Alternative Throne Speech does little to address poverty

Make Poverty History Manitoba is disappointed in the lack of commitments on poverty reduction in Brian Pallister’s Alternative Speech from the Throne delivered Friday at the Legislature.

Pallister’s comments on Employment and Income Assistance (EIA) are confusing. He claims that “immediately upon election, [the PCs] will raise the EIA rental allowance to 75% of the median market rent.” However, the current government has already scheduled Rent Assist benefits for all Employment and Income Assistance (EIA) recipients to go up to 75% median market rent ($511 per month for a single individual) on December 1. Pallister should be commended for promising to raise EIA shelter benefits in 2013. His commitment at that time was ahead of the curve. To make the same promise for 2016, however, is misleading since he is promising something that is already implemented.

Increased Rent Assist would be welcomed by Make Poverty History Manitoba. If the Progressive Conservatives have are calculating Median Market Rents differently than the current government does, and they are proposing a substantive increase in Rent Assist rates, then they need to make their calculations more explicit.  Without details, it is difficult to support their proposal.

Also, there is no commitment to maintain the Rent Assist program for the working poor and others not on EIA. This is something Make Poverty History Manitoba has been waiting for clarification on from Pallister. Nearly 4,500 low-income working households depend on the Rent Assist program. Reducing these benefits would also make it more difficult for people to work their way off of EIA. Progress in poverty reduction will not be made by taking steps backwards.

Pallister promised a raise in the basic personal exemption to help fight poverty, but this method would only provide a very modest benefit to low income Manitobans at a high cost. The benefits of an increase in Basic Exemption, along with promised shifts to the higher tax brackets, would give a small benefit to all tax groups, but it would provide no benefit for the Manitobans in the deepest poverty. The table below shows the benefits that would be provided to various tax payers given a $1,000 increase in the Basic Exemption and a 2 percent shift in tax brackets. Meanwhile, the cost of this benefit has been estimated at $78 million per year, double the cost of this year’s increase in the Rent Assist program.

Distribution of benefits from proposed tax shift in Manitoba

basic exemption and tax shift levels chart

Other priorities developed by Make Poverty History Manitoba through community consultations as the most important steps to end poverty in Manitoba receive no specific commitments. To make a serious dent in the poverty rates, action is needed on increasing minimum wage, building social housing, creating affordable childcare, and investing in mental health. Governments should set poverty reduction targets with definite timelines and monitor their progress.

Brian Pallister’s Alternative Speech from the Throne represents the best view yet of Progressive Conservative’s economic blueprint for government should they form power next April. There is plenty of meat on his pledges to cut to taxes, but for low income people, looking for poverty reduction pledges, his words provide only thin gruel. Low income Manitobans expect more substance from a party that portrays itself as a government in waiting.

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One Response to Alternative Throne Speech does little to address poverty

  1. Ryan Rawluk says:

    Your calculations are wrong. Tax benefit of a $1,000 increase in the basic exemption doesn’t exceed $108, regardless of income level. Plus, it disproportionally benefits low income Manitobans, not high income Manitobans. $108 tax savings on $8,000 of tax is proportionately a small benefit compared to someone paying $1,000 in tax, thus the definition of proportion.

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