On April 11, 2017, the Honourable Cameron Friesen, Minister of Finance, presented the 2017 Manitoba budget. This year’s budget, referred to by the Minister as “Responsible Recovery”, focuses on changes to eliminate under-utilized and so-called “boutique” tax credits, improve services and strengthen the economy.
The budget announced that commodity, fuel and tobacco taxes will remain at current levels.
However, two minor sales tax changes were presented in the budget documents. For retail sales tax (“PST”) purposes, a simplified formula for calculating the amount of PST to be self-assessed on the purchase of underground cabling was introduced. Where an invoice for underground cable installation services outside of a building does not separately identify the earthwork and cable installation or hook-up portions of the services provided, the purchaser may self-assess tax based on 10% of the total contract price (excluding GST).
In addition, the province intends to introduce changes that will allow for the suspension of the driver’s licence of a person found to be using a vehicle in the commission of a tobacco tax offence. This suspension would be in addition to any other applicable penalty.
To reduce the complexity of Manitoba’s tax credit system, several corporate income tax credits will be eliminated, effective after April 11, 2017. The government is eliminating several high compliance cost, low participation rate tax credits, such as the Odour Control Tax Credit and Data Processing Investment Tax Credits, amongst others.
To encourage business investment, the following tax credits will be extended:
Reductions to the Research and Development Tax Credit and Manufacturing Investment Tax Credit were also announced.
The budget introduced several personal income tax measures, including savings for Manitoba residents driven by indexing the personal income tax brackets to inflation, and the phase out of the Tuition Fee Income Tax Rebate. The budget also confirmed that the province will maintain its support for several personal income tax credit programs being phased out by the federal government, and reiterated the province’s commitment to enhancing enforcement procedures and reviewing its provincial tax system going forward, with a view to possibly lowering its PST rate in the future.
Further details on the 2017 Manitoba budget are available on the province’s website at: http://www.gov.mb.ca/budget2017/index.html