Canada

2019 Manitoba Budget Highlights

TAX ALERT  | 

Manitoba’s budget was tabled by Finance Minister Scott Fielding.

Business tax measures

Corporate tax rates

Manitoba’s 2019-2020 budget announced no new changes to the corporate tax rates. Manitoba’s 2019 and 2020 corporate tax rates are as follows:

 

2019

2020

 

MB

Federal and MB combined

MB

Federal and MB combined

Small business tax rate

0%

9%

0%

9%

General corporate tax rate

12%

27%

12%

27%

Investment income for CCPC

12%

50.7%

12%

50.7%


Proposed business tax measures

Manufacturing investment tax credit 
  • Effective for qualifying property acquired after June 30, 2019, the refundable portion of the Manufacturing Investment Tax Credit (MITC) is reduced from 8 per cent to 7 per cent. This change does not impact the tax credit on qualified property acquired before July 1, 2019. The 1  per cent non-refundable MITC is not impacted by this change.
Proposed extensions

The budget has extended the following tax credits:

  • Scheduled to expire on December 31, 2019, the Film and Video Production Tax Credit is made permanent with no fixed expiry date. This program promotes the growth of the Manitoba film and video production industry.
  • Scheduled to expire on December 31, 2019, the Small Business Venture Capital Tax Credit is extended for three years to December 31, 2022. This program supports individuals and corporations that acquire equity capital in eligible Manitoba enterprises.
  • Scheduled to expire on December 31, 2019, the Cultural Industries Printing Tax Credit is extended by one year to December 31, 2020. In addition, the annual maximum tax credit claim is capped at $1.1 million per taxpayer. This measure is effective for qualified expenditures as of the 2019 tax year.
  • Scheduled to expire on December 31, 2019, the Book Publishing Tax Credit is extended for five years to December 31, 2024. This program promotes the growth of the Manitoba book publishing industry.

Federal tax on split income (TOSI) rules

In accordance with the federal-provincial tax collection agreement, consequential amendments will be made to parallel the Federal Tax On Split Income (TOSI) rules, including for the purposes of various non-refundable tax credits. Manitoba will not harmonize with the TOSI rules related to various provincial refundable tax credits which should provide some relief to residents of Manitoba.

Retail sales tax updates

Changes effective July 1, 2019:

  • The rate of Retail Sales Tax (‘RST’) decreases from 8 per cent to 7 per cent. Corresponding transitional rules have been introduced.
  • The reduced rate of RST for electricity used by qualifying manufacturers, mining corporations and oil well operators in Manitoba also decreases from 1.6 per cent to 1.4 per cent.

Changes effective 2020:

  • Large taxpayers, i.e. remitting or paying RST of $5,000 or more per month, will be required to file, remit and pay their taxes electronically. Businesses will be required to register for using TAXcess prior to filing, remitting and paying their taxes.
  • Commissions for collecting and remitting Manitoba sales tax will no longer be paid to any sales tax vendors filing monthly returns. Vendors filing quarterly or annual returns under $3,000 per filing period will not be affected.

Other highlights:

  • No changes to the current list of sales tax exemptions for RST.
  • RST will not apply to the federal carbon tax to be introduced on natural gas and coal beginning April 1, 2019.

Personal tax measures

The Budget does not propose any changes to the personal income tax rates.

For taxable income in excess of $95,259, the 2019 combined federal and Manitoba personal income tax rates are as follows:

Income tax brackets

Ordinary income

Capital gain

Eligible dividend

Non-eligible dividends

$95,260 to $147,667

43.40%

21.70%

28.12%

38.62%

$147,668 to $210,371

46.40%

23.20%

32.26%

42.07%

Over $210,371

50.40%

25.20%

37.78%

46.67%


Personal tax credits

  • The basic personal amount will increase to $9,626 (from $9,382) for the 2019 taxation year and to $9,809 (from $9,626) for the 2020 taxation year.

For ongoing commentary relating to the federal and provincial budget announcements, visit our budget resource centre

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