Tax Highlights from the 2026 Manitoba Budget

Minister of Finance Adrien Sala tabled the 2026 Manitoba provincial budget on March 24, 2026.

The budget projects a deficit of $498 million for 2026/27 and anticipates continuing improvement in the operating deficit over the medium term, with small surpluses forecasted for 2027/28 and 2028/29. The forecasted deficit for the nearly completed 2025/26 fiscal year now stands at $1.666 billion, compared to the initial projection of a $794 million deficit.

On the income tax front, there are no changes to personal or corporate income tax rates for 2026. However, the budget increases both the Renters Affordability Tax Credit and the Homeowners Affordability Tax Credit, introduces new measures intended to reduce the cost of food and prenatal vitamins through the removal of provincial retail sales tax (RST), and introduces measures intended to prevent avoidance of the land transfer tax.

The following pages summarize the changes announced in the budget. Please note that these changes remain proposals until passed into law by the provincial government.

PERSONAL TAX MATTERS

Personal Income Tax Rates and Tax Brackets

There are no proposed changes to personal income tax rates for 2026. However, indexation of tax brackets and other amounts has been paused for the 2026 tax year. The table below outlines Manitoba’s tax rates and tax brackets for 2026.

The table below outlines the 2026 combined federal and provincial highest marginal tax rates for various types of income.

Renters Affordability Tax Credit

For the 2027 tax year, the Renters Affordability Tax Credit will increase to $675, while the seniors’ top-up will rise to a maximum of $385.71 for individuals with a family net income below $40,000. Both amounts will continue to increase annually over the current mandate, as part of the Manitoba government’s commitment to restore the credit to $700 and the seniors’ top-up to $400.

The government will also pursue options to enable renters to receive their benefit faster than through their tax return.

Homeowners Affordability Tax Credit

For the 2027 property tax year, Manitoba will increase the Homeowners Affordability Tax Credit by $100, from $1,600 to $1,700. Homeowners with gross school tax bills exceeding $1,500 will benefit from this increase, with up to an additional $100 of their school taxes covered in 2026 and up to an additional $200 covered in 2027, compared to 2025.

To ensure the tax credit benefits those who need it most, beginning in 2027, homeowners whose principal residence has an assessed value of more than $1 million will receive a reduced credit. The credit will be reduced by $3.40 per $1,000 in assessed value above $1 million. Homes valued at $1.5 million or more will no longer be eligible for the credit.

CORPORATE TAX MATTERS

Corporate Income Tax Rates

There are no proposed changes to corporate income tax rates. The table below outlines Manitoba’s tax rates and the small business limit for 2026.

The table below outlines the 2026 combined federal and provincial corporate income tax rates for various types of income earned by a Canadian Controlled Private Corporation (CCPC).

Film and video production tax credit

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 advance certificates, and improve administration.

OTHER INITIATIVES

Removing Retail Sales Tax (RST) on Additional Grocery Store Foods and Pre-Natal Vitamins

Basic groceries (such as meat, vegetables, fruit, and dairy) are non-taxable; however, RST applies to other food items.

Effective July 1, 2026, RST will be removed on additional food and beverages sold by grocery stores. Examples of common food items that will no longer be subject to RST include:

• 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 1% or less alcohol per volume

This expanded RST exemption on grocery store foods is expected to save Manitoba families up to $100 per year. RST will continue to apply to beverages with an alcohol content greater than 1%, dietary supplements, and taxable non-food items sold in grocery stores.

To support maternal health and healthy fetal development, effective July 1, 2026, RST will also be removed from prenatal vitamins. Other vitamins and minerals remain taxable.

Preventing avoidance of land transfer tax

In Budget 2025, 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 legal and beneficial ownership of the property. In 2026, the government will be introducing legislative amendments to The Tax Administration and Miscellaneous Taxes Act to address this issue, with changes planned to come into effect on January 1, 2027

Electronic filing of RST returns

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

Denying RST refunds for falsified bills of sale

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

NEXT STEPS

For tailored tax and legal advice on how these measures affect you or your business, your own tax lawyers and accountants are best positioned to advise on these proposals. Your financial advisor can also assess the impact of these proposals on your personal finances or business affairs and show you ways to take advantage of their benefits or ease their impact, align your investments accordingly, and help coordinate the right specialist for your circumstances.