Manitoba budget further shifts burden on the young

A blow to intergenerational fairness

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Generation Squeeze
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VANCOUVER, BC, May 4, 2015/ Troy Media/ – Manitoba Premier Greg Selinger cut school taxes for retirees in the 2015 budget, while asking young Manitobans to contribute more to retirees’ medical care. This is a blow to intergenerational fairness that no government should impose, because no family wants it.

Coming into this fiscal year, Manitoba already contributed to a combination of federal, provincial and municipal spending that totals more than $33,000 per person age 65 and older. Spending on those under age 45 is less than $12,000 per person.

The bulk of Manitoba spending goes to healthcare ($6.1 billion), education ($3.8 billion), and social services for persons with disabilities, seniors and families ($1.2 billion). Total spending in these areas is up $200 million from 2014, after adjusting for inflation.

Manitoba budget increases spending for medical care

The biggest increase is for medical care, again. It’s up $135 million, compared to last year, and more than half this increase will be used by Manitoba seniors. Instead of mentioning this, the government’s press releases touted investments in a new youth job strategy, education, and child care. But these investments are tiny by comparison. The increase in medical care spending on those 65 and older surpasses all other spending increases through education and family services combined.

manitoba budget
Premier Greg Sellinger Manitoba budget gives his province’s Generation Squeeze a poke in the eye

Medical care for the aging population is important. My grandmother is 99, and my mom 70. I want to protect their medical care, as does every family member with an aging relative.

But my mom also wants to pay her fair share. Otherwise, her generation leaves the bills to their kids and grandchildren, or leaves less in government coffers to adapt to new challenges facing their offspring.

Selinger doesn’t ask retirees to pay their fair share. Instead, he grants them the biggest tax break by doubling the seniors’ school tax rebate, giving up $48 million in annual revenue. This equals 83 per cent of all tax cuts delivered in the budget, even though seniors represent 15 per cent of the provincial population.

Manitoba’s 2015 budget contributes to a long-standing pattern in Canada. As citizens age 65 and older grew from 9 per cent of Canada’s population in 1976 to 15 per cent today, governments added $32.5 billion in annual medical care spending for this age group. But governments did not increase revenue to pay for it.

Instead, governments held postsecondary spending relatively constant, even though twice as many young people pursue this extra education, and do so to land jobs that pay thousands less for full-time work than a generation ago.

Similarly, governments didn’t build a child care system, even though young Manitoba women increased their labour force participation from 55 per cent in 1976 to more than 80 per cent today.

These trade-offs persist in 2015. While protecting spending for the aging population and cutting their taxes, the government tolerates postsecondary tuition at levels double what they were in 1976.

Nor did the government fund a meaningful plan to grow child care spaces and bring down fees. The announcement of 900 new spaces does little to change that there are enough regulated spots for around one in three children under age six, while fees still add up to more than university tuition in Manitoba. This isn’t surprising, since the child care announcement costs $8 million, which is paltry compared to the latest investment in medical care.

Manitoba budget fails Generation Squeeze

We don’t have to cut important services for seniors to invest adequately in younger generations. Other reallocation or revenue raising options are available, including pricing pollution, as recommended by the Ecofiscal Commission. By comparison, the Manitoba government’s $1-million investment to fight climate change is weak. The result is larger environmental debts for younger citizens.

If Manitoba is to work for all generations, we need a fair approach to revenue collection that acknowledges retirees haven’t prepaid for their medical care in the same way they prepaid for much of their Canada pension benefits. So long as younger citizens contribute more to medical care for the aging population, it’s fair to expect retirees to sustain contributions to education and other policies they have benefited from in the past.

Too bad the Selinger government didn’t think so.

Dr. Paul Kershaw is the Founder of Generation Squeeze (http://gensqueeze.ca), and a policy professor in the UBC School of Population Health.

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