|Download the budget highlights as a PDF file.|
On April 12, 2011, Manitoba’s Minister of Finance, Rosann Wowchuk, presented the province’s 2011 budget. Of interest to business, the budget introduces a capital tax exemption for small banks, enhances existing tax credits and introduces tax credits that assist Manitoba printers and encourage certain charitable activities. For individuals, the budget increases and
extends several tax credits and introduces a Children’s Arts and Cultural Activity Tax Credit. These and other key measures are discussed below and in the PDF above.
Corporate income tax rates
The budget leaves intact Manitoba’s 12% general corporate rate, which also applies to manufacturing and processing (M&P) income. It does not provide the date for this rate to decline to 11%, as had been proposed in the 2008 budget.
As previously announced, Manitoba’s small business rate was eliminated on December 1, 2010. The rate had been 1%. The province’s small business limit will remain $400,000.
The following combined federal/Manitoba rates apply to December 31 year ends:
Banks with taxable capital under $4 billion will be exempt from Manitoba’s 3% Financial Institutions capital tax, for taxation years ending after April 12, 2011.
The general capital tax was eliminated on January 1, 2011 (July 1, 2008, for certain M&P corporations).
The following tax credits will expire on December 31, 2014, instead of on December 31, 2011:
As well, taxpayers will be able to elect to renounce all or part of the Manitoba Investment Tax Credit and the Odour Control Tax Credit.
Other changes to tax credits are described below.
Publishing industry tax credits
The following changes affect publishers:
Green Energy Equipment Tax Credit
The total Green Energy Equipment Tax Credit on geothermal heating systems will increase from 10% to 15% for installations after April 12, 2011. In addition, the tax credit will increase from:
Neighbourhoods Alive! Tax Credit
The new 30% Neighbourhoods Alive! Tax Credit is available to corporations with a permanent establishment in Manitoba that donate funds to charitable organizations to create new social enterprises:
The maximum annual tax credit of $15,000 (based on a minimum $50,000 donation in the previous year) offsets Manitoba income taxes payable in the year. Unused credits can be carried back three years (to tax years ending after April 12, 2011) or forward ten years. To claim the credit, the corporation must also provide in-kind services to the charity during the year that support developing, managing and operating the social enterprise.
The newly created social enterprise must be 100% owned and controlled by a charitable organization in Manitoba. Its charitable purpose must match the charity and its mandate must include hiring hard-to-employ Manitobans facing multiple barriers to employment.
Personal income tax rates
Top personal tax rates
Previously announced federal and Manitoba changes result in the following top combined federal/Manitoba personal tax rates:
The budget increases the following tax credits:
The following tax credits are extended by three years:
Other tax credit changes are described below.
Children’s Arts and Cultural Activity Tax Credit
Commencing 2011, a non-refundable income tax credit can be claimed on costs of up to $500 for eligible artistic and cultural activities for each child under 16. An additional $500 qualifies for the credit for each child under 18 with a disability on whom at least $100 is spent on eligible activities.
Fertility Treatment Tax Credit
Retroactive to October 1, 2010, the Fertility Treatment Tax Credit:
The rules will clarify that fertility treatments to reverse elective sterilization procedures will not qualify for
Municipalities will be exempt from paying sales tax:
Starting May 1, 2011, the following will not be subject to sales tax:
Also starting May 1, 2011, sales tax will be reduced for business assets brought into Manitoba for 15 days or less.
Effective midnight, April 12, 2011, the tobacco tax rate
will increase by 2¢ per cigarette and by 2¢ per gram on fine-cut tobacco and raw leaf tobacco.
Farmland School Tax Rebate
Commencing 2011, the Farmland School Tax Rebate will increase from 75% to 80%.
Starting January 1, 2012, an Emissions Tax equal to $10 per tonne of carbon-dioxide-equivalent emissions will apply to coal used in Manitoba. On January 1, 2014, Manitoba will ban coal used for space and water heating.
Land Transfer Tax
The Land Transfer Tax exemption on transfers of title between common-law partners will extend to partners registered under The Vital Statistics Act, retroactive to 2004. Transferees can apply for a refund of tax paid.
Online tax payments
Effective May 1, 2011, businesses can pay Manitoba taxes through financial institution online bill