Overview
On March 20, 2025, Manitoba’s provincial government tabled its 2025 Budget, Building One Manitoba (Budget 2025). Budget 2025 introduces new infrastructure and healthcare spending, affordability measures for residents, and contingency funding in response to ongoing international trade uncertainties. The government projects a deficit of $794 million for the fiscal year, with a longer-term commitment to restoring fiscal balance by 2027–28.
The contents of this Budget only apply to Manitoban taxation. There were no changes to the corporate or personal tax rates in the Budget, but there are several new measures.
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 affect you, please reach out to a member of Fillmore Riley LLP’s Taxation Practice.
What Budget 2025 Means for Businesses in Manitoba
No Change in Corporate Tax Rates
The Budget announced no changes to Manitoba’s corporate income tax rates. They remain at 12%, with the small business rate at 0% on the first $500,000 of active business income.
More Exemptions to Health and Post-Secondary Education Tax Levy
The Budget expands the number of businesses exempt from the Health and Post-Secondary Education Tax Levy by raising the exemption thresholds. Starting January 1, 2026, the payroll tax will only apply to employers with annual remuneration exceeding $2.5 million, up from the current $2.25 million. Additionally, the threshold for eligibility for a reduced effective tax rate will increase to $5 million from $4.5 million. This levy applies to employee remuneration paid by employers that have a permanent establishment in Manitoba.
No More Corporate Capital Tax for Crown Corporations
The Budget removes the requirement for provincial Crown corporations to pay corporate capital tax for fiscal years starting after March 31, 2025. Previously, this was a tax on the annual paid up capital of banks, trust and loan corporations, and Crown corporations that have a permanent establishment in Manitoba. In the Province’s words, “[t]his measure simplifies the administration for Crown corporations and does not have a financial impact as the Crown corporations are included in the summary Budget.”
Cultural Industries Printing Tax Credit
Expanding on Budget 2024’s one-year (to December 31, 2025) extension of the Cultural Industries Printing Tax Credit, Budget 2025 goes a step further. It indefinitely extended it, providing Manitoba’s printing industry with a 35% refundable credit on salary and wages paid to Manitoba employees.
Mining Tax
The Budget eliminates both the special additional 0.5% tax rate that applies on the profit of all mining operators (currently paid, but refundable), as well as the requirement for the Minister of Finance to designate a new mine or major expansion.
What Budget 2024 Means for Individuals in Manitoba
No Change to Personal Income Tax Rates
Budget 2025 makes no changes to personal income tax rates. As of January 1, 2025, the top combined federal–provincial marginal rates remain at 50.40% for interest and other ordinary income, 25.20% for capital gains (reflecting the current 50% inclusion rate), 37.79% for eligible dividends, and 46.67% for non-eligible dividends.
Increase in Basic Personal Amount
The Budget freezes the indexation of the Basic Personal Amount, retroactive to the 2025 taxation year. This means that Manitoba’s Basic Personal Amount remains at $15,780 for 2025, as opposed to $15,969 if it had been indexed.
Increase in Renters Affordability Tax Credit
Effective for the 2026 tax year, the Budget raises the maximum Renters Affordability Tax Credit to $625, up from $575, and increases the top-up for low-income seniors to $357, up from $328. These enhancements are part of a broader plan to gradually restore the credit amounts to their earlier targets of $700 for general claimants and $400 for seniors in future years.
Homeowners Affordability Tax Credit
For the 2026 property tax year, the Budget raises the maximum Homeowners Affordability Tax Credit to $1,600, up from a previous $1,500 cap.
Volunteer Firefighter and Search and Rescue Amount
The Budget doubles the Volunteer Firefighter and Search and Rescue Amount nonrefundable tax credit to $6,000 (from $3,000). This non-refundable tax credit is available to those who are volunteer firefighters or volunteer search and rescue personnel.
Other Miscellaneous Changes
Trust Changes
The Budget makes amendments to the provincial Income Tax Act such that trusts are not eligible for the Family Tax Benefit. This is a non-refundable tax credit available to residents of Manitoba, intended to help support low- and middle-income families with children.
Changes to Retail Sales Tax (RST)
Effective January 1, 2026, the Budget announced that retail sales tax will apply to cloud computing services, including subscriptions to software, data storage and remote computer processing, to the extent that these services are used in Manitoba.
Tobacco Band Assessment Agreements
The Budget updates tobacco band assessment agreements with participating First Nations to reduce the administration fee and increase their duration. The Tobacco Band Assessment program enables First Nations to generate own-source revenue for reinvestment in their communities. Through this program, participating First Nations enter into agreements with the Province of Manitoba to apply a tobacco band assessment—set at the same rate as the provincial tobacco tax—on tobacco sales to First Nations buyers. These agreements are now being revised to extend their term from five to ten years and to lower the administration fee from 1.0% to 0.25%.
Retail Sales Tax and Tobacco Tax Registration Registry
The Budget announced that Manitoba Finance will be implementing an online service in 2025 that will enable taxpayers to verify if a business is registered for retail sales tax. A similar registry will also be developed for tobacco tax.
Land Transfer Tax
Though not implemented, the Budget announced the Province’s intention to make changes to the land transfer system. As stated in the Budget:
“Land transfer tax provisions in The Tax Administration and Miscellaneous Taxes Act currently do not require the payment of land transfer taxes where there is an unregistered change in the beneficial ownership of land.
With a view to improving tax fairness, government will be considering legislative changes to prevent the avoidance of land transfer tax through use of legal structures in which legal and beneficial ownership of property are separated.”
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.