The Province funds 65% of school costs. (more...)
School taxes represent 54% of all property taxes collected in Winnipeg (more...)
About 1/3 of education funding in Manitoba comes from property taxes (more...)
Other provinces have already eliminated education tax on residential property (more...)
Education tax on farmland and production buildings only worked when we had one-room schoolhouses (more...)
Questions & Answers
1. In the 2008 provincial budget speech the Manitoba government said it had a specific plan to reduce the burden of education taxes on property and would move towards funding 80 per cent of the total cost of education. What does that mean?
The province is trying, but right now it's still only funding 65.4 percent of the cost of operating our schools. The province would tell you they are close to 80 percent. But to get to that figure the province has bundled several things together like the costs for building schools, contributing to teacher pension funds and tax credits. So if the government has to build a new school it can look like it has increased education funding. In fact, the Manitoba Government's Frame Report 2010/11 Budget documents (which track all education funding) show that in the 2010/2011 fiscal year the operating expenses for Manitoba's education system were budgeted to be $1.88 billion and the direct provincial contribution was to be $1.23 billion or 65.4 percent, not 80 percent. See for yourself on page (i) of the Frame Report.
2. School taxes represent 54% of all property taxes collected in Winnipeg. Who pays education tax?
Pull out last year's property tax bill and take a close look. You'll be surprised at how much is education tax.
People who own property (homeowners, business owners, farmers) or pay rent to a landlord contribute to the education tax. School boards have a big say in how much you pay. They tell their municipality how much they need collected. Your municipality then adds it to your property tax bill and collects it for them. See for yourself on page 65 of the City of Winnipeg Annual Report.
3. What provinces have already eliminated education tax on residential property?
Prince Edward Island, New Brunswick and Newfoundland have eliminated education tax from residential property tax bills. Other provinces like Ontario and Saskatchewan are actively reducing education tax on property year after year.
Moreover, in Western Canada, the Canada West Foundation in a study comparing Vancouver, Calgary, Edmonton, Saskatoon, Regina and Winnipeg, showed Winnipeg in 2009 had the highest residential education property tax per capita at $407. See for yourself on page 154 of the Canada West Foundation study.
4. How much of education is paid for by my property taxes?
In Manitoba, almost 1/3 of education funding comes from property taxes taken from residential, business and farm land. This does not put us in a favorable light when trying to attract new businesses or new residents. See for yourself in the graph on page 40 of the Frame Report.
5. Education property taxes are high, but if we reduce or eliminate the tax won't it mean less money for my child's school?
Provinces that have eliminated education tax have continued their commitment to education and have found other ways to fund education.
The Manitoba Education Finance Coalition, which supports removing education tax from property, expects the province to make education a commitment and fund it properly from general revenues and Manitoba Hydro reserves. The government's practice of adding more and more responsibilities on schools - such as social services - without matching grants to support those new initiatives, is unfair. Education is a core service and should be properly funded from general revenues.
6. The money to pay for education has to come from somewhere. Will other taxes have to increase to pay for a shortfall in property taxes?
Education is a core service that should be funded from the province's general revenues and Manitoba Hydro reserves, paid for by everyone. The Manitoba government can find ways to fund education with existing revenues and by being more efficient.
There is no shortage of ideas on how to fund education in an equitable way, without increasing taxes.
In fact, almost 10 years ago the Manitoba government struck a task force in 2002 called "The Minister's Working Group on Education Finance," which came up with several recommendations. Likewise, the Association of Manitoba Municipalities' own task force report "Rethinking Education Funding: Challenges and Opportunities 2001" contains several ideas. There are lots of ideas out there.
7. How quickly will this change happen?
Everyone knows that change takes time. A measured and planned reduction that eliminates education tax on property has started but it needs to continue in the next term of the Manitoba government until we reach a true 80 percent of education being funded by the government. Once that is accomplished the government can work towards 100 percent of education being funded by all of us so we can all pay fairly.
8. Why do property taxes vary from school division to school division?
There are 38 school divisions in Manitoba. Each division has its own school board, which raises property taxes at its own discretion. That means 38 different tax rates can be imposed. You may have a higher school tax than your neighbour who has the same house simply because the school division boundary changes in the middle of your street. It's inconsistent and unfair. School board trustees have as much power to raise your property taxes as mayors, reeves and councillors. See the difference for yourself in the graph on page 47 of the Frame Report.
9. Will reducing or eliminating education tax on property lead to the elimination of my local school board?
No. School boards have great responsibilities in managing and directing education budgets to create the best education for your children and grandchildren. This role can continue with a change in the source of funding.
10. What will I gain when education tax is removed from my property?
Everyone will gain when education tax is removed from property. Based on an average priced home in Winnipeg (which is $250,000 and using the 2011 mill rate from the largest school division in Winnipeg School Division No.1) a homeowner could see their tax bill reduced by roughly $1,150.
11. Farmers want education taxes off of their farmland and production buildings, but don't they already get a rebate?
Farmers can now apply for an 80 percent rebate on the education taxes they pay on farmland, but not on production buildings such as barns. Until the rebate was put in place, farmers were paying up to eight times as much in education taxes as their non-farming neighbours and shouldering more than their fair share. The rebate program doesn't solve the problem. Farmers want government to remove education taxes from all property, including farmland and production buildings.
The property tax system that pays for education has not kept up with the way today's farms operate. Instead of a homestead on every parcel of land, today's farms have a lot more land, and the burden of property taxes is much higher. Like anyone else who owns property, farmland and production buildings do not reflect a farmer's ability to pay. For farmers, land is a necessity to do business and they have no control over the prices they receive from the international marketplace.
12. Why is eliminating the education tax good for the economy and business?
The tax framework in Manitoba is not conducive to creating a strong business climate.
Manitoba businesses face a litany of taxes that put them in an uncompetitive position when compared with businesses in other provinces. We are the only province in Western Canada with a payroll tax and capital taxes. And Winnipeg is one of the only cities in Western Canada with a business tax and high property taxes, of which education tax makes up a significant portion.
If we want to live in a province that attracts new business, investment and people, we must create a tax climate that allows business to make decisions that will accomplish this.
More than 50 percent of all business leaders in Manitoba cite tax relief as the number one thing the provincial government could do to improve our business climate.
Business leaders also indicate that any tax relief they receive would be reinvested in Manitoba
Source: 4th Annual Chamber/Meyers Norris Penny Manitoba Business Leaders Index
- 25 percent would hire more staff
- 22 percent would invest in capital expenditures
- 22 percent would invest in expanding their businesses
- 19 percent would invest in general improvements
13. Is increased school enrollment the reason for a 53 percent rise in the operating expenses for Manitoba's education system since 1999?
Actually in that same time period school enrollment has dropped from 192,000 to 180,000, a 6 percent decrease. Schools and teachers have taken on extra roles as schools deliver more than education - but also manage social services and health issues in the classroom. It's all the more reason schools should be funded the same way health care is - by all Manitobans, not just property owners. Lets pay fair.
14. Don't I get an Education Property Tax credit though?
Yes, the Province provides all residential property tax owners paying over $250 in education taxes with an Education Property Tax credit. And that credit has slowly been increasing. But the credits and special levies that have come and gone over the years create a tricky shell game. We believe it would be simpler to just remove education taxes off the property bill altogether and fund education properly.
15. Why are cottage owners concerned about education taxes?
If you take a look at cottage owners' property tax bills, it also has municipal and education taxes on the bill. And often the education taxes exceed the municipal taxes. But because the cottage is not the bill payee's primary resident the cottage owner cannot vote for the school trustee that is taxing him. In other words it is a form of taxation without representation.