Welcome Back and Happy New Year from the Manitoba Chambers of Commerce! As the unified voice of business in our province, we step into 2025 with renewed energy and focus. We welcome the opportunity to serve as your trusted partner again this year, working together with you to navigate Manitoba’s evolving business landscape.
For many Manitoba businesses, 2024 was a challenging year marked by rising costs, continued labour shortages, and an uncertain economic climate. Despite these obstacles, you demonstrated resilience and adaptability, finding innovative ways to thrive.
This year brings new opportunities, challenges, and updates that affect businesses and individuals alike, including tax updates. Let’s dive into what taxation changes Manitoba residents should expect in 2025 – and what they mean for your business, your bottom line, and Manitoba’s economic outlook.
Federal Tax Changes
Basic Personal Amount: Increases by $424 to $16,129
Personal Income Tax Brackets:
- First Tax Bracket (income taxed at 15%): Ceiling increases from $55,867 to $57,375
- Second Tax Bracket (20.5%): Ceiling increases from $111,733 to $114,750
- Third Tax Bracket (26%): Ceiling increases from $173,205 to $177,882
- Fourth Tax Bracket (29%): Ceiling increases from $246,752 to $253,414
- Fifth Tax Bracket (33%): Floor rises to $253,414.
Canada Pension Plan: Maximum pensionable earnings increases by $2,800 to $71,500. This increases the maximum contribution for the year by $166.60 to $4,034.10.
Employment Insurance: The E.I. tax rate drops 0.02% to 1.64%, but the maximum insurable amount increases by $2,500. This results in additional taxes of as much as $28 per worker and $40 per employer.
Carbon Tax: Slated to rise April 1, 2025, to $95 per tonne, increasing taxes on gasoline by 3.3 cents per litre.
Provincial Tax Changes
Basic Personal Amount: Increases by $189 to $15,969. Starting in 2025, this is reduced for people who earn a net income above $200,000 and eliminated altogether for those with a net income above $400,000
Personal Income Tax Brackets:
- First Tax Bracket (income taxed at 10.8%): Ceiling increases from $47,000 to $47,564
- Second Tax Bracket (12.75%): Ceiling increases from $100,000 to $101,200
- Third Tax Bracket (17.4%): Floor rises to $101,200.
Credit for Renters: Increases by $50 to $575
Fuel Tax: Returning January 1 after a one-year absence, the provincial gas tax is now 12.5 cents per litre.
Provincial Property (Education) Taxes
In 2025, the 50% credit is replaced with a $1,500 maximum credit, resulting in savings for some and increased taxes for others. As of January 1, properties with provincial education taxes of $1,500 or less will see this portion of their tax bill eliminated. On the other end, properties with provincial education taxes exceeding $3,000 will pay more provincial education taxes because the $1,500 credit has replaced what used to be a 50% credit.
For Winnipeg property owners specifically, monthly TIPP payments are slated to rise by about 50% on January 1 because the new $1,500 provincial education tax credit will be applied over 12 months this year. TIPP payments from July to December 2024 were artificially low because the old 50% credit was not applied from January to June 2024.
While Manitobans who own lower-value homes will pay less and owners of higher-value homes will pay more, commercial property owners who had been receiving 10% rebates are not eligible for the new credit.
Corporate Taxes
In 2025, there are no changes to Manitoba’s corporate income tax rates or the Health and Post-Secondary Education Tax Levy (payroll tax). The corporate tax rates remain unchanged, and the payroll tax continues to apply as follows:
- Employers with total annual remuneration of $2.25 million or less are exempt from the payroll tax.
- For payrolls between $2.25 million and $4.5 million, a rate of 4.3% applies to the amount exceeding $2.25 million.
- For payrolls over $4.5 million, a rate of 2.15% applies to the total payroll.
Making Manitoba More Competitive
Manitoba must have an effective and fiscally prudent government that is committed to creating a competitive tax environment to attract and retain new investment. While the provincial government has taken significant steps in the past number of years to improve its fiscal situation,it must ensure that economic growth is the driving force behind every decision it makes through the lens of making Manitoba more competitive. The Manitoba Chambers of Commerce will continue to advocate for the elimination of the payroll tax, which has been identified by business leaders as the greatest impediment to economic competitiveness and growth in Manitoba.
