The Pallister government’s first budget begins to chip away at the massive deficit, includes some tax relief while taking away a tax rebate from higher income earners.

The projected shortfall for 2016/2017 is $890 million, down from the more than $1 billion announced a couple of weeks ago. The budget speech says previously announced measures like reducing the size of cabinet, dissolving the East Side Road Authority and reducing advertising have helped reduce wasteful spending.

But the province says it won’t eliminate the deficit well into the next term of office, within eight years.

“(This is) not about harsh austerity,” said Finance Minister Cameron Friesen.

There are tax cuts included in the fiscal blueprint as well as a pledge to freeze current taxes. The basic personal exemption is being raised to $9,292 in 2017 taking 2,770 low income earners off the tax rolls. That will cost the government $11.6 million for a full year.

The province is following through with a long term plan to index personal income tax brackets to the rate of inflation. People earning more than $31,536 will save $10 in year one, while those making more than $68,156 will save $67 in 2017. Those amounts will climb over time.

The promise to reduce ambulance fees by half is also contained in the budget but by how much in year one is still unknown.

Some seniors will be paying more because of the budget. Senior households making less than $40,000 will still get the $470 annual school tax rebate. The amount of the rebate will drop for those earning between $40,000 and $63,500. Those senior households making more than $63,500 will not be eligible form the rebate anymore. This will save the government $37 million per year.

“Seniors who need it will still get it,” said Friesen.

There is also a pledge to review all personal and business tax credits in the future.

Despite opposition claims Premier Pallister would make cuts to key services, departments are seeing increases in spending overall of 5.2 per cent.

Including:
10 per cent for Families (includes CFS)
5.9 per cent for Health
1.6 per cent for Education

The budget also includes $1.8 Billion for infrastructure including $206.8 million for the City of Winnipeg. But projects not yet approved will be reviewed to assess their benefits.