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Canada: Manitoba issues budget 2017–18

Executive summary

On 11 April 2017, Manitoba Finance Minister Cameron Friesen tabled the province’s fiscal 2017–18 budget. While the budget contains several tax measures affecting individuals and corporations, it contains no new taxes and no tax increases.

The Minister anticipates a deficit of CA$1840m for 2017–18.

Following is a brief summary of the key tax measures.

Detailed discussion

Business tax measures

Corporate tax rates

No changes are proposed to the Manitoba corporate tax rates or the $450,000 small-business limit.

Manitoba’s 2017 corporate tax rates are summarized in Table A.

Table A: Corporate tax rates

 

2017

MB

Federal and MB combined

Small-business tax rate

0.0%

10.5%

General corporate tax rate

12.0%

27.0%

Research and Development Tax Credit

The budget reduces the Research and Development Tax Credit from 20% to 15% for eligible expenditures made after 11 April 2017. Specific to research and development performed under a contract with a prescribed Manitoba institution (including post-secondary institutions), this credit is 100% refundable. The credit is 50% refundable in all other instances.

Paid Work Experience Tax Credit

Starting with the 2017 tax year, the budget eliminates the eligibility of Crown corporations and other provincial government entities for the Paid Work Experience Tax Credit. However, the eligibility of other entities is not affected.

Manufacturing Investment Tax Credit

The budget reduces the non-refundable portion of the Manufacturing Investment Tax Credit from 2% to 1% for qualifying property acquired after 11 April 2017. The 8% refundable portion remains unchanged.

Corporation Capital Tax

The budget eliminates the capital tax deduction effective for fiscal years ending after 30 April 2017.

Tax credits proposed for elimination

  • Co-operative Development Tax Credit: The budget eliminates this tax credit for contributions made after 11 April 2017.
  • The Odor Control Tax Credit: The budget eliminates this tax credit for expenditures made after 11 April 2017.
  • Nutrient Management Tax Credit: The budget eliminates this tax credit for expenditures made after 11 April 2017.
  • The Riparian Tax Credit: The budget eliminates this tax credit effective immediately.
  • The Neighborhoods Alive! Tax Credit: The budget eliminates this tax credit effective immediately.
  • The Data Processing Investment Tax Credits: The budget eliminates this tax credit effective immediately.

For each of the above-noted credits, with the exception of the Neighborhoods Alive! Tax Credit, unused credits remain available to be carried forward and are not impacted by these changes.

Other technical and administrative tax measures

  • The legislation respecting the Seniors’ School Tax Rebate and the Volunteer Firefighter and Search & Rescue Tax Credits is being amended to ensure that these tax credits are targeted to Manitoba residents.
  • The budget enhances the enforcement and administration measures under The Tax Administration and Miscellaneous Taxes Act and The Retail Sales Tax Act.

Extensions to existing tax credits

The budget has extended the following tax credits:

  • The Manufacturing Investment Tax Credit has been extended to 31 December 2020.
  • The Mineral Exploration Tax Credit has been extended to 31 December 2020.
  • The Book Publishing Tax Credit has been extended to 31 December 2018.
  • The Interactive Digital Media Tax Credit has been extended to 31 December 2022.

Personal tax

Personal income tax rates

The budget does not include any changes to personal income tax rates.

The 2017 Manitoba personal tax rates are summarized in Table B.

Table B: Manitoba personal tax rates 2017

First bracket rate

Second bracket rate

Third bracket rate

$0 to $31,465

$31,466 to $68,005

Above $68,005

10.80%

12.75%

17.40%

For taxable income in excess of $91,831, the 2017 combined federal-Manitoba personal income tax rates are outlined in Table C.

Table C: Combined 2017 federal and Manitoba personal tax rates

Bracket

Ordinary income*

Eligible dividends

Non-eligible dividends

$91,832 to $142,353

43.40%

28.12%

37.55%

$142,354 to $202,800

46.40%

32.26%

41.06%

Above $202,800

50.40%

37.78%

45.74%

* The rate on capital gains is one-half the ordinary income tax rate.

Endnote

1. Currency references in this Alert are to CA$.

EYG no. 01746-171Gbl

Download this Tax Alert as a PDF file

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