, with the financial burden compounding annually as inflation continues.

Manitoba originally introduced tax bracket indexing in 2017, and the decision to end it means that a Manitoba family earning $75,000 per year will now pay more in provincial taxes than families with similar incomes in British Columbia, Alberta, Saskatchewan, or Ontario.

“The government should be cutting taxes to help Manitobans deal with the rising cost of living, not hiking taxes,” Haubrich said. “It’s the worst time for the government to start taking more money out of Manitobans' pockets through bracket creep.”

Despite the increased tax revenue, the province is also adding $1 billion to the debt compared to last year’s budget, bringing the total to $36.5 billion by the end of the year. Interest payments on the debt will cost taxpayers $2.3 billion this year, or $1,544 per Manitoban, equating to more than $6.4 million per day.

“Premier Wab Kinew is hiking taxes on Manitobans, but the government is still borrowing more money and racking up debt,” Haubrich said. “Taxpayers can’t afford the government wasting millions of dollars on debt interest payments every year.”