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This article was published 10/4/2018 (896 days ago), so information in it may no longer be current.

Finance Minister Cameron Friesen says the province remains committed to indexing a key income-tax deduction to inflation, despite a proposed legislative amendment that would scuttle it for the foreseeable future.

In last month's budget, the Pallister government announced large increases in the basic personal amount on provincial income tax for the 2019 and 2020 tax years. The personal exemption will rise by $1,010 in each of those years.

The government said the sizable increases were needed to make Manitoba more tax competitive with neighbouring provinces.

However, according to an amendment to the Income Tax Act now before the legislature, indexing of the basic personal amount is to be suspended beyond the current tax year "until the amount determined by indexing the 2018 basic personal amount exceeds the $2,020 increase."

Oddly enough, the proposed amendment is contained within Bill 16, the government's Climate and Green Plan Implementation Act.

Todd MacKay, Prairie director of the Canadian Taxpayers Federation, said while he welcomes the large hikes to the basic personal amount, it would be a mistake to stop indexing it for inflation. He said that's how Manitoba's BPA became uncompetitive with other provinces in the first place.

"It's a sneaky back-door tax and it's wrong," MacKay said.

In an interview Tuesday, Friesen downplayed the significance of the amendment, calling it an "interim provision."

Manitoba is committed to indexing the basic personal amount, but it has placed a "pause" on indexation as it jacks up the BPA to $11,402 by 2020, he said.

"We embrace wholeheartedly the principle of indexation," Friesen said, telling a reporter to "stay tuned for 2021."

The Progressive Conservatives won a massive majority in April 2016 and will face the voters again in October 2020 under Manitoba's fixed election rules.

One of their promises was to index tax brackets and the basic personal exemption to the rate of inflation, which they implemented for the 2017 tax year. The tax brackets will continue to be indexed, Friesen said.

The PCs say the large increases in the basic personal amount in the forthcoming years will remove 31,000 taxpayers from tax rolls and save Manitobans $77 million in 2019 and $78 million in 2020.

For 2017, Manitoba's basic personal amount stood at $9,271, one of the lowest in the country. For the same year, it was $10,171 in Ontario, $16,065 in Saskatchewan and $18,690 in Alberta.

NDP Leader Wab Kinew called the move to cease indexation of the basic personal amount "a broken promise, plain and simple."

"The Manitobans I talk to say that life is getting harder. And now, instead of helping them them, (Premier Brian) Pallister is just taking with one hand and giving with the other," he said.

larry.kusch@freepress.mb.ca