Manitoba's NDP government moved to cushion business against the U.S. economic downturn and help green the environment in its ninth budget, delivered Wednesday.

Overall, the province is in a "healthy" financial position, Finance Minister Greg Selinger said, thanks to a diverse economy and a growth rate above the Canadian average.

The government will spend $12.2 billion in the 2008-09 budget year and projects revenue of $12.3 billion, leaving a surplus of $96 million.  It will apply $110 million to its debt of $11.1 billion.

Total spending is up $395 million.

Selinger is dipping into the province's fiscal stabilization fund to put an extra $47 million into healthcare to reduce wait times and enhance other health-related programming. He will also take $13 million from the fund to put into ecoTrust funds, as promoted by Ottawa, leaving $643 million in the kitty.

$10 million in fee increases

There weren't many goodies for taxpayers, who are facing myriad fee increases on everything from vehicle registration to fishing licences. The fee increases are expected to bring an extra $9.6 million into provincial coffers.

The province also touted some personal income tax breaks. The basic personal income deduction will rise $100, the lowest marginal rate will drop 0.1 per cent, and the threshold on upper income brackets will be raised.

However, after allowing for inflation, the moves won't result in much change to the average Manitoban's tax bill.

Smokers will get help butting out, as the government will remove its seven per cent sales tax on non-prescription quitting aids, such as nicotine gum and patches.

"It's still one of the greatest indicators of health problems," Selinger said of smoking.

Manufacturers, processors see tax cut

Selinger made it clear he wanted to buffer Manitoba industry, particularly exporters, against the effects of the struggling U.S. economy. In a bold move, he sped the elimination of the general corporation capital tax to July 2008 for manufacturers and processors, three years ahead of schedule.

The move is expected to save the businesses $25 million annually. Businesses outside the manufacturing and processing sectors will get the break in 2011, as scheduled.

"These cuts will benefit 80 per cent of businesses," Selinger told reporters, noting, "We cannot ignore events in the global economy."

However, the payroll tax - officially called the health and post-secondary education levy - was not touched, despite longstanding calls from the business community for its reduction or elimination.

Student-loan interest cut

The budget included some measures designed to help the environment, including a tax on coal emissions, and enhanced monitoring of septic fields in the capital region,  north of Winnipeg and cottage country.  About $500,000 was provided to promote the purchase of water-saving appliances and devices, with details to come in the future, Selinger said.

"Budget '08 further improves our green position," he said, noting Manitoba will be Kyoto-compliant by 2012.

In a move that should please property owners, the education tax credit has jumped by $75 to $600 from $525.

About $150 million more is going into the $3.25 billion education budget, with $500,000 of that set aside to mentor aboriginal students and give them a $7,000 tuition break to enter medical school. 

After announcing it will lift its eight-year-old university tuition freeze earlier this week, Selinger said Wednesday the interest rate on student loans will drop by one per cent.

And an extra $227 million for the $4.37 billion health budget means additional nursing and doctor seats, Selinger said.  His government will also create a graduate program to train 12 new physician assistants.

The budget also includes a boost to law and order, with additional funds to hire two Crown prosecutors and 20 more police officers in the province.

Rural and northern communities will also see a bit of extra funding for water, wastewater and infrastructure improvements, Selinger said.

"There's an enormous amount of investment were making in our municipalities," he said.