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April 14, 2022
Canada | Manitoba issues budget 2022/23
On 12 April 2022, Manitoba Finance Minister Cameron Friesen tabled the province’s fiscal 2022/23 budget. The budget contains several tax measures affecting individuals and corporations.
The Minister anticipates a deficit of CA$1.39 billion1 for 2021/22 and projects a deficit of $548 million for the 2022/23 year.
The following is a brief summary of the key tax measures.
Business tax measures
Corporate tax rates
No changes are proposed to the corporate tax rates or the $500,000 small-business limit.
Manitoba’s (MB) 2022 corporate income tax rates are summarized in Table A.
Table A – 2022 corporate income tax rates*
* Rates represent calendar-year rates.
** The 2021 federal budget proposed to temporarily reduce the federal corporate income tax rate for qualifying zero-emission technology manufacturers by 50% (i.e., to 7.5% for eligible income otherwise subject to the 15% general corporate income tax rate or 4.5% for eligible income otherwise subject to the 9% small-business corporate income tax rate), applicable for taxation years beginning after 2021. The reduced tax rates are proposed to be gradually phased out for taxation years beginning in 2029 and fully phased out for taxation years beginning after 2031.
*** The 2022 federal budget proposed an additional tax on banks and life insurers. See EY Global Tax Alert, Canada’s Federal Budget 2022/23 focuses on growing a more resilient economy, dated 11 April 2022 for details.
Other business tax measures
The Minister also proposed the following business tax measures:
Personal income tax rates
The budget does not include any changes to personal income tax rates.
The 2022 Manitoba personal income tax rates are summarized in Table B.
Table B – 2022 Manitoba income personal tax rates
For taxable income in excess of $100,392, the 2022 combined federal-Manitoba personal income tax rates are outlined in Table C.
Table C – Combined 2022 federal and Manitoba personal income tax rates
* The rate on capital gains is one-half the ordinary income tax rate.
** The federal basic personal amount comprises two elements: the base amount ($12,719 for 2022) and an additional amount ($1,679 for 2022). The additional amount is reduced for individuals with net income in excess of $155,625 and is fully eliminated for individuals with net income in excess of $221,708. Consequently, the additional amount is clawed back on net income in excess of $155,625 until the additional tax credit of $252 is eliminated; this results in additional federal income tax (e.g., 0.38% on ordinary income) on net income between $155,626 and $221,708.
Personal tax credits
This budget proposes changes to the following personal credits/amounts:
Basic personal amount
Other tax measures
Education Property Tax Rebate
Residential Renters Tax Credit
Effective for the 2022 taxation year for renters of residential properties, the renters’ component of the Education Property Tax Credit will become the Residential Renters Tax Credit. Some of the key elements of the new credit are as follows:
Health and post-secondary education tax levy
The exemption threshold is raised from $1.75 million to $2.0 million of annual remuneration effective as of 1 January 2023. The threshold below which employers pay a reduced rate is also raised from $3.5 million to $4.0 million.
Effective 1 May 2022, fuel tax does not apply to fuel consumed in operating off-road peat harvesting equipment.
Administrative tax measures
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (Canada), Winnipeg