Tax Highlights from the 2025 Manitoba Budget

HIGHLIGHTS FROM THE MANITOBA BUDGET

Minister of Finance Adrien Sala tabled the 2025 Manitoba provincial budget on March 20, 2025.

The budget projects a deficit of $794 million for 2025/26 and anticipates a balanced budget by 2027/28. The forecasted deficit for the nearly completed 2024/25 fiscal year now stands at $1.2 billion, compared to the initial projection of $796 million.

On the income tax front, there are no changes to personal or corporate income tax rates for 2025. However, the budget pauses indexation of the basic personal amount and tax bracket thresholds beginning with the 2025 tax year. It also increases the renter’s affordability tax credit and makes the Cultural Industries Printing tax credit permanent.

The following pages summarize the changes announced in the budget. Please note that these changes remain proposals until passed into law by the provincial government.

PERSONAL TAX MATTERS

Personal Income Tax Rates and Tax Brackets

There are no proposed changes to personal income tax rates for 2025. However, tax indexation of brackets and other amounts has been paused for the 2025 tax year. The table below outlines Manitoba’s tax rates and tax brackets for 2025.

The table below outlines the 2025 combined federal and provincial highest marginal tax rates for various types of income.

Basic Personal Amount (BPA)

The Basic Personal Amount (BPA) is a non-refundable tax credit that Manitoba residents claim on their personal income tax return. The BPA has been indexed since 2017 but will pause increases to its threshold in 2025, keeping the amount unchanged at $15,780 for the 2025 tax year.

Renters Affordability Tax Credit

The Renters Affordability tax credit is an income tax credit available to renters to help offset rental costs. For the 2026 tax year, the maximum credit will increase to $625, while the seniors’ top-up will rise to a maximum of $357.

Both amounts will continue to increase annually throughout the current mandate, as part of the Manitoba government’s commitment to restoring this credit to its previous level of $700, with the seniors’ top-up reaching $400.

Volunteer Firefighter and Search and Rescue Amount

The Volunteer Firefighter and Search and Rescue Amount is a non-refundable tax credit available to volunteer firefighters and volunteer search and rescue personnel. Effective for the 2025 tax year, this credit amount will double from $3,000 to $6,000, increasing the maximum annual value of the credit to $648.

Homeowners Affordability Tax Credit

The Homeowners Affordability tax credit is a new tax credit providing homeowners with up to $1,500 in relief on their school taxes in 2025. For the 2026 property tax year, the maximum credit will increase by $100, from $1,500 to $1,600. Homeowners with gross school tax bills exceeding $1,500 in 2026 will benefit from this increase, as up to an additional $100 of their school taxes will now be covered by the credit.

CORPORATE TAX MATTERS

Corporate Income Tax Rates

There are no proposed changes to corporate income tax rates. The table below outlines Manitoba’s tax rates and the small business limit for 2025.

The table below outlines the 2025 combined federal and provincial corporate income tax rates for various types of income earned by a Canadian Controlled Private Corporation (CCPC).

Corporation Capital Tax Act

Effective for fiscal years beginning after March 31, 2025, the corporation capital tax paid by Crown corporations will be eliminated. This measure simplifies administration for Crown corporations and does not have a financial impact, as these corporations are included in the summary budget.

Health and Post Secondary Education Tax Levy

The Health and Post Secondary Education tax levy is a tax imposed on remuneration paid to employees by employers with a permanent establishment in Manitoba.

Effective January 1, 2026, the exemption threshold will increase from $2.25 million to $2.5 million in annual remuneration. Additionally, the threshold below which businesses pay a reduced effective rate will increase from $4.5 million to $5 million.

Cultural Industries Printing Tax Credit

The Cultural Industries Printing Tax Credit, which previously applied to eligible expenses incurred until December 31, 2024, is now permanent. This tax credit provides Manitoba’s printing industry with a 35% refundable credit on salary and wages paid to Manitoba employees.

OTHER INITIATIVES

Cloud Computing

Effective January 1, 2026, retail sales tax will apply to cloud computing services, including subscriptions to software, data storage, and remote computer processing.

Mining Tax Act

The new Mining Investment tax credit will be repealed, as it no longer applies to investments made before January 1, 2004. Additionally, the requirement for the Minister of Finance to designate a new mine or major expansion will be eliminated, along with the special tax rate of 0.5% that was applied in addition to regular tax rates on mining operators’ profits.

WE CAN HELP

Your financial advisor can help you assess the impact of these proposals on your personal finances or business affairs and show you ways to take advantage of their benefits or ease their impact.

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