Another Reason to File a Tax Return:  More Provincial Inflation Fighting Relief

Ashley Redmond

It's a welcome relief from a 40-year high in inflationary pressures in the middle of a frigid winter spell and best of all, it’s tax free.  On January 26, 2023, Manitoba’s Premier, Heather Stefanson, unveiled a $200 million Carbon Tax Relief Fund to help Manitobans cope with the impacts of rising winter costs from food to fuel. But, to get it, a 2021 tax return needs to be filed. 

Here are the details:

The 2023 Carbon Tax Relief Fund will help seniors, singles and couples with or without children who lived in the province on Dec. 31, 2021, and whose family net income that year was less than $175,000, according to the Press Release.

It notes that The Carbon Tax Relief Fund will provide $225 per single person and $375 per couple. For couples, the lower income earner will receive the payment.

“Our initial affordability package focused on helping families with children address back-to-school costs and seniors with fixed or low incomes address inflation-related challenges,” said the premier. “Our new Carbon Tax Relief Fund will broaden access to support almost every Manitoban who has to drive to work, take their kids to activities or go out to buy groceries.”

Statistics Canada’s Consumer Price Index reached a near 40-year high in June 2022 in Manitoba, peaking at 9.4 per cent growth year over year. In December 2022, the rate of growth was eight per cent, the highest among all provinces.

According to the Consumer Price Index:

In 2022, Manitoba consumer prices rose in all eight major components, with two of the categories outpacing the all-items increase of 7.8%. Highlights include the following: 

Transportation costs led all provinces with a 15.9% in 2022 after recording an increase of 7.6% in 2021. This was led by a 35.5% increase in Gasoline prices (+33.9% in 2021). 

Food prices grew 8.9% in 2022, up from 1.8% in 2021. However, compared to the other provinces, the increase in Manitoba Food prices were among the lowest.

Manitoba’s largest weighted category, Shelter, continues to see its price increases either match or outpace the national average since 2011. After recording the third largest increase in 2021 (+4.6%), Manitoba Shelter costs rose by 7.6% in 2022. Nationally, prices rose 3.9% in 2021 and 6.9% in 2022. The latest annual increase in Shelter prices was the highest since 1983, where Manitoba and Canada prices rose 8.9% and 7.2%, respectively.

Stefanson noted historic tax relief measures were also part of Budget 2022 with a $2,020 Tax Rollback Guarantee, which has now been exceeded to $2,400 or $4,800 for a two-income family. 2023 is already proving to be a challenging year for finances in general and many Canadian families are struggling.

What can you do? File your taxes on time and catch up if you have unfiled returns from the past.  Chances are you are missing out on lucrative refunds, refundable tax credits and inflation fighting measures.    

Bottom Line: Advisors – be their voice!  2023 is the year to prepare your clients for more tax free benefits available from the federal and provincial governments.  Join us for February 7 CE In-Person Summit – The CE Summit Event in Toronto, at the Pearson Convention Center for tips and traps in filing 2022 tax returns. There will be excellent networking opportunities, and a full-day of live instruction presented by your acclaimed tax specialists:

Evelyn Jacks, President Knowledge Bureau, RWM™, MFA™, MFA-P™ DFA-Tax Services Specialist™

Dr. Dean Smith, PHD, CFP, TEP, CPA, CA, RWM™

If you can’t attend checkout the course: 2023 Advance T1 Tax Update for 2022 Returns. Similar material is covered.

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