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Tax Alert 2021 No. 17, 8 April 2021
“We know Manitobans deserve a break, especially during this pandemic.
That’s why we will take even more steps to protect your incomes by reducing the taxes you pay and helping you keep more of your hard-earned money with you, where it belongs.”
Manitoba Finance Minister Scott Fielding
7 April 2021 press release
On 7 April 2021, Manitoba Finance Minister Scott Fielding tabled the province’s fiscal 2021–22 budget. The budget contains several tax measures affecting individuals and corporations.
The minister anticipates a deficit of $2.08 billion for 2020–21 and projects a deficit of $1.597 billion for the 2021–22 year.
Following is a brief summary of the key tax measures.
No changes are proposed to the corporate tax rates or the $500,000 small-business limit.
Manitoba’s 2021 corporate tax rates are summarized in Table A.
* Rates represent calendar-year rates unless otherwise indicated.
The minister also proposed the following business tax measures:
The budget does not include any changes to personal income tax rates.
The 2021 Manitoba personal tax rates are summarized in Table B.
For taxable income in excess of $98,040, the 2021 combined federal-Manitoba personal income tax rates are outlined in Table C.
* The rate on capital gains is one-half the ordinary income tax rate.
** The federal basic personal amount comprises two elements: the base amount ($12,421 for 2021) and an additional amount ($1,387 for 2021). The additional amount is reduced for individuals with net income in excess of $151,978 and is fully eliminated for individuals with net income in excess of $216,511. Consequently, the additional amount is clawed back on net income in excess of $151,978 until the additional tax credit of $208 is eliminated; this results in additional federal income tax (e.g., 0.32% on ordinary income) on net income between $151,979 and $216,511.
This budget proposes changes to the following personal amounts/credits:
Property owners will begin receiving the Education Property Tax Rebate beginning in 2021. The rebate amounts beginning in 2021 will be as follows:
Property owners will continue to pay education property taxes; however, they will automatically receive the Education Property Tax Rebate in the same month that their municipal property tax payments are due (or earlier). Farm property owners must continue to apply for the Farmland School Tax Rebate.
In conjunction with the Education Property Tax Rebate, existing education property tax offsets will be proportionally reduced by 25% in 2021, as follows:
* The information above was obtained from Manitoba provincial information bulletin no. 121 issued in April 2021.
Exemption for personal services – Effective 1 December 2021, the following personal services will be exempted from tax:
Effective 1 December 2021, streaming service providers will be required to collect and remit retail sales tax on the sale of audio and video streaming services.
Effective 1 December 2021, online marketplaces will be required to collect and remit retail sales tax on taxable goods sold by third parties on their electronic platforms. Additionally, online accommodation platforms will be required to collect and remit retail sales tax on the booking of taxable accommodations in Manitoba.
The exemption threshold will increase from $1.5 million to $1.75 million of annual remuneration, and the threshold below which employers pay a reduced rate will increase from $3.0 million to $3.5 million, both of which are effective 1 January 2022.
For more information, please contact your EY or EY Law advisor or one of the following professionals:
Jason Burbank
+1 204 933 0240 | jason.a.burbank@ca.ey.com
James Jaworsky
+1 204 954 5581 | james.jaworsky@ca.ey.com
Matthew Lapka
+1 204 954 5541 | matthew.lapka@ca.ey.com
Budget information: For up-to-date information on the federal, provincial and territorial budgets, visit ey.com/ca/Budget.