The Manitoba government is giving with one hand and taking with another under its 2008-09 budget, making small cuts to several taxes while raising a variety of user fees.

For individuals, the government is increasing the education property tax credit for homeowners by $75 to $600. It's boosting the basic personal income tax exemption by $100 and enacting small cuts to income tax rates first promised in last year's budget.

There is also a new $1,020 tax credit for people responsible for persons receiving home care, and a new sales tax exemption for smokers who buy patches or other devices in order to kick the habit.

"There will be actual, real tax savings for every Manitoban this year in the budget,'' Selinger said Wednesday. Combined with previously announced tax cuts, the average family of four will save up to $792, according to budget documents.

User fees increasing

On the flip side, many Manitobans will be hit with higher user fees. The NDP is increasing the cost of registering a vehicle by $20 and hiking speeding tickets, hunting fines and other offences by $10 each. Deductibles under the Pharmacare drug plan are rising by as much as $72.

More user fees will hit fishermen, campers and others, for a total of $9.5 million.

The tax savings outnumber the fee increases 10 to one, Selinger said, but others weren't so sure.

"For many Manitobans, it's pretty much a wash,'' said Winnipeg tax analyst Evelyn Jacks. "Whether you end up a little ahead or behind depends on what services you use.''

Jacks also said Selinger's changes to the income tax exemption pale in comparison to those in Saskatchewan and other provinces, where tax brackets are raised every year in line with the inflation rate.

The Canadian Taxpayers Federation said the budget will hurt.

"No one's actually better off under this budget,'' said spokesperson Adrienne Batra.

Coal users targeted

The province also announced a new environmental tax on coal-burning businesses to encourage them to go green, although the tax may only affect a handful of enterprises.

By July 2011, businesses that burn coal will face a $10-per-tonne tax on emissions. The decision comes as Crown-owned Manitoba Hydro prepares to phase out its last coal-fired electrical plant in Brandon.

Coal-fired businesses are few and far between in the hydro-friendly province, but Selinger said the few that remain, including those with agricultural ties, should be persuaded to change their ways.

"It's not intended to be a revenue measure. It's intended to be a measure that changes behaviour and gets people to stop using dirty fuel,'' he said.

The hard-hit manufacturing sector will see its corporation capital tax wiped out this July _ two years earlier than planned. The move is intended to help exporters deal with the rising loonie and weakened demand in the United States.

Selinger's ninth budget comes at a time when the provincial economy is pouring more tax revenues into government coffers, and when equalization payments from the federal government have jumped to $2 billion from $1.8 billion last year.

The new money has allowed the province to boost spending by 3.3 per cent to $12.3 billion. The money is spread over a number of areas, including a $350 million boost in health-care spending and an extra $5 million for child care.

Despite the increased revenues, the government is not avoiding red ink. The budget forecasts a $96-million surplus. But overall the province will sink deeper into debt by $490 million due to money borrowed to pay for capital projects such as highway work and the expansion of the floodway that surrounds Winnipeg.

'Reckless spending': Tories

The opposition and business groups accused the government of frittering away its newfound wealth.

"We're surprised that they didn't use some of it for decreasing the debt and looking at payroll tax decreases to enhance our opportunities to bring employment to Manitoba,'' said Graham Starmer of the Manitoba Chambers of Commerce.

"It's reckless spending, and most of it is other people's money,'' said Tory Leader Hugh McFadyen, pointing to the equalization money generated by the economies of richer provinces.

Poverty groups said the budget left them with little hope.

"This is a good revenue year for Manitoba, and we're sorry to see that there isn't a comprehensive poverty reduction strategy,'' said Sid Frankel of the Social Planning Council of Winnipeg.

Highlights of the Manitoba budget presented Wednesday:

  • Several small tax cuts: a $75 boost in the education property tax credit, a new $1,020 tax credit for caregivers of people in home care, a $100 increase in the basic personal income tax exemption.
  • Provincial sales tax removed from stop-smoking aids.
  • The corporation capital tax to be phased out in July for manufacturers who have been battling a strong loonie and weak U-S demand.
  • Costs rise for vehicle registrations, court-imposed fines, pharmacare deductibles and other items by more than $9.5 million.
  • A new $10-per-tonne tax on companies that burn coal.
  • Health-care spending jumps by $350 million to hire more doctors and nurses, as well as to improve services.
  • An extra $5 million for child care.
  • A $96-million surplus on total spending of $12.3 billion, but overall the province sinks deeper into debt by $490 million.

Watch for CTV team coverage from Rachel Lagac� and Stacey Ashley.