On April 2nd, Finance Minister Adrien Sala delivered his first provincial budget. Below are the highlights for credit unions:

Fiscal Outlook

The Budget projected a deficit of $796 million for 2024-2025 and an increase of six per cent in spending largely allocated to health care investments, and a combination of tax cuts and tax credits.

Provincial revenues are projected to increase with an additional $992 million in federal transfers, plus $24 million in new income tax revenue and $32 million in corporate tax revenue. Expenses are increasing by approximately $1.4 billion. The Finance Minister also presented a plan to bring the Budget back to balance within four years. 

Manitoba’s real gross domestic product (GDP) is expected to decelerate from 1.4 per cent growth in 2023 to 0.6 per cent in 2024. Manitoba’s economy is then expected to expand in 2025, growing by 1.9 per cent. Detailed estimates for Budget 2024-2025 can be found here.

Taxation

Some of the major tax measures are listed below but more details can be found starting on page 121 of the Budget Document.

• The 14 cent a litre fuel tax holiday is extended to the end of September 2024;
• The PST will be removed from new home construction.
• Income tax bracket thresholds increased to $47,000 and $100,000 in 2024, and will return to annual indexing in 2025. The Basic Personal Amount increased to $15,780 as a result of indexing in 2024, and is projected to further increase to $16,206 in 2025.
• For the 2025 tax year, the School Tax Rebate and Education Property Tax Credit will be replaced with a new Homeowners Affordability Tax Credit of up to $1,500 on principal residences. 
• With the 2024 property tax year already underway, Manitoba will maintain the existing School Tax Rebate at the current levels in 2024. However, these rebates will be provided directly on the property tax notice instead of mailing out cheques as in previous years. 
• Beginning with the 2025 tax year, Manitoba will phase out the Basic Personal Amount over a net income range of $200,000 to $400,000.
• For the tax year 2025, an increased Renters Tax Credit of up to $575 will be provided, and the seniors top-up will be increased to a maximum $328. Both amounts will be increased each year of the current mandate.
• The Manitoba Government is introducing a $300 security system rebate for families and small businesses.

Affordable Housing

• The province has allocated $116 million for construction and maintenance of 250 affordable housing units in 2024-2025.
• A new Rental Housing Construction Tax Credit will be introduced effective for the 2024 tax year. The tax credit will provide $8,500 for the construction of new market-rate rental units and $13,500 for units classified and maintained as affordable units for a period of least 10 years. Construction must commence on or after January 1, 2024, to be eligible for the tax credit.
• The Rental Housing Construction Tax Credit will be fully refundable to non-profit organizations. For other businesses, $8,500 will be fully refundable on all units, with an additional $5,000 non-refundable credit available over 10 years for affordable units.
• Homeowners Affordability Tax Credit and Renters Tax Credit for Mobile Homeowners Mobile homeowners’ eligibility for these two credits is clarified to stipulate that 50 per cent of mobile homeowners’ license fees and 10 per cent of land rental payments are eligible for the Education Property Tax Credit in 2024, and that mobile homeowners are ineligible for the Renters Tax Credit.

Economic Development

• The Budget provides a $1.1 million increase for a cost-sharing agreement with Indigenous Services Canada to reinstate the north/south winter road connecting the communities of St. Theresa Point First Nation with Berens River First Nation.
• The Budget creates a $4-million Indigenous Economic Development Fund (IEDF) to support Indigenous business owners, entrepreneurs and organizations.
• The province is investing $518,00 in new supports for Ukrainian refugees.

Agriculture

• Increasing Manitoba Agriculture Services Corporations (MASC), loan amount eligible for the Young Farmer Rebate to $300,000 from $200,000 and introducing a new lending fee credit for farmers under the age of 40.
• The province will introduce a rent freeze for Crown lands.
• Re-opening two MASC offices in rural areas.
• As previously announced, the government is allocating $146.9 million in cost shared investments with the federal government’s Business Risk Management programs including AgriInsurance, Wildlife Damage Compensation, AgriStability and AgriInvest.

Sustainability

• The province will introduce a $4,000 rebate for electric vehicle purchases, and the rebate is retroactive to August of 2023.
• Providing a $730,000 increase to support the Urban and Hometown Green Teams, which provides funding to non-profit organizations, education authorities, Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC) councils and municipal governments that create summer jobs for youth ages 15 to 29.
• $10 million in funding through the Low Carbon Economy Fund to reduce greenhouse gas emissions.
• $6.4 million to protect the environment through a collection of climate and sustainability initiatives.

For more information on any of these items, please contact CCUA’s Manitoba Manager of Government Relations, Sukhi Jandu.