Hydro tax makes light work of Manitoba budget

Hydro tax makes light work of Manitoba budget

Cigarette sales, taxes on electricians' fees and Hydro exports will help Manitoba enjoy a $10 million surplus this year.

Provincial Finance Minister Greg Selinger unveiled the $7-billion budget Monday.

Smokers face a tax hike of 4.9 cents per cigarette. "Every province to the west of us has increased their taxes and we're right in line," Selinger says.

He expects the province to earn $7 million by charging sales tax on the labour for all electrical and mechanical contracts.

Hydro tax big money maker

But the biggest money maker will be a tax on Manitoba Hydro's exports. That's expected to raise $288 million over three years.

Manitoba's opposition Conservatives are slamming the move to tax Hydro. "There's just absolutely no excuse for it," says Conservative leader Stuart Murray. He accuses the NDP government of a cash grab.

But the move has some surprising support. "This will not be a problem for Manitoba Hydro," says Hydro president Bob Brennan.

Organized labour also seems to like the idea. Rob Hilliard of the Manitoba Federation of Labour says the province should be benefiting more from Hydro's profits.

"Alberta certainly benefits from its natural resources; we should too," he says.

The province's spending is up 2.5 per cent in the 2002-03 fiscal year. Selinger says he will still be able to deliver the small tax reductions he promised earlier.