Overview
The Government of Manitoba presented its 2024 Budget, projecting a deficit of $2.2 billion for the 2023-2024 fiscal year, with the shortfall reduced to $796 million for the 2024-2025 fiscal year and $532 million for the 2025-2026 fiscal year.
This budget is the first of the new provincial government since their election in October of 2023, and its contents only apply to Manitoban taxation. There were no changes to the corporate or personal tax rates in Manitoba (although there has been a change to the treatment of the Basic Personal Amount), but there are several new tax measures applicable to both corporations and individuals.
The following is a summary of the highlights and key takeaways of how this budget impacts Manitobans. For details of each particular change, and how it may impact you, please reach out to a member of Fillmore Riley LLP’s Taxation Practice.
What Budget 2024 Means for Businesses in Manitoba
In the 2024 Budget, Manitoba’s corporate tax rates remain the same as the previous fiscal year. Businesses will nonetheless be impacted by several other changes.
Rental Housing Construction Tax Credit
The budget introduces the Rental Housing Construction Tax Credit. This credit offers $8,500 for the construction of new market-rate rental units and $13,500 for units classified as affordable and maintained for at least 10 years. To qualify for this credit, construction must begin on or after January 1, 2024.
The tax credit is fully refundable for non-profit organizations. For other businesses, the credit is fully refundable on all units, with an additional non-refundable $5,000 credit available over 10 years specifically for affordable units.
Cultural Industries Printing Tax Credit
Manitoba’s printing industry will enjoy the extension of the Cultural Industries Printing Tax Credit, which was initially set to expire on December 31, 2024. The budget extends it for an additional year until December 31, 2025. This tax credit offers a 35% refundable credit on salary and wages paid to Manitoba employees.
Data Processing Investment Tax Credits
Effective for the 2025 tax year, the Data Processing Investment Tax Credits will no longer be available. These refundable credits, previously accessible to eligible data processing center corporations, were aimed at offsetting a portion of the expenses related to data processing buildings and property.
Sales Tax Registration
Starting January 1, 2024, the sales tax registration threshold for taxable sales will rise from $10,000 to $30,000. This adjustment brings it in line with the federal government’s GST/HST threshold
Sales Tax Commissions
The budget proposes to eliminate the sales tax commission for businesses in Manitoba that report less than $3,000 in sales tax during a filing period. This will be effective for any filing period ending after April 2024.
What 2024 Budget Means for Individuals in Manitoba
In the 2024 Budget, Manitoba's personal income tax rates remain the same as the previous fiscal year. However, several new changes will impact taxpayers.
Gas Tax
The budget extends the temporary gas tax cut, previously slated to expire on June 30, 2024, to September 30, 2024. This means that Manitobans will continue to see a gas tax rate of zero cents per litre on gasoline, diesel and marked gasoline until this date.
Changes to the Basic Personal Amount
Manitobans will be able to claim slightly more as part of the Basic Personal Amount in 2024. The Basic Personal Amount, which is a non-refundable tax credit Manitoba residents can claim on their personal income tax return, increased from $15,000 in 2023 to $15,780 in 2024 as a result of indexing. It is projected to further increase to $16,206 in 2025.
The budget phases out the Basic Personal Amount for some high-earning Manitobans. Individuals earning a net income between $200,000 and $400,000 can expect to have their Basic Personal Amount phased out progressively, effective for the 2025 tax year.
Renter's Tax Credit
Renters will enjoy slightly increased benefits under the budget. The maximum yearly Renters Tax Credit, available to Manitobans who are tenants in their principal residence, was increased from $525 in 2023 to $575 in 2024.
Seniors' Top-Up
The budget boosted the seniors' top-up, available to low-income seniors, to $328 in 2024, from $300 in 2023.
Fertility Treatment Tax Credit
Manitobans receiving fertility treatments received a significant tax boost in the budget. The Fertility Treatment Tax Credit, available to Manitobans who personally, or whose spouse or common-law partner received, fertility treatments from a licensed medical practitioner or infertility treatment clinic in Manitoba, saw the maximum annual eligible expense amount increase to $40,000 (from $20,000 in 2023), and the and the available annual credit amount to $16,000 (from $8,000 in 2023).
School Tax-Related Credits
The School Tax Rebate and Education Property Tax Credit are eliminated for the 2025 tax year. They will be replaced by a new Homeowners Affordability Tax Credit of up to $1,500 on principal residences. This will be applied directly to the property tax statement.
Also eliminated for the 2025 tax year are the Education Property Tax Credit seniors’ top-up and School Tax Credit, though the Seniors School Tax Rebate will be maintained for the 2025 tax year.
The School Tax Rebate for farm properties will be continued at 50%, though the rebate for all other commercial properties will be eliminated.
The new measures will effectively eliminate education property taxes for homes with assessed values of $285,000 and lower, while owners of properties with a higher value will see the tax benefit gradually decrease, with the province saying that owners of houses valued $437,000 will see no change, while homes with higher values will pay more in future years compared to 2024.
Electric Vehicle Incentive
Manitoba has introduced a new Electric Vehicle (EV) rebate. All Manitobans who buy new or used EVs or plug-in hybrid vehicles may qualify for a rebate. The rebate amounts are up to $4,000 for new EVs and $2,500 for pre-owned EVs purchased between August 1, 2023, and March 31, 2026. Eligible individuals can claim the rebate once per vehicle and once per purchaser/lessee during vehicle registration with Manitoba Public Insurance.
Vaping Tax
The province plans to enter into a Coordinated Vaping Product Taxation Agreement with the federal government. The federal government introduced an excise duty on vaping products starting from October 1, 2022, and invited provinces and territories to sign an agreement that would impose an additional duty equal to the federal rate. In Manitoba, the new, doubled rates will take effect on January 1, 2025.
Administrative Changes
Additionally, the Budget notes the following administrative measures will be enacted:
- Clarify mobile homeowners’ eligibility for the Homeowners Affordability Tax Credit and the Renters Tax Credit.
- Establish a retroactive recovery tax for Qualified Disability Trusts where trust funds are not received by the intended qualified beneficiary.
- Allow the province to issue Land Transfer Tax administrative penalties in certain cases of non-compliance.
- Introduce technical clarifications to the retail sales tax regime.
- Codify provincially administered tax audit periods to a maximum of six years from the date of notification of the audit and clarify when the statutory limitation period applies.
- Eliminate the tax clearance certificate fee and the Advance Ruling Fee, effective May 1, 2024.
- Repeal the Succession Duty Act, which applied a tax on the estate of persons who died between 1971 and 1977.
- Extend the record-keeping requirements for oil and gas operators to six years (from four years).
Fillmore Riley LLP's Taxation Practice
We offer tax advice to both individual and business clients on a wide range of matters, including corporate and commercial transactions, estate planning, and tax dispute resolution and litigation. For more information, or if you have any questions, please contact a member of the Fillmore Riley Taxation practice.