Manitoba government changes law to forgive deficits

The Manitoba government is making yet more changes to its balanced budget law.

The government introduced a bill yesterday to raise the provincial sales tax without holding a referendum first, as the law currently requires.

That means the sales tax will rise from seven per cent to eight per cent on July 1st, as announced in the budget.

But the bill also has other changes.

It will forgive the government for running deficits that are caused by a drop in federal transfer payments below the current level, which is about $2,600 dollars per person.

It will also forgive any deficit caused by a sudden drop in profits at the province's Crown corporations.

Normally, cabinet ministers face salary cuts of up to 40 per cent for running deficits.

But that penalty was changed in 2010 to 20 per cent.