Bill 46 implements measures from Manitoba’s 2025 Budget by amending multiple provincial tax statutes and related statutes. It removes Crown corporations from the Corporation Capital Tax, raises thresholds for the Health and Post‑Secondary Education levy, changes Income Tax Act credits and indexing rules, revises mining tax holiday rules, updates retail sales tax treatment of software and cloud services, and makes a set of administrative and municipal transfer adjustments.
For tax and compliance professionals, the bill changes who pays which provincial taxes, alters several credit and rebate calculations, creates new sourcing and proration rules for software purchases, and shifts procedural responsibilities (for example, how mine and oil rehabilitation monies are held). Several provisions take effect retroactively or on staggered future dates, so transitional compliance work and bookkeeping adjustments will be required.
At a Glance
What It Does
The Act amends nine tax- and finance-related statutes to implement budget measures: it exempts Crown corporations from corporation capital tax, increases exemption thresholds for a health/post-secondary levy, stops further indexation of tax brackets and the basic personal amount after specified years, expands the legal definition of "software" for retail sales tax, and simplifies eligibility for mining tax holidays.
Who It Affects
Crown corporations, financial institutions, employers and payroll administrators, taxpayers claiming provincial credits (homeowners, renters, seniors, volunteer firefighters), mining operators and mineral processors, software/cloud providers and purchasers, school boards and The City of Winnipeg are directly affected.
Why It Matters
The bill simultaneously narrows some taxes and freezes certain tax parameters—shifting long-term tax burdens—while creating new compliance rules (notably RST sourcing/proration for software and mining tax holiday mechanics). That mix changes revenue profiles and raises operational questions for tax, treasury and accounting teams.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
Bill 46 is a dense, multi-part statute that repackages the 2025 provincial budget into legal changes across corporate, personal and consumption taxes plus several administrative measures. It removes Crown corporations from the base of the Corporation Capital Tax, which means those entities no longer owe capital tax under that Act; related consequential amendments adjust references to "financial institution" and eliminate outdated definitions.
For the Health and Post‑Secondary Education Tax Levy, the statutory exemption and basic-rate thresholds are raised (the bill replaces several $2,250,000/$4,500,000 references with $2,500,000/$5,000,000), moving the levy’s practical bite upward for mid‑sized employers.
On personal income tax, the bill tightens eligibility rules and freezes some indexation. It narrows the definition of "individual" for particular refundable and non‑refundable credit provisions (excluding trusts in parts of the family‑benefit framework), increases certain volunteer credits (firefighter and search-and-rescue) from $3,000 to $6,000, and alters the indexing regime so that tax bracket and basic personal amount indexation apply only for specified past years—effectively halting future automatic increases.
The legislation also refines several credits and rebates (homeowners, renters and a revised seniors school tax rebate formula that permits a prorated benefit for part‑year eligibility) and adjusts numeric thresholds used in those calculations.The mining and mineral-processing regime is reworked to make tax holidays administratively simpler: eligibility for a tax holiday for a "new mine" or a "major expansion" no longer depends on a ministerial designation in the same way; instead, eligibility is tied to the mine or expansion meeting specified tests and the tax holiday runs from the day the mine or expansion begins mining until the dedicated tax‑holiday pool (calculated using a schedule formula) is exhausted. The bill also removes some legacy credits and special taxes tied to historic investments, and it repeals or amends provisions that previously governed certain deductions and the calculation of undepreciated balances.On consumption taxes, the Retail Sales Tax Act’s "software" definition is broadened to include cloud computing services, access to storage and computing capacity, APIs, and rights to receive updates; the bill also creates a "deemed delivery" rule that treats software as delivered in Manitoba if it is purchased in Manitoba, used on devices ordinarily situated in Manitoba, or the purchaser is ordinarily resident in Manitoba.
For businesses that use software across jurisdictions, the purchase price must be prorated to reflect the proportion of use in Manitoba. Finally, the Act contains non‑tax measures that matter to public finance: it authorizes the provincial minister to construct schools and transfer them (and associated construction costs) to school boards on purchase or transfer, validates certain previously charged vehicle inspection fees, deems certain land conveyed or dedicated to the City of Winnipeg to be conveyed for transfer tax purposes, and reclassifies certain mine and oil/gas rehabilitation monies so they are deposited into the Consolidated Fund but treated as trust money under provincial financial legislation.
The Five Things You Need to Know
The Act exempts Crown corporations from the Corporation Capital Tax and removes several related definitions and references; Part 1 is deemed effective April 1, 2025.
Health and Post‑Secondary Education levy thresholds are increased: exemption threshold to $2,500,000 and the basic-rate threshold to $5,000,000 (statutory references updated throughout Part 2).
The bill halts future automatic indexation: tax-bracket amounts are indexed only through the 2017–2023 taxation years and the basic personal amount is indexed only through the 2017–2022 taxation years, effectively stopping indexing afterward.
Mining tax holidays are made operationally simpler: a new mine or major expansion is eligible based on ministerial satisfaction of criteria rather than prior designation timing, and the holiday runs from first use for mining until the tax-holiday pool calculated under the Schedule is zero or negative.
Retail Sales Tax now treats cloud and subscription software as taxable software; software is deemed delivered in Manitoba if purchased in Manitoba, used on Manitoba‑located devices, or if the purchaser is ordinarily resident in Manitoba, and businesses must prorate purchase price for out‑of‑province use.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Remove Crown corporations and tighten definitions
Part 1 amends definitions and removes Crown corporations from the Act’s taxable base. The bill deletes the separate "Crown corporation" definition and changes the statutory language so "corporation" and "financial institution" references fit the new scope. Practically, Crown entities that previously appeared on corporation capital tax rolls will be out of scope; tax administrators and financial institutions must update registration, reporting and allocation processes for fiscal years beginning on or after April 1, 2025.
Freeze indexation, revise family and benefit rules, raise volunteer credits
This part makes multiple numeric and eligibility changes. It narrows the "individual" definition for certain credits (excluding trusts in specified provisions), replaces indexing clauses so bracket amounts and the basic personal amount are only indexed through past tax years, and increases volunteer firefighter and search-and-rescue volunteer credit caps from $3,000 to $6,000. The seniors’ school tax rebate is recast with a formula that prorates eligibility (A − .01B) × De/Dy, defining A, B and the prorating numerator and denominator — a mechanics change that tax preparers must implement to calculate partial‑year rebates.
Simplify tax-holiday eligibility and remove legacy credits/taxes
The Mining Tax Act is amended to redefine "new mine" and "major expansion" in terms of eligibility for a tax holiday and to remove pre‑2004 credits and a former special tax on processors. The tax holiday now begins when the mine or expansion is first used for mining and ends when the tax-holiday pool (calculated under the Schedule’s Formula 5) is zero or negative. The repeal of subsection 13(2) and related schedule formula changes affect how undepreciated balances and prior deductions are treated; mining operators and tax accountants must revisit historical deductions and the sequencing of capital allowances.
Broaden "software" and create sourcing/proration rules for cloud services
The RST definition of "software" is expanded to explicitly include remotely‑hosted software, APIs, computing/processing capacity, and electronic storage; the Act adds a deemed delivery rule that treats software as delivered in Manitoba based on purchase location, use on Manitoba‑located devices, or purchaser residence. For businesses using software across jurisdictions, the purchase price must be prorated to reflect Manitoba use. These changes shift tax collection and compliance burden toward vendors/ purchasers to determine geographic use and to apply prorated taxation.
Minister may build schools; transfers and tax exemptions for conveyed land
The Education Administration Act now authorizes the minister to select land and construct schools (including space for early learning/child care), then transfer or sell the completed school to a school board; the purchase/transfer makes construction costs a debt of the school board owing to the government. Related amendments to The City of Winnipeg Charter and the Tax Administration Act deem certain land conveyed to the city to be conveyed for transfer-tax purposes and exempt such transfers from land transfer tax. These provisions create new capital‑project workflows and fiscal responsibilities for school boards and the city.
This bill is one of many.
Codify tracks hundreds of bills on this topic across all five countries.
Explore this topic in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Crown corporations — They are removed from the Corporation Capital Tax base and will no longer pay that provincial capital tax, reducing provincial compliance filings and tax liabilities for Crown entities.
- Volunteer firefighters and search-and-rescue volunteers — The eligible non‑refundable credit maximum rises from $3,000 to $6,000, directly increasing tax relief for qualifying volunteers.
- Operators of new mines or major expansions — The streamlined tax-holiday mechanics (eligibility tied to use and pool exhaustion rather than narrow designation timing) reduces administrative uncertainty and can accelerate benefit capture for qualifying projects.
- Homeowners, renters and seniors receiving targeted supports — The Act increases the homeowners affordability tax credit and renters credit amounts and recalibrates the seniors school tax rebate to permit prorated benefits, increasing potential refunds or reductions for eligible households.
- The City of Winnipeg and municipalities — Land conveyed to the city as part of subdivision approval is deemed conveyed (and exempt from land transfer tax), simplifying municipal land acceptance and reducing transfer costs.
Who Bears the Cost
- Provincial treasury / taxpayers generally — The combined effect of exemptions, higher credits and broader software sourcing will reduce provincial revenue relative to a no‑change baseline, increasing pressure on fiscal targets or shifting the composition of taxation.
- School boards — When the minister constructs a school and transfers it, the school board becomes responsible for costs determined by the minister; boards must budget for assumed debt and related operating/maintenance obligations after transfer.
- Businesses that buy or deliver software/cloud services — Vendors and purchasers must determine place-of‑supply, prorate purchase prices and adjust systems for RST collection and remittance, increasing compliance costs and audit exposure.
- Tax administration and finance staff — Manitoba Finance must implement new trust‑account classifications for mine/oil rehabilitation monies, validate past vehicle inspection fees, and administer revised provisions across multiple Acts, creating short‑term administrative workload.
- Accountants and tax advisers — The freeze of indexation, revisions to credit eligibility, and mining tax accounting changes require retesting of tax projections, client communications, and potentially tax‑planning restructures.
Key Issues
The Core Tension
The central dilemma is balancing short‑term stimulus and targeted relief against longer‑term revenue and administrative complexity: the government eases or exempts specific taxpayers (Crown corporations, volunteers, new mine projects, renters/homeowners) and broadens consumption tax catches (software), while simultaneously freezing indexation so revenue rises in real terms over time—this solves some fiscal priorities today but increases distributional, compliance and governance tensions that will play out over the medium term.
The Act stitches together revenue‑reducing measures (exemptions, higher credits) with revenue‑raising or preserving mechanics (indexation freezes, sourcing rules) in ways that create implementation complexity. Stopping indexation of tax brackets and the basic personal amount does not require an immediate rate change, but it steadily increases real tax burdens over time; administrators must update withholding tables and communicate the long‑run effect to payroll and benefits teams.
The deemed delivery and proration rules for software create measurement and allocation challenges — taxability depends on where devices are "ordinarily situated" and how businesses track use across jurisdictions, which raises compliance and audit risk for both vendors and purchasers.
Several provisions have retroactive or staggered effective dates (some deemed in force for prior taxation years or fiscal years beginning in 2025) that create record‑keeping and transition work for taxpayers and administrators. The mining changes simplify policy intent (encouraging investment) but swap ministerial designation for a facts‑based eligibility test and a formula‑driven end point; that shifts the compliance focus to precise capital accounting and interpretation of the Schedule’s formula, and it may reopen disputes about the timing and calculation of the tax‑holiday pool.
Finally, transferring construction costs to school boards after ministerial construction centralizes delivery but transfers fiscal risk; the bill does not prescribe oversight or limits on the debt amounts the minister may assign, creating governance and affordability questions for school boards.
There's more to this law than the bill.
Codify Laws traces every connection across the legislative lifecycle.