Last updated: Mar. 8, 2019
On March 7, 2019, the Honourable Scott Fielding presented his first budget as Minister of Finance. The budget contains several tax measures affecting individuals and corporations.
The 2018-2019 deficit is estimated to be $470 million. The budgeted deficit is estimated to be $360 million for 2019-2020, with revenues projected to increase by 1.4% and expenditures projected to increase by 0.3%.
Highlights
- Deficit of $470 million projected for 2018-19
- Deficit of $360 million forecast for 2019-20
- Manitoba Sales Tax Rate will be reduced from 8% to 7%, effective July 1, 2019.
Personal Tax Measures
Manitoba did not announce any changes to its personal income tax rates for 2019.
As a result, Manitoba’s combined federal and provincial top marginal rates for income, capital gains and dividends is as follows:
|
Combined Federal/Provincial Top Marginal Tax Rates |
||
|
|
2018 |
2019 |
|
Interest and regular income |
50.40% |
50.40% |
|
Capital gains |
25.20% |
25.20% |
|
Eligible dividends Non-Eligible dividends |
37.78% 45.92% |
37.78% 46.67% |
|
2018/2019 Manitoba Personal Tax Rates |
|||
|
Brackets |
2018 Tax Rate |
Brackets |
2019 Tax Rates |
|
$0 to 31,843 |
10.80% |
$0 to $32,670 |
10.80% |
|
$31,843 to 68,821 |
12.75% |
$32,670 to $70,610 |
12.75% |
|
Over $68,821 |
17.40% |
Over $70,610 |
17.40% |
For taxable income in excess of $95,259, the 2019 combined federal-Manitoba personal income tax rates are outlined as follows:
|
Combined 2019 Federal & Manitoba Personal Tax Rates |
|||
|
Bracket |
Ordinary |
Eligible Dividends |
Ineligible Dividends |
|
$95,259 to $147,667 |
43.40% |
28.12% |
38.62% |
|
$147,677 to $210,371 |
46.40% |
32.26% |
42.07% |
|
Above $210,371 |
50.40% |
37.78% |
46.67% |
Ineligible Dividends
The top marginal rate for ineligible dividends is higher than in 2018 as a result of the decrease in the federal tax rate on small business corporations.
Personal Tax Credits: Basic Personal Amount
As was announced in Budget 2016, Manitoba personal income tax brackets and the basic personal amount are indexed to inflation by the Manitoba Consumer Price Index.
Effective for the 2019 tax year, the basic personal amount will be increased from $9,382 to $9,626, and for the 2020 tax year it will be increased from $9,626 to $9,809.
Tax on Split Income (TOSI)
Manitoba intends to harmonize with the federal “TOSI” (tax on split income) rules implemented in 2018. These rules are designed to tax certain types of income at the top federal rate if the income was paid by a related business to family members with lower income. Manitoba residents will pay tax at the top rates noted above if these rules apply.
Personal Tax Credits For 2018
The maximum tax credit amounts and actual Manitoba tax credits for 2018 and 2019 are set out below.
|
Manitoba Non-Refundable Tax Credits |
||||
|
|
2018 |
2019 |
||
|
Maximum Amount |
Manitoba |
Maximum Amount |
Manitoba Tax Credit |
|
|
Basic Personal Amount |
$9,382 |
1,013 |
$9,626 |
1,040 |
|
Spousal Amount |
9,382 |
1,013 |
9,626 |
1,040 |
|
Eligible dependent amount |
9,382 |
1,013 |
9,626 |
1,040 |
|
Age amount |
3,728 |
403 |
3,728 |
403 |
|
Infirm dependent amount |
3,605 |
389 |
3,605 |
389 |
|
CPP Contributions |
2,594 |
280 |
2,749 |
297 |
|
EI Contributions |
858 |
93 |
860 |
93 |
|
Pension income amount |
1,000 |
108 |
1,000 |
108 |
|
Disability amount |
6,180 |
667 |
6,180 |
667 |
|
Disability supplement |
3,605 |
389 |
3,605 |
389 |
|
Tuition and education amounts |
Variable |
Variable |
Variable |
Variable |
|
Adoption expenses (max) |
10,000 |
1,080 |
10,000 |
1,080 |
|
Medical expenses |
N/A |
Variable |
N/A |
Variable |
|
Medical expenses (other dependents) |
Variable |
Variable |
Variable |
Variable |
|
Caregiver amount |
3,605 |
389 |
3,605 |
389 |
|
Interest on student loans |
Variable |
Variable |
Variable |
Variable |
|
Donations & Gifts |
200 |
21.60 |
200 |
21.60 |
|
In general, credits are multiplied by 10.8% to arrive at the deduction from Manitoba Tax. In the case of donations and gifts over $200, the credit is 17.40% |
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Corporate Tax Measures
Corporate Tax Rates (No Change)
Manitoba did not announce any changes to its corporate income tax rates for 2019. As a result, Manitoba’s corporate income tax rates remain as follows:
Corporate Tax Rates
|
|
2018 |
2019 |
||
|
MB |
Federal and MB combined |
MB |
Federal and MB combined |
|
|
Small business tax rate * |
0.00% |
9.00% |
0.00% |
9.00% |
|
General corporate tax rate ** |
12.00% |
27.00% |
12.00% |
27.00% |
* The small-business rate is prorated based on a 31 December year end. In addition, the rate is based on first $450,000 of active business income (on first $500,000 of active business income, as of January 1, 2019)
** On 24 October 2017, the federal government tabled a notice of ways and means motion to implement reductions in the small-business corporate income tax rate, which were announced on 16 October 2017. The federal small-business rate is reduced from 10.5% to 10.0% effective 1 January 2018 and will be further reduced to 9.0% effective 1 January 2019.
Manufacturing Investment Tax Credit
The refundable portion of the Manufacturing Investment Tax Credit will be reduced from 8% to 7% for qualified property acquired on or after July 1, 2019. This change will not affect the 1% non-refundable Manufacturing Investment Tax Credit.
This measure is intended to ensure alignment of the refundable credit with the retail sales tax rate reduction.
Extensions to Existing Tax Credits
Book Publishing Tax Credit
The Book Publishing Tax Credit, scheduled to expire on December 31, 2019, is extended to December 31, 2024.
This credit supports the development of the book publishing industry in Manitoba by providing a refundable tax credit equal to 40% of eligible Manitoba labour costs.
Cultural Industries Printing Tax Credit
The Cultural Industries Printing Tax Credit, scheduled to expire on December 31, 2019, is extended for 5 years to December 31, 2024.
This program assists the development of Manitoba’s printing industry.
The Film and Video Production Tax Credit
The Film and Video Production Tax Credit, scheduled to expire on December 31, 2019. This credit has been made permanent.
This program assists the development of Manitoba’s film and video production.
The Small Business Venture Capital Tax Credit
The Small Business Venture Capital Tax Credit, set to expire on December 31, 2019, has been extended to December 31, 2022.
This credit is available to individuals and corporations that acquire equity capital in eligible Manitoba enterprises.
Retail Sales Tax
The Manitoba retail sales tax rate will be reduced from 8% to 7%, effective July 1, 2019.
There are only three provinces that currently have a provincial retail sales tax, and this change will put Manitoba’s rate in line with that of British Columbia and higher than Saskatchewan’s 6% rate.
The delay in the rate change until July is intended to give businesses time to change their point-of-sale systems.
It is estimated by the government that this amendment will save the average household of four individuals $239 in 2019, and approximately $500 annually thereafter.
The retail sales tax will not be applied to the federal carbon tax that is scheduled to be levied on natural gas and coal beginning on April 1, 2019.
Effective 2020, large businesses with retail sales tax remittances greater than $5,000 per month will be required to file returns electronically.
Administrative and Technical Tax Measures
As part of the Manitoba Government’s ongoing efforts to increase efficiency and reduce administrative burden, commencing in 2020:
- With respect to the fuel tax, tobacco tax, and health and post-secondary education tax levy, all businesses will be required to file, remit and pay electronically.
- For businesses remitting or paying retail sales tax of $5,000 or more per month, filing, remittances and payment will be required electronically.
Other Measures (Not Related to Income Tax)
Expanded Fuel Tax Exemption for the Forestry Industry
Effective 1 June 2019, the exemption will be expanded to include mill site equipment operated for log handling and processing.
Interprovincial Comparison of Tax Rates
(Applicable to end of 2019/2020)
As of February 20, 2019
|
|
CAN |
BC |
AB |
SK |
MB |
ON |
|
Personal Income Tax |
|
|
|
|
|
|
|
Basic Personal Amount |
$12,069 |
$10,682 |
$18,369 |
$16,065 |
$9,626 |
$10,582 |
|
Top rate (%) |
33 |
16.80 |
15 |
14.50 |
17.40 |
20.53 |
|
|
|
|
|
|
|
|
|
Health Care Premiums |
|
$450 |
|
|
|
$900 |
|
Health and Education Tax (%) |
|
1.95% |
|
|
2.15% |
1.95% |
|
|
|
|
|
|
|
|
|
Corporate Income Tax (%) |
|
|
|
|
|
|
|
Small |
9 |
2 |
2 |
2 |
0 |
3.50 |
|
Large |
15 |
12 |
12 |
12 |
12 |
11.50 |
|
Manufacturing |
15 |
12 |
12 |
10 |
12 |
10 |
|
Small business limit ($000) |
500 |
500 |
500 |
600 |
500 |
500 |
|
|
|
|
|
|
|
|
|
Capital Tax on Banks (%) |
|
|
|
4 |
6 |
|
|
|
|
|
|
|
|
|
|
Sales Tax (%) |
5 |
7 |
|
6 |
7 C |
8 |
|
|
|
|
|
|
|
|
|
Fuel Tax |
|
|
|
|
|
|
|
Gasoline (cents/ltr) |
10 |
14.5 |
13 |
15 |
14 |
14.7 |
|
Diesel (cents/ltr) |
4 |
15 |
13 |
15 |
14 |
14.3 |
|
|
|
|
|
|
|
|
|
Carbon Tax |
|
B |
|
|
|
|
|
Gasoline (cents/ltr) |
4.42 |
8.89 |
6.73 |
0 |
0 |
0 |
|
Diesel (cents/ltr) |
5.37 |
10.23 |
8.03 |
0 |
0 |
0 |
Interprovincial Comparison of Tax Rates (cont’d)
(Applicable to end of 2019/2020)
As of February 20, 2019
|
|
QC |
NB |
NS |
PE |
NL |
|
Personal Income Tax |
|
|
|
|
|
|
Basic Personal Amount |
$15,269 |
$10,264 |
$8,481 |
$9,160 |
$9,414 |
|
Top rate (%) |
25.75 |
20.3 |
21 |
16.7 |
18.3 |
|
|
|
|
|
|
|
|
Health Care Premiums |
|
|
|
|
|
|
Health and Education Tax (%) |
4.26% |
|
|
|
2.00% |
|
|
|
|
|
|
|
|
Corporate Income Tax (%) |
|
|
|
|
|
|
Small |
6 |
2.5 |
3 |
3.5 |
3 |
|
Large |
11.6 |
14 |
16 |
16 |
15 |
|
Manufacturing |
11.6 |
14 |
16 |
16 |
15 |
|
Small business limit ($000) |
500 |
500 |
500 |
500 |
500 |
|
|
|
|
|
|
|
|
Capital Tax on Banks (%) |
|
5 |
4 |
5 |
6 |
|
|
|
|
|
|
|
|
Sales Tax (%) |
9.975 |
10 |
10 |
10 |
10 |
|
|
|
|
|
|
|
|
Fuel Tax |
|
|
|
|
|
|
Gasoline (cents/ltr) |
19.2 |
15.5 |
15.5 |
13.1 |
20.5 |
|
Diesel (cents/ltr) |
20.2 |
21.5 |
15.4 |
20.2 |
21.5 |
|
|
|
|
|
|
|
|
Carbon Tax |
|
|
|
B |
D |
|
Gasoline (cents/ltr) |
|
|
|
4.42 |
4.42 |
|
Diesel (cents/ltr) |
|
|
|
5.37 |
5.37 |
- Beginning on April 1, 2019, the federal government’s carbon pricing backstop will apply in any jurisdiction that does not comply with the benchmark.
As of January 1, 2019 the backstop is expected to apply in MB, SK, ON and NB.
NL and PE indicated they will be matching the federal rates.
QC and NS are utilizing a cap and trade system. - BC and PE carbon rate effective April 1, 2019.
- MB retail sales tax effective July 1, 2019.
- NL carbon tax rate effective January 1, 2019.
(Source: Manitoba Government)