Summary#
This bill makes many tax and policy changes tied to Manitoba’s 2026 budget. It adjusts personal property-related tax credits, changes retail sales tax on food, creates a new tax on certain land deals, updates tobacco tax, and gives new powers to build schools and child care spaces. It also lets municipalities tax short‑term accommodations and updates rules for film tax credits, carbon storage, and several education laws.
Key changes include:
- Personal property credits: raises the homeowners affordability tax credit and the school tax reduction to $1,700, and phases them out for homes assessed over $1,000,000; adds a school tax reduction for eligible mobile homes.
- Retail sales tax (PST): exempts basic groceries and most store‑bought food and non‑alcoholic beverages; adds a PST exemption for prenatal vitamins.
- Land deals: starts a tax on transfers of a “beneficial interest” in land (when ownership changes without a land title registration), with reporting and anti‑avoidance rules.
- Film and video: modernizes eligibility, adds animation rules, creates early notice/certification steps, and allows choosing between two credit types (but not both).
- Municipalities: allows cities and towns, including Winnipeg, to levy a short‑term accommodation tax (e.g., on hotel or short‑term rental stays) by by‑law after a public hearing.
- Schools and child care: lets the minister build schools and child care facilities (with child care space required in new schools) and transfer them to school boards, which then assume the related costs as a debt.
Timing:
- Most income tax credit increases/phasing: Jan 1, 2025 or Jan 1, 2027 (as noted below).
- PST food changes: July 1, 2026 (or Dec 1, 2026 if royal assent is after July 1).
- Beneficial interest land tax and film credit updates: Jan 1, 2027 (film changes apply to productions whose principal photography starts on/after that date).
- Some child care funding authority changes: Jan 1, 2026.
- Other items take effect on royal assent.
What it means for you#
- Homeowners
- The homeowners affordability tax credit rises from $1,600 to $1,700 (applies from Jan 1, 2025).
- The school tax reduction on your principal residence rises to $1,700 (from Jan 1, 2027).
- Both amounts are reduced if your principal residence is assessed over $1,000,000, and fully phased out by $1,500,000 (from Jan 1, 2027).
- Some dependent‑related claims now require the dependant to live with you.
- Owners of mobile homes (as a principal residence)
- A new school tax reduction of up to $1,700 applies if specific conditions are met (for example, you own the mobile home but not the land and have a separate property tax statement). If the conditions are later not met, part of the reduction must be repaid (effective Jan 1, 2027).
- Renters claiming property-related credits
- Certain renter credit amounts and rates increase starting Jan 1, 2027.
- Some claims that include dependants now require the dependant to live with you (effective Jan 1, 2025).
- Shoppers
- No PST on basic groceries (as defined under the federal GST zero‑rated list) starting July 1, 2026 (or Dec 1, 2026).
- No PST on most food and non‑alcoholic beverages bought for home consumption from stores. PST still applies to food and drinks bought in restaurants, licensed premises, cinemas, sports/entertainment venues, sports/recreational facilities, items from vending machines, food ordered for delivery from those venues, and catering. Alcoholic beverages remain taxable.
- Prenatal vitamins and multivitamins for human use are PST‑exempt.
- Film and video producers
- You may choose either a cost‑of‑salaries credit or a cost‑of‑production credit for a project, but not both (now or in later years).
- “Principal photography” includes key animation for animated productions.
- Eligibility rules and exclusions are updated, and productions must meet recognized professional standards.
- You must either apply for a certificate of registration or give notice within 30 days after principal photography starts; late notice limits which costs can earn credits.
- The certifying authority can refuse or revoke certificates for misstatements, prior material misrepresentation, or non‑payment of workers/suppliers without lawful excuse (applies to productions starting Jan 1, 2027 or later).
- Property buyers/sellers using non‑registered transfers (e.g., share/trust deals)
- A new tax applies when a person acquires or increases a “beneficial interest” in land without registering a land title transfer. It uses a graduated calculation based on the property’s fair market value, similar in structure to the existing land transfer tax.
- You generally must file a return and a fair market value affidavit, and pay within 30 days. There are exemptions (e.g., if you register a land title transfer and pay land transfer tax within 30 days, some leases of short duration, and specified family/reorganization transfers).
- Anti‑avoidance rules allow the director to combine multiple steps into one taxable transaction if used to reduce tax (from Jan 1, 2027).
- Vehicle or aircraft buyers/sellers
- Providing false or inaccurate information in a bill of sale or related document can now trigger compliance action under the PST law.
- Tobacco users
- Certain non‑cigarette tobacco products are taxed at 29 cents per gram, including non‑tobacco components in the product.
- Short‑term rental hosts, hotels, and booking platforms
- Municipalities may require you to collect and remit a short‑term accommodation tax on stays of 30 days or less. They can audit records and conduct inspections under by‑law rules, after a public hearing approves the by‑law.
- Municipalities (including Winnipeg)
- Can adopt a short‑term accommodation tax by‑law, set classes and rates, require collection/remittance, and audit compliance. Several past Winnipeg and Brandon accommodation tax by‑laws are validated.
- Carbon storage and oil/gas operators
- Annual rents may apply to exploration reservations and carbon storage licences; royalties may apply on injected captured carbon. Reports and payments are required; unpaid amounts accrue interest. Some well and disposal permit rules are tightened, including consent requirements from mineral owners.
- School boards and families
- The minister can build schools and child care facilities (and upgrades) on board‑owned or government‑acquired land, and must include child care space in new schools unless a separate facility is arranged on/adjacent to the site.
- The minister has exclusive use of the site during construction; boards can use the buildings for up to 24 months before transfer on terms the minister sets.
- On a day the minister sets, the board assumes ownership and the related costs become a debt owed to the government. Boards need ministerial approval to use a constructed child care space for another purpose.
- School divisions get clearer long‑term borrowing authority (including refinancing), and limits on issuing securities.
- Red River College Polytechnic and MITT communities
- Red River College Polytechnic may offer high school technology education programs and grant related high school diplomas; certain school law provisions can be applied by regulation.
- The government may appoint an administrator to run MITT if there are serious financial or operational problems, or in the public interest; the administrator replaces the board during the appointment.
Expenses#
No publicly available information.
Potential fiscal effects and costs/trade-offs:
- Lower PST revenue from exempting basic groceries and most store‑bought food and non‑alcoholic beverages.
- Higher personal tax expenditures from raising the homeowners affordability tax credit and school tax reduction (partly offset by the phase‑out for high‑value homes) and from renter‑related increases.
- New revenue from the beneficial interest land tax and from carbon storage rents/royalties; updated tobacco tax may also affect revenue.
- Municipal revenues could rise where councils adopt a short‑term accommodation tax.
- Administrative costs for:
- processing new/changed credits, mobile home eligibility checks, and potential recoveries,
- managing PST food exemptions and enforcement,
- administering the beneficial interest land tax (returns, valuations, assessments),
- film credit certification, notices, and reporting,
- building and transferring schools/child care spaces, and
- carbon storage rent/royalty reporting and collections.
Proponents' View#
- The bill appears intended to make property tax relief more generous while targeting it away from high‑value homes, and to extend relief fairly to mobile homeowners.
- Exempting basic groceries and most store‑bought food could lower household costs and align PST treatment more closely with federal GST rules, which may simplify compliance.
- The new beneficial interest land tax could close a gap where some property deals avoid land transfer tax by transferring beneficial ownership without registering title, improving fairness.
- Film credit updates modernize eligibility (including animation), set clearer standards, and add early notice/certification steps that could improve planning and accountability; refusal powers tied to misrepresentation or non‑payment may protect workers and public funds.
- Letting municipalities levy a short‑term accommodation tax gives local governments a tool to fund tourism or municipal services and apply it to short‑term rentals as well as hotels, subject to a public hearing.
- Centralizing school and child care construction with required child care space in new schools could speed delivery and better integrate services; later transferring assets to school boards maintains local control of operations.
Opponents' View#
- Exempting most food from PST may reduce provincial revenue; detailed carve‑outs (e.g., restaurants, venues, vending, catering, delivery from restaurants) could be confusing and increase compliance work for small businesses.
- Phasing out credits based on assessed value may penalize owners in high‑valuation areas who are income‑constrained; new “reside with” conditions and mobile home rules add complexity and risk of repayment.
- The beneficial interest land tax creates new filing, valuation, and payment duties within 30 days, which may be burdensome for private or complex transactions; joint liability and anti‑avoidance discretion may create uncertainty.
- Film producers face a strict 30‑day notice rule; late notice means earlier costs may not earn credits. New “recognized professional standards” and broader refusal grounds could be seen as subjective or risky for smaller productions.
- Carbon storage rents and royalties add project costs and reporting; new consent requirements for disposal wells may slow timelines.
- Municipal short‑term accommodation taxes could increase travel costs and add compliance and audit exposure for hosts and platforms.
- The minister’s control over school and child care construction and the requirement that boards assume the resulting debt may reduce local say on design, timing, or cost; limits on using child care space for other purposes could constrain boards.
- Allowing an administrator to replace MITT’s board concentrates control during interventions and may raise governance concerns.