On 20 March 2025, Manitoba Finance Minister Adrien Sala tabled the province's fiscal 2025-26 budget. The budget contains several tax measures affecting individuals and corporations.

The minister anticipates a CA$794m deficit for 2025-26 and projects a deficit for 2026-27, followed by a small surplus for 2027-28.

A brief summary of the key tax measures follows.

Business tax measures

Corporate income tax rates

No changes are proposed to the corporate income tax rates or the CA$500,000 small-business limit.

Manitoba's 2025 corporate income tax rates are summarized in Table A.

Table A — 2025 Manitoba corporate income tax rates¹

¹ The rates represent calendar-year-end rates unless otherwise indicated.

² The federal corporate income tax rates for manufacturers of qualifying zero-emission technology are reduced to 7.5% for eligible income otherwise subject to the 15% federal general corporate income tax rate or 4.5% for eligible income otherwise subject to the 9% federal small-business corporate income tax rate. These reductions are not reflected in the combined federal and Manitoba rates, above.

³ Id.

⁴ An additional federal tax applies to banks and life insurers at a rate of 1.5% on taxable income (subject to a CA$100m exemption to be shared by group members).

Other business tax measures

The minister also proposed the following business tax measures:

• Health and post-secondary education tax levy — Effective 1 January 2026, the threshold for the payroll tax exemption is increased to CA$2.5m (from CA$2.25m) of annual remuneration. The upper limit for the application of a reduced effective rate is also increased to CA$5m (from CA$4.5m) of annual remuneration.
• Cultural industries printing tax credit — The budget confirms that this refundable tax credit is to be made permanent.

Personal tax

Personal income tax rates

The budget does not include any changes to personal income tax rates. However, the budget proposes to freeze indexation to inflation of the basic personal amount and the tax bracket thresholds, beginning in 2025. As such, the basic personal amount for 2025 will be CA$15,780.

The proposed tax bracket thresholds for 2025 are outlined in Table B.

Table B — 2025 Manitoba personal income tax rates

For taxable income exceeding CA$200,000, the 2025 combined federal-Manitoba personal income tax rates are outlined in Table C.

Table C — Combined 2025 federal and Manitoba personal income tax rates

¹ The rate on capital gains is one-half the ordinary income tax rate.

² The federal basic personal amount comprises two elements: the base amount (CA$14,538 for 2025) and an additional amount (CA$1,591 for 2025). The additional amount is reduced for individuals with net income exceeding CA$177,882 and is fully eliminated for individuals with net income exceeding CA$253,414. Consequently, the additional amount is clawed back on net income exceeding CA$177,882 until the additional tax credit of CA$239 is eliminated; this results in additional federal income tax (e.g., 0.32% on ordinary income) on net income between CA$177,883 and CA$253,414.

³ The full Manitoba basic personal amount is available for individuals with net income below CA$200,000. The basic personal amount is gradually reduced for individuals with net income exceeding CA$200,000 and is fully eliminated for individuals with net income of CA$400,000 or more. Consequently, the amount is clawed back on net income exceeding CA$200,000 until the tax credit of CA$1,704 is eliminated; this results in additional provincial income tax (e.g., 0.85% on ordinary income) on net income between CA$200,001 and CA$400,000.

⁴ Id.

Personal tax credits

This budget proposes changes to the following personal credits/amounts:

• Renters affordability tax credit — For the 2026 tax year, the renters affordability tax credit will be increased to a maximum amount of CA$625. The seniors top-up amount will also increase to a maximum amount of CA$357. The Manitoba government intends to make further increases in future years until the credit reaches CA$700 and the seniors top-up reaches CA$400.
• Volunteer firefighter and search and rescue amount — Budget 2025 announces the doubling of this amount to CA$6,000, resulting in a maximum nonrefundable credit of CA$648 for the 2025 tax year.

Retail sales tax measures

The budget proposes to apply retail sales tax to various cloud computing services, effective 1 January 2026. Examples of proposed in-scope services include software subscriptions, data storage services and remote computer processing services.

Other tax measures

School tax-related credits

The homeowners affordability tax credit is increased to a maximum amount of CA$1,600 (from CA$1,500) for the 2026 property tax year.

Administrative tax measures

The budget announced several administrative measures, including:

• Mining tax — Technical changes to the Mining Tax Act, including removing the requirement for the Minister of Finance to designate a new mine or major expansion and removing the 0.5% special tax rate on the profit of all mining operators
• Corporation capital tax — Effective for fiscal years beginning on or after 1 April 2025, removal of the requirement for Crown corporations to pay corporation capital tax
• Retail sales tax and tobacco tax — Introduction of an online system allowing taxpayers to check that a business is registered for retail sales tax, with another system being developed for tobacco tax
• Land transfer tax — Review of the land transfer tax system to prevent tax avoidance using legal structures that separate legal and beneficial ownership of property
• Tobacco band assessment agreements — Updated tobacco band assessment agreements to a 10-year duration (from five years) and reduced administrative fee from 1.0% to 0.25%
• Income tax — Changes to the Income Tax Act to make trusts ineligible for the family tax benefit