Manitoba Provincial Budget Tax Updates 2026-2027

March 27, 2026
11:31 am

Overview

On March 24, 2026, Manitoba’s Finance Minister presented the province’s 2026 budget “Good Jobs. Lower Costs. Better Health Care.”. This comprehensive summary highlights some of the key changes that will influence the Quebec tax environment in the coming years.

Personal Income Tax Measures

There are no proposed changes to personal income tax rates for 2026. As announced in Budget 2025-2026, the indexation of the Basic Personal Amount (BPA) and tax bracket thresholds to inflation remains frozen. As a result, the BPA stays at $15,780 for the 2026 tax year and Manitoba’s personal income tax rates and bracket thresholds continue to apply at the same levels as last year.

The income tax rates for the 2026 taxation year, based on your taxable income, remain as follows:

Taxable income	Rate
$47,000 or less	10.80%
Over $47,000 up to $100,000	12.75%
Over $100,000	17.40%

The current personal combined income tax rates for top marginal tax rate in 2026 are outlined below:

Taxable income above $400,000	Rate
Interest/regular income	50.40%
Capital gains	25.20%
Eligible dividends	37.78%
Non‑eligible dividends	46.67%

Increase of the Renters Affordability Tax Credit

In the 2026 tax year, the maximum annual Renters Affordability Tax Credit will be $625, and the maximum seniors’ top-up will increase to $357.14.

For the 2027 tax year, the maximum Renters Affordability Tax Credit will rise to $675, and the seniors’ top-up will increase to a maximum of $385.71.

Corporate Income Tax Measures

There are no proposed changes to corporate income tax rates or the $500,000 small-business limit for 2025.

The corporate income tax rates for Manitoba in 2026 are as follows:

	Provincial tax rate	Federal and provincial combined tax rate^{^[1]}
Small-business tax rate^[2]	0.00 %	9.00 %
Manufacturing and processing tax rate	12.00 %	27.00 %
General corporate tax rate	12.00 %	27.00 %

Retails Sales Tax measures

Removing Retail Sales Tax (RST) on Additional Food Items Sold at Grocery Stores

Effective July 1, 2026, RST will be removed on additional food and beverages for human consumption sold by grocery stores, including:

ready-to-eat prepared food such as sandwiches, soups, rotisserie chickens and samosas
platters or arrangements of prepared foods such as sushi, cold cuts and cheeses
carbonated beverages and beverages containing one per cent or less alcohol per volume

RST will continue to apply on beverages with an alcohol content greater than one per cent, dietary supplements and taxable non-food items sold in grocery stores.

Removing RST on Prenatal Vitamins

Effective July 1, 2026, RST will be removed from prenatal vitamins. Other vitamins and minerals remain taxable.

Other Tax Measures

Increase of the Homeowners Affordability Tax Credit

For the 2026 property tax year, the maximum Homeowners Affordability Tax Credit will increase by $100, from $1,500 to $1,600.

For the 2027 property tax year, Manitoba will further increase the Homeowners Affordability Tax Credit by $100, bringing it to $1,700.

To ensure that this tax credit benefits those who need it most, starting in 2027, homeowners whose principal residence has an assessed value of more than $1 million will receive a reduced credit. The credit will be gradually reduced at a rate of $3.40 per $1,000 in assessed value above $1 million, until the assessed value reaches $1.5 million, at which point homeowners will no longer be eligible for the credit.

Land Transfer Tax

As announced in Budget 2025-2026, the government committed to reviewing land transfer tax legislation to improve tax fairness and prevent the avoidance of land transfer tax through legal structures that separate the legal and beneficial ownership of a property.

Following through on this commitment, Budget 2026-2027 introduces legislative amendments to the Tax Administration and Miscellaneous Taxes Act to address this issue. These amendments are expected to come into effect on January 1, 2027.

Administrative Tax Measures

Enhancement of the Film and Video Production Tax Credit

Manitoba Budget 2026 announces that enhancements will be made to the tax credit to:

Establish a mandatory pre-certification process
Reduce the potential for abuse and fraud
Allow for the inclusion of eligible non-resident labour costs on advanced certificates
Improve administration

Electronic filing of RST returns

To improve tax administration, all businesses registered to collect retail sales tax will be required, to file, remit and pay electronically effective January 1, 2028.

Denying Refunds when False Information is Provided

Manitoba Budget 2026 announces that RST refunds on the purchase and sale of vehicles will be denied if a taxpayer is found to have falsified a copy of their bill of sale to enable a purchaser to pay less tax when registering their vehicle.

For further information, visit https://www.gov.mb.ca/budget2026/index.html

[1] Federal corporate income tax rates on qualifying zero-emission technology manufacturing profits are temporarily reduced by 50%, lowering the general rate to 7.5% (from 15%) and the CCPC rate to 4.5% (from 9%), for taxation years from 2022 through 2031. These reduced rates will then be gradually phased out for taxation years beginning in 2032 through 2034.

[2] Applies to the first $500,000 of active taxable income of Canadian-Controlled Private Corporations (CCPCs).

Contact our Team of Experts

This article was prepared by the individuals listed below. For further information on the above, we invite you to please reach out to Danny Guérin of Andersen Inc.