Finance Minister Rosann Wowchuk presented the 2011 Manitoba budget this afternoon. This will be the government’s final budget prior to the October 2011 provincial election. The following is a summary of the tax highlights contained in the budget.

Measures concerning business

  • The Manufacturing Investment Tax Credit provides companies with a 10% investment tax credit on expenditures for both new and used manufacturing assets, such as buildings and machinery. 70% of this credit is refundable. This tax credit was set to expire on December 31, 2011 but has been extended to December 31, 2014.
  • Banks with taxable paid-up capital under $4 billion are exempted from the 3% capital tax, beginning with taxation years ending after April 12, 2011.
  • The Cultural Industries Printing Tax Credit is a new 15% refundable credit for Manitoba printers for costs relating to publishing Canadian-authored, non-periodical books. Eligible costs incurred after April 12, 2011 and before 2015 will qualify for the credit.
  • The Book Publishing Tax Credit has been extended to December 31, 2014, and the list of expenditures eligible for the credit has been expanded.
  • A new Neighbourhoods Alive! Tax Credit has been introduced to provide a non-refundable tax credit on corporate charitable donations to new social enterprises established by charitable organizations. To qualify for the credit, the corporation must make certain minimum donations and provide in-kind services to the enterprise.

Measures concerning individuals

  • The basic personal amounts, spousal amounts and eligible dependent amounts are being increased gradually from $8,134 in 2010 to $9,134 in 2014. The amount for 2011 will be $8,384.
  • The Basic Education Property Tax Credit is increased from $650 to $700 commencing in 2011.
  • The maximum Seniors’ Education Property Tax Credit is increased from $800 to $950 in 2011; it will increase to $1,025 in 2012 and to $1,100 in 2013.
  • A new Children’s Arts and Cultural Activity Tax Credit is introduced, providing a 10.8% non-refundable credit (to a maximum of $54 on $500 of eligible costs) on expenditures relating to various arts and cultural activities such as music lessons, dramatic arts, dance and visual arts, and wilderness activities.
  • The Primary Caregiver Tax Credit is increased by 25% from a maximum annual amount of $1,020 to $1,275 commencing in 2011.
  • The Mineral Exploration Tax Credit, a non-refundable credit of up to 30% of expenditures relating to flow-through shares of qualifying mineral exploration companies, was set to expire in March 2012. This credit has been extended to cover flow-through share agreements entered into before April 1, 2015.
  • The Community Enterprise Development Tax Credit, set to expire on December 31, 2011, will be extended to December 31, 2014. This non-refundable credit provides an investor with a 30% tax credit on maximum annual investments of $30,000 for a maximum credit of $9,000.

Sales tax measures

  • The sales tax exemption on straw pellets used for heating or cooking is expanded to include biomass materials, such as wood, wheat, flax, hemp and corn, commencing May 1, 2011.
  • The tax credit for Manitoba manufacturers of qualifying geothermal heat pumps will increase from 5% to 7.5% for installations after April 12, 2011. The tax credit for purchasers of made-in-Manitoba geothermal heat pumps installed in Manitoba will also increase from 5% to 7.5%. The tax credit for other eligible installation costs for geothermal heating systems will be increased from 10% to 15%.
  • The sales tax exemption for municipalities is expanded to include sandbag-filling services and certain flood protection materials such as sand/salt mixture for sandbags and sandbag ties, effective March 1, 2011.

For further details, we refer you to the Ministry of Finance website.

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