Progressive Conservatives promise to get rid of payroll tax if re-elected this fall

Manitoba Progressive Conservatives are promising to phase out the province's payroll tax over eight years if they're re-elected.

The announcement by the Tories was the latest in a series of deep tax-cut promises as they seek a third consecutive mandate in the Oct. 3 provincial election.

The tax, which charges employers a percentage of their total payroll, brings in about $440 million a year.

Tory Leader Heather Stefanson says the tax discourages economic growth and makes Manitoba less competitive with other western provinces.

"This tax punishes businesses for expanding or paying their employees higher wages," Stefanson said.

The tax, formally called the Health and Post Secondary Education Tax Levy, charges employers a percentage of their total annual payroll. Those with payrolls below $2 million a year are exempt. Five provinces, including Saskatchewan and Alberta, do not have a similar tax.

Rob Read welcomes Stefanson's plan to extinguish the payroll tax.

"At the end of the day, I'm being penalized for employing more people and growing my business,"said Read, who runs a Winnipeg business that provides and servicesfire extinguisher products. "It's a bigger hit and it's every year."

Last week, the Tories promised to cut in half, over four years, the rate applied to the bottom personal income-tax bracket. The move would cost the treasury some $600 million a year once fully phased in.

The Tories have also promised cuts to eliminate the land transfer tax for first-time homebuyers and to give people a tax credit for mobility aids such as walkers and wheelchairs.

While Manitoba has run deficits in every year but one since 2009, Stefanson said the province can afford the tax cuts because they will stimulate economic growth.

"Creating jobs will also create larger revenues to the provincial government to help us make life more affordable for Manitobans and be able to make those investments in health care, education, roads, social services," she said.

Stefanson made the announcement on a downtown second-floor terrace, while striking public-sector workers chanted "Where is Heather?" on the street below.

The New Democrats, who have been the Opposition for seven years, said the Tory plan doesn't address voter needs.

"If you talk to the average Manitoban ... they'll tell you what their priority is: lower costs for my family and make sure that the health-care system is there for us when we need it," NDP Leader Wab Kinew said.

Manitoba Liberal Leader Dougald Lamont suggested the PCs are repeating an old falsehood about how "they will grow our economy by cutting taxes."

"The reality is that the PCs are taking [recordamounts] of federal transfers and borrowing additional money for these tax cuts and promises, while they continue to make cuts to public services that Manitobans rely on," he said in a statement.

"Manitoba is facing crises in health care and homelessness because of the last seven years of cuts and freezes. We could be going into a recession and Manitoba cannot afford another irresponsible PC government."

• Read fullManitoba election coverage from CBC Manitoba here