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New Manitoba budget bill receives first reading

New Manitoba budget bill receives first reading

Manitoba reintroduces corporate income tax measures

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Manitoba Bill 2 received first reading on October 9, 2020. This bill includes most of the tax measures from the province's 2020 budget and contains corporate income tax measures originally included in Manitoba's previous Bill 34. Manitoba's Bill 34 died on the order paper when the provincial legislature was prorogued on October 6, 2020.

Corporate income tax measures originally included in Bill 34, and reintroduced in Bill 2, continue to be considered substantively enacted on March 19, 2020, the date that Bill 34 received first reading. These measures will be considered enacted for U.S. GAAP purposes on the date Bill 2 receives Royal Assent.

Corporate income tax measures

Manitoba Bill 2 includes corporate tax measures announced in the province's 2020 budget and originally included in Bill 34. The bill makes changes to several existing tax credits, including measures to:

  • Make the Manufacturing Investment Tax Credit permanent
  • Enhance the Child Care Centre Development Tax Credit
  • Enhance the Film and Video Production Tax Credit
  • Extend the Mineral Exploration Tax Credit to December 31, 2023
  • Extend the Cultural Industries Printing Tax Credit to December 31, 2021
  • Extend the Community Enterprise Development Tax Credit to December 31, 2021

Other measures

Manitoba Bill 2 also increases the thresholds for the province's Health and Post-Secondary Education Tax Levy (payroll tax) and eliminates probate fees as announced in the 2020 budget. The bill also includes measures to harmonize the province with certain federal deadline and time-limit extensions. For more information on the federal measures see TaxNewsFlash-Canada 2020-71, "COVID-19 — Canada Stretches Tax Assessment Periods".

Measures not included in Bill 2

Manitoba Bill 2 does not include the reduction of the provincial sales tax rate to 6% (from 7%), the reduction in the refundable portion of the Manufacturing Investment Tax Credit to 6% (from 7%) or the introduction of the green levy, as proposed in the 2020 budget, and originally included in Manitoba's previous Bill 35 which died on the order paper on October 6, 2020. The government previously indicated that these changes were delayed until further notice in light of COVID-19.

For more information, contact your KPMG advisor.

Information is current to October 20, 2020. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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