'Economic circumstances have changed': Manitoba unions call on NDP to reverse provincial tax cuts to fulfill election promises

Manitoba’s largest unions are concerned the NDP government will be unable to fulfill its promises as a result of the most recent financial data, according to an open letter released by The Canadian Centre for Policy Alternatives.

The letter say the current tax cuts promised by the government will make it harder for it to achieve its goals for health-care, class sizes and homelessness.

According to documents obtained by CTV news, the letter was set to be released later in the week and an internal-only document calls for support from additional signatories going forward including other unions and labour organizations.

“Politicians should take their promises seriously, but the economic circumstances have changed since the tax cuts were legislated,” reads the letter released by the Canadian Centre for Policy Alternatives this afternoon and signed by the Manitoba Government and General Employees’ Union, Manitoba Federation of Labour (MFL), CUPE Manitoba, and other organizations.

During the election, Premier Wab Kinew pledged to balance the budget during the NDP’s first term and not raise Manitoba’s PST, and has also promised to keep the tax cuts introduced in the previous budget created by the Progressive Conservative Party.

"We're concerned about all tax cuts robbing the governmnent of revenue right now when we know there's pressing problems," said Molly McCracken, director of the Manitoba office for the Canadian Centre for Policy Alternatives.

"Being the premier, being the government in charge, means looking at the priorities and making sure you have the means and resources to do so," said Kevin Rebeck, president of the MFL.

The government revealed last week that the province’s deficit is $1.6 billion, up from $363 million projected in the 2023 budget.

“The December 2023 $1.6 billion deficit projection makes it clear that the previous government’s fiscal framework was unsustainable and should not be committed to, moving forward,” the letter reads. “Any realistic path forward that honours your election commitments entails exploring means of shoring up revenue. It also means extending your timeline to return the budget to balance given the shockingly high deficit and deep cuts inflicted on public services in Manitoba."

The letter is asking the province to avoid tax cuts, and to “take an approach that ensures sustainable revenue to meet the province’s urgent need to rebuild public services, provide good jobs for Manitobans, and ease the affordability crunch for those who need it most.”

Speaking to reporters Wednesday afternoon, Kinew said his government will keep the tax cuts that are currently in place.

“As part of a balanced approach, where we invest in health-care and we’re balanced with the books, that we’re also offering predictability,” he said. “Because you have households who have made their financial decision for the upcoming year, and we can’t pull the rug out.”

Kinew said his government is serious about being fiscally responsible and fulfilling election promises, saying decisions made by the province will help save some money to help fund promises, such as a gas tax freeze set to take effect on January 1.

“We’re working very hard to hold the line,” he said.

The province found $123M in savings, which will be used to fund projects and cover costs, and not be used to pay down the deficit.

Savings include $15 million from the end of the diagnostic and surgical task force, which the province announced last week, as well as $14 million in health-care admin savings, and $25 million is savings from the end of an “idea fund” from the previous government.

 Kinew pledged once again Wednesday that despite the deficit, his government would have a balanced budget during his term. 

NDP ACCUSED OF FEARMONGERING: PROGRESSIVE CONSERVATIVES

Progressive Conservative Finance Critic Obby Khan criticized the announcement saying the NDP government is spreading ‘doom and gloom’ to Manitobans.“Affordability is top of mind for Manitobans, and this is not being addressed by this government right now,” Khan said.

“The whole press conference was about getting Manitobans ready for the deficits they're going to run, for the increase in taxes, and for the cuts they've already started.”

CTV News Winnipeg has reached out to groups on the letter for additional comment. The MGEU has declined an interview request and CUPE has declined to provide additional comment.

The full letter can be read below.

- With files from CTV's Jeff Keele