Manitoba Budget: Finally, Inflation-Adjusted Tax Brackets & BPA

Manitoba’s new government released its first provincial budget on May 31st, announcing three important personal tax changes that signal a change in direction from the previous regime. Small business in Manitoba also got enhancements to three tax credits.

Indexation
Effective January 1, 2017, Manitoba tax brackets and the basic personal amount will be indexed to the Manitoba consumer price index. Indexation will be based on the increase in the Manitoba CPI from October of the second prior year to September of the prior year. Thus the indexation factor for 2017 will be based on the increase in the Manitoba CPI from October 2015 to September2016. Other personal amounts, although indexed at the federal level, will remain static as they relate to provincial taxation in Manitoba, unless increased by subsequent legislation.

Manitoba Seniors’ School Tax Rebate
The Seniors’ School Tax Rebate increase announced in the March Economic Update will not come into effect after all. The maximum rebate will remain at $470. However, starting in 2016 the rebate will be claimed on the income tax return. In the future, this will allow for claims for up to three prior years (but not before 2016). In addition, the rebate will now be available to seniors who occupy their principal residence and pay school taxes even if they do not own the land or the dwelling unit.

Interactive Digital Media Tax Credit
Although this refundable corporate tax credit was not changed, the budget promised that the credit will be reviewed to consider enhancements to the eligibility criteria.

Small Business Venture Capital Tax Credit
The Small Business Venture Capital Tax Credit will be extended an additional three years to the end of 2019. This credit will be reviewed to improve accessibility to it for Manitoba companies.

Green Energy Equipment Tax Credit
Eligibility for this refundable credit will be expanded to include gasification equipment and equipment for co-generation of energy using biomass fuel.

Tax Credit Review
The budget promises that the provincial personal and business tax credit system will be reviewed to determine how well the existing credits are serving individuals and business.

Additional educational resource: Knowledge Bureau's EverGreen Explanatory Notes.

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