It included both a baseline budget and a tariff budget to address the evolving landscape of US tariffs. The baseline budget includes a revenue contingency of $200 million and a provision for loans and guarantees of $380 million directly related to tariffs. The tariff budget includes a tariff response contingency of $500 million, a revenue contingency of $800 million, and a provision for loans and guarantees of $505 million.
MB Budget 2025 suspends inflationary adjustments to personal tax brackets, introduces new personal tax credits, and enhances existing business tax credits, among other measures.
The estimated deficit for the 2024-25 fiscal year is $1.239 billion, compared to the $796 million deficit projected in the previous budget.
Fiscal projections for the next three years are as follows:
| Year | Baseline projected surplus/(deficit) | Tariff projected (deficit) |
|---|---|---|
|
2025-26 |
($794 million) including a $580 million contingency for tariffs
|
($1.894 billion) including a $1.68 billion contingency for tariffs |
|
2026-27 |
($327 million)
|
N/A |
|
2027-28 |
$10 million
|
N/A |
The Homeowner’s Affordability Tax Credit has increased to $1,600 (from $1,500) for 2026.
There are no proposed changes to the corporate tax rates or the $500,000 small business limit.
2025 combined federal and provincial corporate tax rates:
| Small business tax rate | General corporate tax rate |
|---|---|
|
9% |
27.00% |
The Health and Post Secondary Education Tax Levy limits have increased to provide a full exemption for annual remuneration of $2.5 million (from $2.25 million) and a reduced rate for annual remuneration of up to $5 million (from $4.5 million). These increased exemption limits are effective January 1, 2026.
The Young Farmer Rebate program is increased to allow a rebate of 2% on the first $400,000 (from $300,000) of eligible loan principal. The lifetime limit for the rebate is increased to $40,000 (from $30,000).
The Cultural Industries Printing Tax credit is now permanent. This 35% refundable tax credit on remuneration paid to Manitoba employees was previously scheduled to expire December 31, 2025.
Administrative changes will be made to the Income Tax Act such that trusts are excluded from the Family Tax Benefit. Currently, trusts are entitled to a credit of $2,065 reduced by 9% of the trust’s income. The budget didn’t contain an effective date for this measure.
The 0.5% refundable Mining Tax is eliminated. The budget didn’t contain an effective date for this measure.
Indexation of the basic personal amount (BPA) and the tax bracket thresholds were frozen to 2024 levels. For 2025, the BPA will remain $15,780.
The personal tax brackets and the respective marginal tax rates for 2025 are as follows:
| Tax brackets | 2025 tax brackets Marginal tax rate |
|---|---|
|
$47,000 or less
|
25.80% |
|
$47,001 to $57,375
|
27.75% |
|
$57,376 to $100,000
|
33.25% |
|
$100,001 to $114,750
|
37.90% |
|
$114,751 to $177,882
|
43.40% |
|
$177,883 to $253,414
|
46.40% |
|
$253,415 and over
|
50.40% |
The tax brackets will return to annual indexing in 2025.
The top combined federal and provincial marginal tax rates for 2025 are as follows:
| Type of income | Taxable income 2025 |
|---|---|
|
Salary/interest income |
50.40% |
|
Capital gains |
25.20% |
|
Eligible dividends |
37.81% |
|
Non-eligible dividends |
46.67% |
The maximum tax credit amount for residential renters will increase to $625 (from $575) for the 2026 tax year. This credit provides tax savings to individuals who rent their principal residence, individuals renting a social housing property, and individuals claiming non-employment and income assistance rent benefits. Seniors with a family net income of less than $40,000 are eligible for an additional top-up amount of $357 (from $328).
The Volunteer Firefighter and Search and Rescue amount is increased to $6,000 (from $3,000), providing volunteer firefighters and search and rescue personnel with a maximum annual credit of $648 (from $324)
Retail sales tax (RST) will apply to cloud computing services—including subscriptions to software, data storage, web hosting, data retrieval, and data processing—effective January 1, 2026. Previously, if software was merely accessed on a device situated in Manitoba, it wasn’t subject to RST. Businesses resident and non-resident in Manitoba will be required to register to collect RST on these services.
Legislative changes are being considered to ensure the Land Transfer Tax is payable on the transfer of beneficial ownership of real property. Currently the tax is only charged if legal title is transferred.
Existing Tobacco Band Assessment agreements with First Nations are being updated to increase the duration to 10 years (from five years) and to reduce the administration fee to 0.25% (from 1.0%).
A registry to verify a business’ RST number will be developed and implemented by the end of 2025. A similar registry is being developed to verify tobacco registration numbers.
The provincial fuel tax for gasoline, diesel, and marked gasoline is reduced by 10% effective January 1, 2025.
The $10-a-day childcare program is extended to cover non-school days.
Have questions? Let’s talk. Contact your local advisor or reach out to us here.
Visit our Budget 2025 hub to learn more about all federal and provincial budgets.
Disclaimer
The information contained herein is general in nature and is based on proposals that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice or an opinion provided by Doane Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, specific circumstances or needs and may require consideration of other factors not described herein.
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