On March 20, 2025, Minister of Finance Adrien Sala presented Manitoba’s 2025 budget. Touting historic capital investment and projecting a deficit of $794 million for 2025–26, this year’s budget focuses on measures designed to rebuild the province’s healthcare system, facilitate economic growth, address the rising cost of living, and promote community safety.
The budget also contains a host of measures to respond to ongoing and potential future tariff threats, including a contingency fund for targeted support and a tax deferral program for businesses.
In addition to freezing the indexation of personal income tax brackets and the basic personal amount, as well as increasing a couple of personal income tax credits, the budget includes several tax changes of interest to businesses, as summarized below.
Retail Sales Tax Measures
Cloud Computing Services
This year’s budget proposes to make cloud computing services, including subscriptions to software, data storage, and remote computer processing, subject to retail sales tax (PST), commencing on January 1, 2026. This is a significant departure from how the province has traditionally applied PST to software. Currently, only remotely accessed software downloaded to a server in Manitoba is subject to tax.
Further information on this significant change can be found in Manitoba Information Bulletin RST 033, "Computer Software and Online Services."
Remittance Deferral
The budget also reminds registrants that they may defer PST remittances for this year’s February, March, and April returns to June 20, 2025, free of interest and penalties. This deferral is a temporary measure intended to help combat the impact of tariffs imposed by the U.S. on certain goods from Canada. The PST remittance deferral is optional, and it also applies to quarterly filers for the March return. Note that any required returns must still be filed by their respective due dates, and interest and penalties will continue to apply to any tax debts created prior to this relief or where a registrant fails to file a return, as required, by the due date.
Gas Tax Measure
As part of this year’s budget, the government reminded taxpayers that the previously announced 10% decrease in the provincial fuel tax rate for gasoline, diesel, and marked gasoline has been made permanent, effective January 1, 2025.
Payroll Tax Measure
To help Manitoba employers, the budget proposes to raise the Health and Post Secondary Education Tax Levy exemption threshold to $2.5 million (from $2.25 million) and increase the corresponding reduced levy rate threshold to $5 million (from $4.5 million), effective January 1, 2026.
Corporate Tax Measures
Corporation Capital Tax Eliminated for Crown Corporations
The province has announced that, effective for fiscal years beginning after March 31, 2025, crown corporations will no longer be subject to corporation capital tax. Note that this tax will continue to apply other entities, including banks and trust and loan corporations.
Cultural Industries Printing Tax Credit
The budget confirms that the Cultural Industries Printing Tax Credit, which provides a 35% refundable credit on eligible salaries and wages, has been made permanent.
Mining Tax Clarifications
The budget also includes proposed amendments to Manitoba’s mining tax, including elimination of both the special 0.5% refundable surtax on mining operator profits and the existing requirement for the Minister of Finance to designate a new mine or major expansion.
Property Tax Measures
School Tax Rebates and Credits
As announced in last year’s budget, the province has replaced its previous school tax rebates and credits with the Homeowners Affordability Tax Credit, which provides up to $1,500 in property tax relief for principal residences in Manitoba. In this year’s budget, the government announced that this credit will be increased by $100 to a maximum of $1,600 for the 2026 property tax year.
For commercial and industrial properties, the removal of the 10% Education Tax Rebate previously in place—and applied to 2024 tax bills—will result in an increase of approximately 6.5% for 2025 property taxes over last year (before considering any assessment and mill rate differences). However, the impact on multi-residential properties will be far greater due to the removal of the 50% Education Tax Rebate applicable in 2024, resulting in a property tax increase of approximately 25% for 2025.
Notwithstanding the removal of the rebates, actual 2025 combined property tax mill rates in the City of Winnipeg remain relatively flat compared to 2024, considering the following:
- Winnipeg previously announcing a reduction in the municipal mill rate for 2025, despite also announcing a 5.95% increase in property tax for the same year, as a result of the increased assessment base
- The Provincial Education Support Tax Levy decreasing by 10%
- Overall combined 2025 mill rates across the city being slightly lower for commercial and industrial properties, and nearly level for multi-residential properties, despite the escalation of school division mill rates
However, once the removal of the Education Tax Rebates is considered, it appears that, overall, 2025 property tax rates (without considering increases in assessed value and depending on school division) will rise as follows:
- Between 2.19% and 5.11% for commercial or industrial properties
- Between 27.01% and 37.31% for multi-residential properties
Land Transfer Tax
The government has indicated that future legislative amendments are under consideration to prevent the avoidance of land transfer tax through the separation of legal and beneficial ownership of a property.
Tax Administration Measures
Among other administrative measures and technical clarifications, the government has announced the following:
- The implementation of online registries for both PST and tobacco tax purposes
- The updating of agreements under the Tobacco Band Assessment Program to increase the term to 10 years and reduce the administration fee from 1% to 0.25%
Potential Impact of Tariffs
The budget outlines several steps taken by the government to mitigate the impact of tariffs imposed by Manitoba’s trade partners and reinforce the provincial economy in preparation for future challenges. The government’s plan includes removing interprovincial trade barriers, sourcing government supplies and contracts from Canadian providers, and strengthening key industries in Manitoba, including agriculture, minerals, and hydroelectric generation.
Furthermore, the government has acknowledged that the economic impact of sustained tariffs in the coming year could push Manitoba’s projected deficit to approximately $1.9 billion, including revenue reserves and $500 million in contingency funding to directly support affected industries, businesses, and residents.
More Information
Further information on Manitoba's 2025 budget may be found on the province's website.
To read key updates from all of Canada’s latest provincial budgets, please visit our Key Changes | 2025 Canadian Federal and Provincial Budgets page.
If you have any questions about how changes proposed in recent Canadian budgets might impact your organization, please do not hesitate to contact the Ryan TaxDirect® line at 1.800.667.1600 or taxdirect@ryan.com.