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The Budget Implementation and Tax Statutes Amendment Act, 2019

This is an unofficial version.
If you need an official copy, use the bilingual (PDF) version.

S.M. 2019, c. 13

Bill 16, 4th Session, 41st Legislature

The Budget Implementation and Tax Statutes Amendment Act, 2019

Explanatory Note

This note is a reader's aid and is not part of the law.

This Act amends various tax Acts to implement some of the tax measures announced in the 2019 Manitoba Budget. The measures implemented in this Act include the following.

Fuel Tax (Part 1)

  • effective June 1, 2019, extending the forestry exemption to fuel used by mill site equipment for log handling and processing [s. 1]

Income Tax (Part 2)

  • consistent with changes to the federal Income Tax Act, ensuring that split income does not reduce net income for the purpose of the following non-refundable income tax credits:

spouse or common-law partner amount

eligible dependant amount

infirm dependant amount

caregiver amount [s. 3(1) to (5)]

  • consistent with changes to the federal Income Tax Act, including certain veteran benefits as income eligible for the pension income tax credit [s. 3(6)]
  • commensurate with the reduction in the sales tax rate, reducing the refundable portion of the manufacturing investment tax credit from 8% to 7% effective for property acquired on or after July 1, 2019, but leaving the non-refundable portion at 1% [s. 4]
  • making the film and video production tax credit permanent [s. 5 and 6]
  • updating the paid work experience tax credit provisions for consistency and to ensure that the specified tax credit limit for a period of employment applies as intended where the employer is a partnership [s. 7]
  • extending the book publishing tax credit by five years to 2025 [s. 8]
  • extending the cultural industries printing tax credit by one year to 2021 and limiting the credit to $1.1 million per taxpayer [s. 9]
  • extending the small business venture capital tax credit by three years to 2023 [s. 10]

Retail Sales Tax (Part 3)

  • reducing the sales tax rate from 8% to 7% effective July 1, 2019 [s. 11(a)]
  • ensuring that the retail sales tax does not apply to the federal carbon tax [s. 11(b)]

In addition, Part 4 of the Act amends provisions of The Election Financing Act that govern the reimbursement of election expenses for candidates and political parties. A candidate or political party will be eligible for reimbursement of election expenses if they get 5% of the vote, instead of the previous 10%. The maximum amount of reimbursement payable is reduced from 50% to 25% of election expenses. [s. 12 to 16]

(Assented to June 3, 2019)

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

PART 1

THE FUEL TAX ACT

C.C.S.M. c. F192 amended

1           Subsection 9(1) of The Fuel Tax Act is amended by adding the following after clause (h) and before the heading "Hospital":

(h.1) for use only in operating an engine, other than a motor vehicle engine, in the course of handling or processing forest products at a mill site;

PART 2

THE INCOME TAX ACT

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

2           The Income Tax Act is amended by this Part.

3(1)        Subsection 4.6(4) is amended, in the part after the formula, by adding "and no amount were deducted under paragraph 20(1)(ww) of the federal Act" at the end.

3(2)        Subsection 4.6(5) is amended by replacing the part after clause (i) with the following:

In these formulas, A is the amount that would be the spouse's or partner's income for the year if no amount were deducted under paragraph 20(1)(ww) of the federal Act, or if the individual and the spouse or partner are living separate and apart at the end of the year because of a breakdown of their marriage or partnership, the amount that would be the spouse's or partner's income for the year while married or in the common-law partnership and not so separated if no amount were deducted under that paragraph.

3(3)        Subsection 4.6(6) is amended, in the part after clause (i), by striking out "the dependant's income for the year" and substituting "the amount that would be the dependant's income for the year if no amount were deducted under paragraph 20(1)(ww) of the federal Act".

3(4) Subsection 4.6(7) is amended, in the description of A in the formula, by striking out "the dependant's income for the year" and substituting "the amount that would be the dependant's income for the year if no amount were deducted under paragraph 20(1)(ww) of the federal Act".

3(5)        Subsection 4.6(8) is amended, in the description of A in the formula, by striking out "the other person's income for the year" and substituting "the amount that would be the other person's income for the year if no amount were deducted under paragraph 20(1)(ww) of the federal Act".

3(6)        Subsection 4.6(10) is replaced with the following:

Pension income amount

4.6(10)     An individual who was resident in Manitoba on the last day of the taxation year may claim an amount equal to the lesser of

(a) $1,000; and

(b) the amount determined for that year for B in the formula in subsection 118(3) of the federal Act.

4(1)        Clause 7.2(1.1)(b) is amended by striking out "8/9" and substituting "7/8".

4(2)        Subsection 7.2(1.2) is amended

(a) in the part before clause (a), by striking out "8/9" and substituting "7/8"; and

(b) by striking out "and" at the end of clause (a), adding "and" at the end of clause (b) and adding the following after clause (b):

(c) "8/9" in respect of property acquired after April 11, 2017, and before July 1, 2019.

4(3)        Clauses (a) and (b) of the definition "investment tax credit" in subsection 7.2(2) are amended by striking out "9%" and substituting "8%".

4(4)        Subsection 7.2(2.6) is replaced with the following:

Transitional

7.2(2.6)    The references to "8%" in clauses (a) and (b) of the definition "investment tax credit" in subsection (2) are to be read as

(a) "10%" in respect of property acquired before April 12, 2017; and

(b) "9%" in respect of property acquired after April 11, 2017, and before July 1, 2019.

5           Subsection 7.5(2) is amended by adding "and" at the end of clause (c), striking out "and" at the end of clause (d) and repealing clause (e).

6           The description of A in the formula in subsection 7.6(6) is amended by repealing clause (f).

7(1)        Subsection 10.1(1) of the English version is amended

(a) in the definition "qualifying period of employment",

(i) by striking out "being" in subclauses (b)(iii) and (c)(iii), and

(ii) by striking out "to be" in subclause (d)(v); and

(b) in the definition "qualifying work placement" by striking out "to be" in clause (a) and subclause (b)(vii).

7(2)        Subsections 10.1(3.1) and (4) are replaced with the following:

Youth work experience hiring incentive

10.1(3.1)   A taxpayer's youth work experience hiring incentive for a taxation year is the total of all amounts each of which is the amount determined by the following formula in respect of a qualifying period of employment of a qualifying youth:

W × A/B

In this formula,

W

is the lesser of

(a) $5,000 less the total of all amounts each of which is the incentive determined under this subsection for any taxpayer in respect of a previous period of employment of that youth, and

(b) 25% of the amount by which

(i) the total salary and wages paid to the youth for the qualifying period of employment,

exceeds

(ii) the amount of any other government assistance received or receivable in respect of the salary and wages referred to in subclause (i);

A

is the total salary and wages paid by the taxpayer to the qualifying youth for the qualifying period of employment or, if they were paid by a partnership in which the taxpayer is a general partner, the taxpayer's pro rata share of the salary and wages so paid by the partnership;

B

is the total salary and wages paid to the qualifying youth for the qualifying period of employment.

Co-op student hiring incentive

10.1(4)     A taxpayer's co-op student hiring incentive for a taxation year is the total of all amounts each of which is the amount determined by the following formula in respect of the employment of a co-op student under a qualifying work placement:

W × A/B

In this formula,

W

is the lesser of

(a) $5,000 less the total of all amounts each of which is the incentive determined under this subsection

(i) for that taxpayer in respect of salary and wages paid to that student in a previous taxation year, or

(ii) for any taxpayer for a previous work placement of that student, and

(b) 15% of the amount by which

(i) the total salary and wages paid to the student under the qualifying work placement for that year for work performed primarily in Manitoba,

exceeds

(ii) the amount of any other government assistance received or receivable in respect of the salary and wages referred to in subclause (i);

A

is the total salary and wages paid by the taxpayer to the student under that work placement for that year or, if they were paid by a partnership in which the taxpayer is a general partner, the taxpayer's pro rata share of the salary and wages so paid by the partnership;

B

is the total salary and wages paid to the student under the qualifying work placement for that year.

7(3)        Subsection 10.1(5) is amended

(a) in subclause (b)(ii) of the description of W in the formula, by striking out "by the taxpayer"; and

(b) in the description of B in the formula, by adding "to the qualifying graduate" after "paid".

7(4)        Subsection 10.1(6) is replaced with the following:

Apprentice hiring incentive

10.1(6)     A taxpayer's apprentice hiring incentive for a taxation year is the total of all amounts each of which is the amount determined by the following formula in respect of a qualifying period of employment of a qualifying apprentice in that year:

W × A/B

In this formula,

W

is the lesser of

(a) that proportion of $5,000 that the number of days in the qualifying period of employment is of 365, and

(b) 15% of the amount by which

(i) the total salary and wages paid to the apprentice for that period,

exceeds

(ii) the amount of any other government assistance received or receivable in respect of the salary and wages paid to the apprentice for that period;

A

is the total salary and wages paid by the taxpayer to the apprentice for that period or, if they were paid by a partnership in which the taxpayer is a general partner, the taxpayer's pro rata share of the salary and wages so paid by the partnership;

B

is the total salary and wages paid to the apprentice for the qualifying period of employment.

7(5)        Subsection 10.1(6.1) is amended by striking out "in the description of W in the formula in clause (6)(b)" and substituting "in clause (b) of the description of W in the formula in subsection (6)".

7(6)        Subsection 10.1(6.2) is amended by striking out "in the description of W in the formula in clause (6)(b)" and substituting "in clause (b) of the description of W in the formula in subsection (6)".

7(7)        Subsection 10.1(8) is amended, in subclause (b)(ii) of the description of W in the formula, by striking out "by the taxpayer".

8           Subsection 10.4(3) is amended

(a) by striking out "2020" and substituting "2025" in

(i) clauses (a) and (b) of the definition "book publishing labour costs", and

(ii) clause (b) of the definition "eligible book"; and

(b) in clause (b) of the definition "eligible printing costs", by striking out "2021" and substituting "2026".

9(1)        Subsection 10.4.1(1) is amended

(a) in the part before the formula,

(i) by striking out "subsection (2)" and substituting "subsections (1.1), (1.2) and (2)", and

(ii) by adding "the lesser of $1,100,000 and" after "but not exceeding"; and

(b) in the descriptions of L and R2 in the formula, by striking out "2020" and substituting "2021".

9(2)        The following is added after subsection 10.4.1(1):

Transitional

10.4.1(1.1)  For a taxation year ending before March 7, 2019, subsection (1) is to be read without reference to "the lesser of $1,100,000 and".

Maximum applies to related or associated group

10.4.1(1.2)  If two or more eligible printers are related to or associated with each other in a taxation year that ends on or after March 7, 2019, the total of the amounts each of which is the amount claimed by any of them under subsection (1) for that year must not exceed $1,100,000. If it does, subsection (1) does not apply to any of them for that year.

9(3)        Clause (b) of the definition "eligible printing revenue" in subsection 10.4.1(3) is amended by striking out "2020" wherever it occurs and substituting "2021".

10          Subclauses 11.13(3)(b)(i) and (ii) are amended by striking out "2020" and substituting "2023".

PART 3

THE RETAIL SALES TAX ACT

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

11          Subsection 1(1) of The Retail Sales Tax Act is amended

(a) in the definition "infrastructure funding period",

(i) by striking out "10-year", and

(ii) by striking out "June 30, 2023" and substituting "June 30, 2019"; and

(b) in the definition ""purchase price" or "sale price"",

(i) in the part of clause (c) before subclause (i), by adding "charge," after "tax,", and

(ii) by adding the following after subclause (c)(ii):

(ii.1) a charge under Part 1 of the Greenhouse Gas Pollution Pricing Act (Canada),

PART 4

THE ELECTION FINANCING ACT

C.C.S.M. c. E27 amended

12          The Election Financing Act is amended by this Part.

13          The first paragraph of the overview to Part 10 is amended by striking out "10%" wherever it occurs and substituting "5%".

14(1)       Subsection 73(1) is amended by striking out "10%" wherever it occurs and substituting "5%".

14(2)       Subsection 73(2) is amended in the description of E in the formula by striking out "50%" wherever it occurs and substituting "25%".

15(1)       Subsection 74(1) is amended by striking out "10%" and substituting "5%".

15(2)       Subsection 74(2) is amended in the formula by striking out "50%" and substituting "25%".

Transitional

16          For the purpose of any by-election held between the day this section comes into force and the first general election held after that day, The Election Financing Act is to be read without reference to the amendments made by this Part.

PART 5

COMING INTO FORCE

Coming into force

17(1)       Except as otherwise provided in this section, this Act comes into force on the day it receives royal assent.

Part 1: Fuel Tax

17(2)       Section 1 comes into force on June 1, 2019, and, if this Act does not receive royal assent on or before that day, section 1 is deemed to have come into force that day.

Part 2: Income Tax

17(3)       Subsections 3(1) to (5) are deemed to have come into force on January 1, 2018.

17(4)       Subsection 3(6) is deemed to have come into force on January 1, 2015.

17(5)       Section 4 is deemed to have come into force on July 1, 2019, if this Act receives royal assent after that day.

17(6)       Subsection 7(2) is deemed to have come into force on September 1, 2015.

17(7)       Subsections 7(4) and (5) are deemed to have come into force on January 1, 2015.

17(8)       Subsection 7(6) is deemed to have come into force on January 1, 2016.

17(9)       Section 9 is deemed to have come into force on March 7, 2019.

Part 3: Retail Sales Tax

17(10)      Clause 11(a) is deemed to have come into force on July 1, 2019, if this Act receives royal assent after that day.

17(11)      Clause 11(b) is deemed to have come into force on April 1, 2019.

Part 4: Election Financing

17(12)      Despite section 117 of The Election Financing Act, Part 4 comes into force on the day this Act receives royal assent.