WINNIPEG — Manitoba Premier Brian Pallister says people have a choice: Start paying health-care premiums like residents in some other jurisdictions or prepare to see services cut.
"We're asking Manitobans what they would suggest we do, given the reality of the situation," Pallister said Wednesday as he announced the start of annual pre-budget public consultations.
"With the reality that the federal government's transfer support is reduced ... this is the reality we have to face. It's a stark reality but it's the reality."
The premium would be tied to income levels, Pallister said, and be similar to ones in British Columbia and Ontario where adults pay up to $900 a year each.
Pallister said the sudden consideration of a new tax stems from the federal government's recent decision to slow the growth in annual transfer payments — to three per cent from six per cent. He estimated the change will cost the province $2.2 billion over the next 10 years.
The announcement was a sharp turn for Pallister's Progressive Conservative government — elected last year on promises to keep taxes in check and protect front-line services — and was condemned by opposition and labour critics.
"I don't think that's any kind of choice that Manitobans should have to make," said NDP health critic Matt Wiebe.
Michelle Gawronsky, president of the Manitoba Government and General Employees' Union, said health-care premiums hurt those living on fixed and low incomes.
"We know that when surveyed, Manitobans favour asking high-income earners and large corporations to pay more of their fair share to support the public services we all rely on," she said in a written statement.
While Pallister cited the fiscal need for a new tax for health care, he said the government will still fulfil a campaign promise to cut the provincial sales tax to seven per cent from eight per cent before the next election, scheduled for October 2020.
Pallister's Conservative party took the previous NDP government to court for not holding a referendum on its provincial sales tax increase, but he said a health premium doesn't require a public vote. Provincial balanced-budget legislation requires referendums on any rise in taxes to income, sales or corporate payrolls.
A health premium does not fall under those categories, Pallister said.
Todd MacKay with the Canadian Taxpayers Federation called the proposal shocking. Alberta repealed its health-care premium in 2009 and Quebec eliminated it this year, MacKay said. British Columbia has cut its premium in half with an eye to scrapping it within four years.
"Imposing a massive tax hike and spinning it as a health-care fee is a failed policy that other provinces are reversing," MacKay in a statement.
The Progressive Conservative government revealed a website Wednesday that is to guide consultations for next spring's budget and features a section on health-care premiums.
It says there are three choices: A low premium to sustain services at their current level, a higher premium to enhance services and worker salaries, or no premium "which would lead to reduced health-care services from current levels." The word reduced is underlined.
There will be online consultations, town halls and telephone conference calls seeking public input on the premiums and other budget ideas before any final decision is made, Pallister said.
Steve Lambert, The Canadian Press