A happy new year is in store for Manitobans, where provincial finances are concerned. Our government is moving the province in the right direction and making steady progress on deficit reduction. We made a promise to Manitobans to return the budget to balance in our second term, and we are committed to a careful and disciplined approach that protects front-line services.
In December, our second-quarter report and economic update for the 2018-19 fiscal year demonstrated continued progress toward balanced budgets, and we remain on track to meet our targets. The report cites a summary deficit of $518 million, which is a $177-million improvement from the 2017-18 year-end deficit of $695 million. For a third straight year, we are on track for government expenses to be on or under budget while we spend more than ever on education, health care and the Department of Families. The report also notes the fundamentals of Manitoba’s economy remain strong, including record employment, growth in capital investments and rebounding commodity prices.
Provincial tax relief is also coming for individuals and businesses this year. Our government legislated the indexing of the basic personal exemption and personal income tax brackets to the rate of inflation beginning in 2017. This ended bracket creep, ensuring individuals and families keep more of their income. In 2018, indexing removed an estimated 1,740 Manitobans from the tax rolls and saved taxpayers more than $17.5 million annually. In 2019, indexing will remove another 3,810 Manitobans from the tax rolls for additional annual savings of $38 million.
To support growth and promote investment, the small business income limit for the zero per cent rate is increasing in 2019 from $450,000 to $500,000. Meanwhile, our government remains committed to rolling back the retail sales tax from eight per cent to seven per cent by 2020, saving families and businesses more than $300 million a year.
In this new year, our government will keep on working to fix the province’s finances, secure the stability of our services and rebuild the economy for Manitobans today and into the future.