On March 7, 2019, Finance Minister Scott Fielding tabled Manitoba’s 2019-20 budget.
The provincial government forecasts strong revenue growth in 2019-20 with a projected increase of $238 million, or 1.4% from last year.The estimates provided in Budget 2019 show that the province’s deficit for the 2018-19 fiscal year is $51 million less than the deficit projected for the same fiscal year in the previous budget.
From a fiscal perspective, the province is expecting to continue reducing the provincial deficit according to the following projection:
Retail sales tax measures
Budget 2019 includes a long-promised reduction to the retail sales tax (RST) rate. Effective July 1, 2019, the general retail sales tax rate will decrease from 8% to 7%.
As a result of this 1% reduction, Manitoba’s RST rate will now be the same as British Columbia’s provincial sales tax (PST) rate, although it still remains higher than Saskatchewan’s 6% PST rate.
In addition to the reduction in the general RST rate, there is also a decrease in RST rate from 4.5% to 4% on mobile, modular and ready-to-move homes. Furthermore, the existing reduced RST charged on electricity used in manufacturing, mining and processing operations will also fall from 1.6% to 1.4%. These changes are effective July 1, 2019.
Manitoba has confirmed that RST will not apply to the federal carbon tax levied on natural gas and coal, beginning April 1, 2019.
Vendors making taxable sales and purchasers required to self-assess RST will need to consider the transitional rules for transactions straddling July 1, 2019, to determine the correct rate that needs to be charged.
Business tax measures
Corporate tax rates
No changes to the corporate tax rates, or the $500,000 small business limit, are proposed.
Manitoba’s corporate tax rates for 2019 are summarized as follows:
Combined federal and Manitoba corporate tax rates
Tax credit changes
The following credits or exemptions have been revised as a result of Budget 2019: Tax credit changes