On April 7th, the provincial government delivered the 2021 Manitoba Budget. CFIB pushed hard to ensure this Budget would provide help so Manitoba's businesses and economy can recover.
2021 Manitoba Budget Highlights:
Cost relief for businesses:
- A new education property tax rebate will be issued this summer to give commercial property owners back 10% of their bill this year.
- Farmland property owners will get a 25% education property tax rebate in 2021 and an additional 25% back in 2022.
- Health and Post Second Education Tax Levy: The province announced that the Manitoba Payroll Tax brackets will increase again on January 1st, 2022. The exemption will increase from $1.50 million to $1.75 million and the upper bracket will increase from $3.0 million to $3.5 million.
- On December 1st, PST will be removed for many personal services including haircuts at salons, non-medical skin treatments, aesthetics, spa services, tattoos, etc.
- The Small Business Venture Capital Tax Credit maximum eligible investment will increase from $450,000 to $500,000 for this tax year. The maximum claimable credit will also increase from $67,500 to $120,000.
Deficits and spending:
- The 2021-22 summary deficit is expected to be $1.597 billion. The government recently announced that it may take until 2028-29 to return to balanced budgets.
- The Q3 update from the 2020-21 deficit forecast increased slightly from $2.05 to $2.08 billion.
- The province has earmarked $630 million for road construction and maintenance.
- Importantly, $300 million has been set aside as a contingency for unbudgeted expenses.
- Last, but not least, $62 million has been budgeted to help businesses retrain employees. Roughly $45 million of this funding was previously committed.
Red tape reduction:
- The provincial government reaffirmed their commitment to reducing red tape and plan to reduce the regulatory burden by another 2.5%.
Other noteworthy changes:
- On December 1st, the province will begin charging PST on new types of online businesses and services.
- Online marketplaces will be required to collect and remit sales tax on the sale of taxable goods sold to Manitobans on their electronic platforms.
- Online accommodation platforms will be required to collect and remit sales tax on the booking of taxable accommodations in Manitoba.
- Streaming service providers will be required to collect and remit sales tax on the sale of their audio and video streaming services to Manitobans.
CFIB’s 2021-22 pre-budget recommendations:
We worked hard to make sure your priorities were the focus of Manitoba’s 2021-2022 Budget. On February 11th, CFIB met with Manitoba's Minister of Finance, Hon. Scott Fielding, to share our latest research and members’ priorities for the upcoming Budget. We also met with Mark Wasyliw, the Deputy House Leader for the Official Opposition and Critic for Finance, on February 24th to share the same presentation.
Priority #1 – Measures to support small businesses and help our economy recover
- Ensure the commitment to eliminate Education Property Taxes remains on schedule to begin in 2021;
- Further increase the Health and Post Secondary Education Tax Levy exemption threshold to $2.5 million;
- Deliver immediate provincial relief measures for small businesses to help bridge Manitoba’s small businesses through significant operating restrictions such as:
- Develop an adaptation program similar to those in PEI and SK to help businesses cover costs related to COVID-19 compliance, prevention and adaptation;
- Work with industry groups to identify tax incentive/rebate programs to stimulate consumer spending and accelerate our economic recovery;
- (e.g. the fitness industry has proposed a Provincial Fitness Tax Credit, New Brunswick offered the Explore NB Travel Incentive);
- Work with industries that need sector-specific help to ensure those that remain significantly impacted by provincial and federal health orders get the help they need;
- Oppose planned federal carbon tax and CPP increases, as well as any EI premium increases for the next 4 years.
Recommendations acted upon since meeting on February 11th:
- Provided a 3rd Manitoba Bridge Grant for businesses that remain significantly or entirely closed in March 2021;
- Announced sector-specific help to industries significant impacted by restrictions including businesses in the hospitality and arts sectors;
- Extended some tax deferrals and remittances to help businesses with cashflow challenges.
Priority #2 – Continue reducing red tape
- Consult with businesses and stakeholders annually to identify red tape headaches in different sectors, especially now to help remove barriers to our economic recovery;
- Improve communications of requirements and changes with business owners through an online business portal;
- Introduce a Taxpayer Fairness and Service Code;
- Work with stakeholders in the construction industry to pass prompt payment legislation or a similar policy;
- Continue reducing inter-provincial trade barriers;
- Work with the City of Winnipeg and other municipalities to cut red tape with permits and mitigate the impacts of municipal and provincial roadwork.
Join the Fight!
Many of Manitoba’s businesses still need to survive the COVID-19 pandemic and the corresponding public health restrictions. Helping businesses stay afloat and speeding our economic recovery must be the government's priority. Sign our petition today to help Save Manitoba Businesses!