The provincial budget will usher in more money for refugee housing, but will usher out the tuition tax rebate, CBC News has learned.

The rebates, which cost the government millions in tax revenue, will be phased out gradually, a government source said.

The former NDP government introduced the 60 per cent tuition tax rebate in the 2007 with the goal of encouraging new graduates to stay and work in Manitoba. Students got up to 60 per cent of their tuition paid back to them over six years through tax rebates. Students who graduated after 2007 and moved to Manitoba also were eligible for the rebate.

In 2010, the NDP introduced the advanced tuition fee rebate, which allowed students still in post-secondary school to receive a five per cent tax credit advance on tuition fees.

Both rebates are on the chopping block, the source said.

Documents from finance officials show roughly 48,000 rebate claims are made annually, costing the government about $54 million in tax revenue. About 20,000 students apply for the advance rebate, costing the government just over $4 million each year. 

The Pallister government has argued the credits never lived up to their potential and there is no evidence they helped attract or keep people in Manitoba.

Instead, the government wants to focus on providing students who need assistance with an enhanced bursary and scholarship program.

"I think it is important that we focus our resources in such a way that we can help young people get the training they deserve and want," Premier Brian Pallister said last week when asked about the rebate's future.

Meanwhile, the government is boosting the amount of money it allocates for refugee housing in Tuesday's budget.

Pallister said last month the government expects to spend double the amount of money this year on services for refugees and asylum seekers following the influx of border crossings from the United States.

The government will earmark additional dollars for housing for refugees, said a source.

Pallister has made repeated pleas to the federal government to increase its contribution to help accommodate the roughly 1,200 asylum seekers the province predicts will cross over from the United States into Manitoba.

Pallister estimates the province will spend over $20 million this year on refugees.

"At some point, resources are just so stretched that you are not doing anyone a favour by bringing them into a situation where resources are being made available to others, and are diminished for them," Pallister told CBC News last month.

The source said the investment is being made because the province wasn't seeing this kind of assistance from Ottawa.

The extra funds will come through the Department of Families.

A kinder, gentler budget?

As for the rest of the budget, both the premier and his finance minister were signaling Monday it wouldn't be as tough a document as people fear.

"I think it will be regarded as a thoughtful, balanced budget that doesn't take steps to do anything but recognize that the status quo isn't good enough," Pallister said Monday morning.

That sentiment was echoed by Finance Minister Cameron Friesen later in the day.

"I think Manitobans are braced right now; they are thinking, what's this budget going to contain? Tomorrow when they crack the binding on that budget and give it a fair read, I think what they will find is our approach is balanced, it is moderate, it is responsible," Friesen said.

One thing the finance minister does say is that all departments will see something of an increase in their funding. but he added, it might not keep up with inflation.

Regardless of government rhetoric, the Opposition NDP believes the Tories are going to go deep and make cuts.

"We really hope they don't do that. That they don't carpet bomb the people of Manitoba with more austerity measures, but every indication is that is exactly where they are going," said NDP finance critic James Allum.