2023 Manitoba budget: Tax highlights

Issue 2023-09

In brief

On March 7, 2023, Manitoba’s Minister of Finance, Cliff Cullen, presented the province’s budget. The budget does not change personal or corporate income tax rates, but does propose to:

• raise the basic personal amount to $15,000 for 2023
• increase the province’s personal income tax brackets for 2024
• effective January 1, 2024, increase the thresholds at which the Health and Post-Secondary Education Tax Levy applies
• expand eligible labour expenditures for the Interactive Digital Media Tax Credit, effective April 1, 2023

This Tax Insights discusses these and other tax initiatives outlined in the budget.

In detail

Personal tax measures

Basic personal amount

The budget proposes to increase the province’s basic personal amount for 2023 to $15,000 (from $10,855, the indexed amount for 2023), providing a provincial tax savings of up to $448.

Personal income tax rates

The budget does not change Manitoba’s personal income tax rates, but does propose increases to the province’s tax bracket thresholds, starting in 2024, as shown below.

1. The thresholds will be indexed after 2024.

The budget notes that Manitoba taxpayers would save up to an additional $1,399 in 2024 from the proposed personal tax measures (see above), as compared to the tax savings that would have resulted from simply indexing the tax bracket thresholds and basic personal amount.  

Top personal tax rates

Top combined federal/Manitoba personal income tax rates are shown below. These rates apply to individuals with taxable income above $235,675 in 2023 ($221,708 in 2022; to be indexed for 2024).

Business tax measures

Corporate income tax rates

Manitoba’s corporate income tax rates will remain as shown in the table below. The table also shows combined federal/Manitoba corporate tax rates.

Health and Post-Secondary Education Tax Levy (payroll tax)

The budget proposes, effective January 1, 2024, to increase the thresholds at which employers are subject to this payroll tax, as shown in the table below. The tax is imposed on wages paid by employers with a permanent establishment in the province. Associated employers with annual payroll of less than $4.5 million would save up to $10,750 in payroll tax annually.

1. The budget states that, if fiscal updates later in the year show better than expected revenue performance, the tax levy rates for 2024 will decrease from 2.15% to 2%, and from 4.3% to 4%. 
2. Associated employers must aggregate their payroll costs to apply the thresholds.

Interactive Digital Media Tax Credit

The budget proposes, effective April 1, 2023, to expand eligible expenditures for this tax credit to allow for more flexible forms of employee compensation and incentives as eligible labour expenditures. This does not include labour expenditures such as bonuses tied to profits or revenues, stock options and signing bonuses, which will remain ineligible expenditures for the credit.

Mineral Exploration Tax Credit

The budget makes the Mineral Exploration Tax Credit permanent. The credit was originally scheduled to expire on December 31, 2023.

In addition, as a result of changes to the Income Tax Act (Canada) to establish the federal Critical Mineral Exploration Tax Credit respecting critical minerals (i.e. copper, nickel, lithium, cobalt, graphite, rare earth elements, scandium, titanium, gallium, vanadium, tellurium, magnesium, zinc, platinum group metal and uranium), minor amendments will be made to Manitoba’s Income Tax Act to ensure that exploration expenses related to critical minerals continue to be eligible for the province's Mineral Exploration Tax Credit.

Green Energy Equipment Tax Credit

The budget makes the Green Energy Equipment Tax Credit permanent. The credit was originally scheduled to expire on June 30, 2023.