Canada | Manitoba Budget 2026

• On 24 March 2026, Manitoba's budget was tabled with no changes to corporate or personal income tax rates; the small-business limit remains CA$500,000, and personal income tax brackets are unchanged for 2026.
• Effective 1 July 2026, retail sales tax (RST) exemptions will be extended to additional grocery items, including ready-to-eat foods and carbonated beverages.
• From 1 January 2028, electronic filing, payment and remittance of RST will become mandatory for all businesses registered to collect RST, requiring affected entities to prepare for digital compliance.

¹ The rates represent calendar-year-end rates unless otherwise indicated.

² The federal corporate income tax rates for manufacturers of qualifying zero-emission technology are reduced to 7.5% for eligible income otherwise subject to the 15% federal general corporate income tax rate or 4.5% for eligible income otherwise subject to the 9% federal small-business corporate income tax rate. These reductions are not reflected in the combined federal and Manitoba rates above.

³ Ibid.

⁴ An additional federal tax applies to banks and life insurers at a rate of 1.5% on taxable income (subject to a CA$100m exemption to be shared by group members).

Personal tax

Personal income tax rates

The budget does not include any changes to personal income tax rates or tax bracket thresholds.

The 2026 Manitoba personal income tax rates are summarized in Table B.

Table B — 2026 Manitoba personal income tax rates

For taxable income in excess of CA$200,000, the 2026 combined federal-Manitoba personal income tax rates are outlined in Table C.

Table C — Combined 2026 federal and Manitoba personal income tax rates

ⁱ The rate on capital gains is one-half the ordinary income tax rate.

ⁱⁱ The federal basic personal amount comprises two elements: the base amount (CA$14,829 for 2026) and an additional amount (CA$1,623 for 2026). The additional amount is reduced for individuals with net income exceeding CA$181,440 and is fully eliminated for individuals with net income exceeding CA$258,482. Consequently, the additional amount is clawed back on net income exceeding CA$181,440 until the additional tax credit of CA$227 is eliminated; this results in additional federal income tax (e.g., 0.29% on ordinary income) on net income between CA$181,441 and CA$258,482.

ⁱⁱⁱ The full Manitoba basic personal amount is available for individuals with net income below CA$200,000. The basic personal amount is gradually reduced for individuals with net income exceeding CA$200,000 and is fully eliminated for individuals with net income of CA$400,000 or more. Consequently, the amount is clawed back on net income exceeding CA$200,000 until the tax credit of CA$1,704 is eliminated; this results in additional provincial income tax (e.g., 0.85% on ordinary income) on net income between CA$200,001 and CA$400,000.

^iv Ibid.

Personal tax credits

This budget proposes changes to the renters affordability tax credit. For the 2027 tax year, the tax credit will be increased to a maximum amount of CA$675. The seniors' top-up amount will also increase to a maximum amount of CA$385.71. The Manitoba government intends to make further increases in future years until the tax credit reaches CA$700 and the seniors' top-up reaches CA$400.

Other tax measures

Retail sales tax measures

The budget proposes the following retail sales tax (RST) measures:

• Removal of RST on additional food items sold at grocery stores — Beginning on 1 July 2026, the RST exemption on basic groceries will be extended to apply to additional food and beverages for human consumption sold by grocery stores, such as ready-to-eat prepared foods and carbonated beverages.
• Removal of RST on prenatal vitamins — Beginning on 1 July 2026, prenatal vitamins will no longer be subject to RST.
• Electronic filing, payment and remittance — Beginning on 1 January 2028, Manitoba will introduce mandatory electronic filing, payment and remittance of RST for all businesses registered to collect RST.

School tax-related credits

The homeowners affordability tax credit is increased to a maximum amount of CA$1,700 (from $CA1,600) for the 2027 property tax year. Beginning in 2027, the tax credit will be reduced proportionately for homeowners whose principal residence is assessed at a value of more than CA$1m, with the tax credit being eliminated for homeowners whose principal residence is valued at CA$1.5m or more.

Land transfer tax

The government announced it will amend the Tax Administration and Miscellaneous Taxes Act, effective 1 January 2027, to address land transfer tax avoidance using legal structures that separate legal and beneficial ownership of property.

Administrative tax measures

The budget announced several administrative measures, including the following:

• Film and video production tax credit — Several amendments are proposed to the administration of the tax credit, including introducing a mandatory precertification process and allowing eligible nonresident labor costs to be included on advanced certificates.
• Retail sales tax — The budget proposes to refuse RST refunds on the purchase and sale of a vehicle if a taxpayer is found to have falsified a copy of their bill of sale to enable a purchaser to reduce the RST when registering a vehicle.

For up-to-date information on the federal, provincial and territorial budgets, visit ey.com/ca/Budget.

Ernst & Young LLP (Canada), Winnipeg

• Jason Burbank 
• Nina Pekach 
• Mark Jing 
• Ludee Sagarino 
• Harsimran Jandu 

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor