Manitoba Provincial Budget

The Manitoba provincial budget was tabled on March 6. Two new tax initiatives were announced.

Seniors’ School Tax Rebate

A new tax rebate will be available beginning in 2014 for Manitoba residents who are age 65 or older and who own their principal residence. The rebate will be phased in over a three year period with the 2014 payment limited to $235.

Emissions Tax

A new emissions tax, retroactive to January 1, 2014, will be applied to petroleum coke used in Manitoba. The new tax is $10 per of carbon-dioxide-equivalent emissions.

Existing Programs

While the budget contained  few new tax initiatives, it extended or enhanced several existing programs.

Mineral Exploration Tax Credit - The mineral exploration tax credit was extended to April 1, 2018.

Manufacturing Investment Tax Credit, Book Publishing Tax Credit, and Odor Control Tax Credits - These three credits are extended to 2017.

Co-op Education and Apprenticeship Tax Credits - These credits are extended indefinitely.

Small Business Venture Tax Credit - The small business venture tax credit will be enhanced for eligible shares issued after 2014. The following changes will be made:

• The credit rate will be increased from 30% to 45%
• The maximum annual credit that can be claimed will be increased from $45,000 to $67,500
• Existing shareholders who own 10% to 34% of the company will be allowed to purchase creditable shares
• The maximum credit available for investment in a company will increase to $202,500

Cultural Industries Printing Tax Credit - The definition of an eligible book for the cultural industries printing tax credit will be changed. At least 90% of the book must be new material that has not been published elsewhere. Also, if the book is not a children’s book and contains pictures, at least 65% of the book must be text. In addition, the maximum credit per book title is limited to $30,000.

Previously Announced Changes

Manitoba is one of the few provinces where tax brackets and personal amounts are not indexed annually. However, the basic personal amount, spousal amount, and the amount for an eligible dependant are increased from $8,884 to $9,134 for 2014. Manitoba compensates for relatively low personal amount by providing personal tax credits that eliminate provincial taxes for low-income taxpayers.

As a consequence of the federal change to the gross-up of small business dividends announced in the 2013 federal budget, the 2013 Manitoba budget reduced the 2014 Manitoba dividend tax credit for small business dividends from 1.75% of the taxable dividends to 0.83% of the taxable dividends. The result of this change is that the provincial tax on small business dividends, which are currently the highest rate of in Canada, will remain constant for 2014.