2nd Session, 43rd Legislature

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Bill 51

THE BUDGET IMPLEMENTATION
AND TAX STATUTES AMENDMENT ACT, 2025 (2)

(Assented to                                         )

HIS MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

PART 1

THE INCOME TAX ACT

C.C.S.M. c. I10 amended

1   The Income Tax Act is amended by this Part.

2(1)   Clauses 7.2(1.1)(b) and (c) are replaced with the following:

(b) the amount, if any, by which

(i) the investment tax credit for the year determined in respect of qualified property, other than RST-exempt property, acquired by the corporation in the year,

exceeds

(ii) the amount renounced under subsection (7) in respect of the year;

(c) subject to subsection (1.2), 7/8 of the amount determined under subclause (b)(i).

2(2)   Subsection 7.2(1.2) is amended, in the part before clause (a), by striking out "clause (1.1)(b)" and substituting "clause 1.1(c)".

2(3)   Subsection 7.2(2) is amended

(a) by replacing the definition "investment tax credit" with the following:

"investment tax credit" of a corporation at the end of a taxation year means the amount, if any, by which the total of

(a) all amounts, each of which is the ITC percentage of the corporation's capital cost of a qualified property acquired by it

(i) in the year, or

(ii) in any of the 10 immediately preceding taxation years or the 3 immediately following taxation years,

determined with reference to paragraphs 127(11.1)(b) and (d) of the federal Act, but without treating the following as government assistance or non-government assistance under those provisions:

(iii) the investment tax credit under this section,

(iv) a green energy equipment tax credit of the corporation under section 10.3,

(v) assistance from Manitoba Hydro,

(vi) assistance under the Investments in Forest Industry Transformation program of the Government of Canada, and

(b) all amounts each of which is an amount required by subsection (3) or (4) to be added in computing its investment tax credit at the end of any of the taxation years referred to in clause (a),

exceeds the total of

(c) all amounts each of which is an amount previously deducted under subsection (1) or previously credited under subsection (1.1), in respect of an amount included under clause (a) or (b) in determining the corporation's investment tax credit at the end of the taxation year, and

(d) all amounts each of which is an amount renounced under subsection (7), in respect of an amount included under clause (a) or (b) in determining the corporation's investment tax credit at the end of the taxation year; (« crédit d'impôt à l'investissement »)

(b) by adding the following definitions:

"ITC percentage" means 1% in relation to the capital cost of an RST-exempt property and 8% in relation to the capital cost of any other qualified property; (« pourcentage du crédit d'impôt à l'investissement »)

"RST-exempt property" means qualified property of a corporation in respect of which no tax was payable by the corporation under The Retail Sales Tax Act because of

(a) subsection 3(22.2) of that Act (exemption for tangible personal property used in manufacturing and processing), or

(b) any provision of that Act or its regulations that, at the time the corporation purchased the property within the meaning of that Act, was prescribed by regulation under this Act. (« bien exempté de la taxe sur les ventes au détail »)

2(4)   Subsection 7.2(2.6) is amended by replacing everything before clause (a) with the following:

Transitional

7.2(2.6)   The reference to "8%" in the definition "ITC percentage" in subsection (2) is to be read as

2(5)   Subsections 7.2(3) and (4) are amended by striking out "clause (a) or (c)" and substituting "clause (a) or (b)".

2(6)   The following is added after subsection 7.2(8.1) and before the centred heading that follows it:

Regulation for determining RST-exempt property

7.2(9)   For the purpose of the definition "RST-exempt property" in subsection (2), the Lieutenant Governor in Council may, by regulation, prescribe one or more provisions of The Retail Sales Tax Act or of the regulations under that Act.

PART 2

THE RETAIL SALES TAX ACT

C.C.S.M. c. R130 amended

3   The Retail Sales Tax Act is amended by this Part.

4   Subsection 1(1) is amended by adding the following definition:

"depreciable property" means depreciable property as defined in subsection 13(21) of the Income Tax Act (Canada); (« bien amortissable »)

5(1)   Subclause 3(1)(w.1)(v) is amended by replacing everything before paragraph (A) with the following:

(v) items, other than depreciable property, that

5(2)   The following is added after subsection 3(22.1):

Exemption: sale of tangible personal property used in manufacturing and processing

3(22.2)   Despite section 2, no tax is payable on the purchase of tangible personal property that

(a) is prescribed by regulation as tax-exempt manufacturing or processing property, or if no property is prescribed by regulation, tangible personal property that is "qualified property" for the purpose of section 7.2 of The Income Tax Act;

(b) if the property was brought into the province by the purchaser, was not used outside of the province by the purchaser for manufacturing or processing goods for sale or lease;

(c) immediately after the purchase, is depreciable property owned by the purchaser; and

(d) is not exempt from tax because of any other provision in this Act or the regulations.

6   Subsection 29(1) is amended by adding the following after clause (i.1):

(i.2) prescribing tangible personal property as tax-exempt manufacturing or processing property for the purpose of subsection 3(22.2);

PART 3

COMING INTO FORCE

Coming into force

7   This Act comes into force on July 1, 2026.