On April 2, the Manitoba government released its 2024 budget. The following are highlights of the key tax measures.

Personal tax measures

No personal income tax rate changes were announced in this year’s budget. The current personal combined income tax rates for 2024 are outlined below:

Basic Personal Amount

Beginning in the 2025 tax year, Manitoba will phase out the Basic Personal Amount over a net income range of $200,000 to $400,000.

Renters Tax Credit

For the 2025 tax year, an increased Renters Tax Credit of up to $575 will be provided, and the seniors’ top‑up will be increased to a maximum $328. Both amounts will be increased each year of the current mandate.

Fertility Treatment Tax Credit

For the 2024 tax year, the maximum annual eligible expense amount under the Fertility Treatment Tax Credit is doubled from $20,000 to $40,000, doubling the available annual credit amount from $8,000 to $16,000.

Corporate tax measures

No corporate income tax rate changes were announced in this year’s budget. The current corporate income tax rates for 2024 are outlined below:

Rental Housing Construction Tax Credit

A new Rental Housing Construction Tax Credit will be introduced effective for the 2024 tax year. The tax credit provides $8,500 for the construction of new market‑rate rental units and $13,500 for units classified and maintained as affordable units for a period of at least 10 years. For tax credit eligibility, construction must commence on or after Jan. 1, 2024. This tax credit will be fully refundable to non‑profit organizations. For other businesses, $8,500 will be fully refundable on all units, with an additional $5,000 non‑refundable credit available over 10 years for affordable units.

Data Processing Investment Tax Credits

For the 2025 tax year, the Data Processing Investment Tax Credits will be eliminated.

Cultural Industries Printing Tax Credit

The Cultural Industries Printing Tax Credit, scheduled to expire Dec. 31, 2024, is extended for one year to Dec. 31, 2025.

Other tax measures

School tax

For the 2025 tax year, the School Tax Rebate and Education Property Tax Credit will be replaced with a new Homeowners Affordability Tax Credit of up to $1,500 on principal residences. The Education Property Tax Credit seniors’ top‑up and School Tax Credit are being eliminated, while the Seniors School Tax Rebate is maintained.

The school tax rebate for all other commercial properties (excluding farm properties) is removed in anticipation of the introduction of a new education funding model.

Sales tax registration threshold

Effective Jan. 1, 2024, the sales tax registration threshold for taxable sales increases from $10,000 to $30,000, consistent with the federal government’s $30,000 GST/HST registration threshold.

Sales tax commissions

Sales tax commissions will be eliminated for any filing period ending after April 2024.

Vaping tax

Effective Jan. 1, 2025, Manitoba anticipates doubling the rates of the base duty amount:

• $1 per two millilitres (mL) for containers with less than 10 mL of vaping liquid
• $5 for the first 10 mL plus $1 for every additional 10 mL or fraction thereof for containers with more than 10 mL

Gas tax cut extension

The gas tax cut implemented on Jan. 1, 2024 is extended by three months to Sept. 30, 2024.

Homeowners Affordability Tax Credit and Renters Tax Credit for Mobile Homeowners

Mobile homeowners’ eligibility for these two credits is clarified to stipulate that 50 per cent of mobile homeowners’ license fees and 10 per cent of land rental payments are eligible for the Education Property Tax Credit in 2024, and mobile homeowners are ineligible for the Renters Tax Credit.

Qualified disability trusts

A recovery tax is established to retroactively negate preferential treatment in the case of trust funds not going to the intended qualified beneficiary.

Land transfer tax administrative penalties

Changes are made to allow for the issuance of administrative penalties in certain cases of non‑compliance, such as where an inaccurate fair market value is provided when seeking to register a transfer of land.

Interactive Digital Media Tax Credit

Changes are made to clarify that expenses incurred in relation to eligible projects are claimed in the taxation year in which such costs were incurred. A subcategory of qualifying corporations under the tax credit specifically for Manitoba videogame companies is established. Qualifying corporations in the new subcategory would be exempt from having to apply for a Certificate of Eligibility (pre‑approval) prior to project work commencement. This will help streamline the program, reduce red tape and ease administrative burdens for eligible companies.

Retail sales tax

The following technical clarifications will be implemented:

• Clarifying that interior window coverings remain tangible goods and do not become part of real property.
• Excluding businesses that sell electricity through electric vehicle chargers from having to collect sales tax if the business has paid sales tax on the electricity.
• Eliminating the restriction for sales tax refunds on vehicles bought in Manitoba and subsequently sold out‑of‑province within six months of each other.
• Clarifying the sales tax refund for vehicle appraisals to ensure consistency by specifying the purchase price is to be used when appraisal values are lower than the purchase price.

Provincially administered tax audit periods

The tax audit periods will be codified to a maximum of six years from date of notification, but the six‑year statutory limitation period will not apply when taxes have been collected but not remitted, or where a person made a misrepresentation attributable to neglect, carelessness or willful default. A Notice of Assessment will also be required to be issued at the completion of all tax audits.

Tax clearance certificate and advance ruling fees

Effective May 1, 2024, the $50 tax clearance certificate fee is eliminated. This measure will benefit approximately 600 businesses that apply for a tax clearance annually and is consistent with most Canadian jurisdictions. In addition, the advance ruling fee is eliminated as of May 1, 2024, for provincially administered tax statutes. An advance ruling can be requested by a taxpayer if their business transaction is deemed to be done as part of a tax avoidance transaction. The fee was $300 plus $60 per hour if the ruling exceeded five hours to prepare.

Unmarked tobacco forfeiture

Unmarked tobacco discovered during a search of a building, vehicle or container executed under a warrant will be seized and forfeited to the Crown.

Succession Duty Act repeal

The Succession Duty Act, which applied a tax on the estate of persons who died between 1971 and 1977, is no longer applicable and will be repealed.

Oil and gas production tax record‑keeping requirements

The four-year record-keeping requirement for operators is changed to six years to align with the tax record retention period of the Canada Revenue Agency.

Next steps

Contact your Baker Tilly advisor to learn more about how we can help you navigate the complexities of the Canadian tax system.

Meet the Author

Sean Grant-Young
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