A reduced rate of PST on hydro in manufacturing, mining and processing operations has been available since 1994. As of July 1, 2013, the reduced rate is 1.6% rather than 8.0% PST. The government allocates 20% of electricity to be ineligible for this program as it is used for lighting, heating, etc., rather than the manufacturing, mining and processing operations.
The program is not retroactive. When Manitoba Finance approves your company’s application, your reduced PST rate will be effective for the electricity cycle billings issued on or after the date your application was received by Manitoba Finance. Should your business move to another Manitoba address, it’s important to notify Manitoba Finance about the change of address to ensure the tax rate reduction continues at your new location.
Qualifying businesses include those that are:
- primarily (eg., greater than 50%) engaged in manufacturing, mining or processing
- carrying out these activities in Manitoba
- selling more than 50% of their products to other businesses rather than to the general public
The province uses the same definition of manufacturing as the Income Tax Act (Canada).
Excluded business activities include:
- Research and development
- Businesses that perform mainly repair work
- Operations in Manitoba with retail revenue in excess of 50% of total Manitoba revenue
- Publicly funded institutions
The application process
The first step is to check your company’s hydro bill. If it shows the Revenue Tax (PST) is 1.6%, the business is already participating in the program and no further steps are required.
Non-participating firms that meet eligibility requirements can complete the Application for Tax Rate Reduction on Electricity and email it to [email protected] or send it by fax to 204-948-2087 (in Winnipeg) or 204-726-6763 (in Brandon).
Applications must include these details from your company’s most recent fiscal year:
|% of MMA||% of manufacturing and mining activities in Manitoba|
|MMC||Cost of manufacturing and mining capital of the business in Manitoba|
|MML||Cost of manufacturing and mining labour of the business in Manitoba|
|MC||Total cost of capital of the business in Manitoba|
|ML||Total cost of labour of the business in Manitoba|
Information provided in the application is subject to audit by Manitoba Finance.
Each business entity (corporation, partnership or proprietor) must apply separately to Manitoba Finance for the tax rate reduction.
Applicants do not need to contact Manitoba Hydro. Manitoba Finance will respond to the company in writing. For approved companies, Manitoba Finance will notify Manitoba Hydro of the tax rate reduction for future billings.