TAXATION
In December 2005, The Winnipeg Chamber of Commerce established a Task Force to examine the issue of taxation levels in the Province of Manitoba.
In today’s globally competitive business environment, The Winnipeg Chamber of Commerce believes it is imperative that government create a climate that attracts new business and allows existing businesses to prosper.
Business leaders have clearly told us that they don’t believe Manitoba’s business climate is competitive with other provinces.
The Winnipeg Chamber of Commerce believes that any tax policy must support the following three principles:
- Growth – The tax system should contribute to economic growth
- Transparency – The tax system should be structured so that it can be clearly understood by the taxpayers and administered by authorities in an impartial and predictable manner.
- Accountability – The government must be publicly accountable to taxpayers by money raised and expended by it.
As part of our policy process The Chamber examined the taxation measures that provide revenues for both the municipal and provincial governments and measured them against the above principles.
Winnipeg Chamber of Commerce Recommendations:
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Implement long-term provincial and civic tax strategies to provide the business community with confidence and certainty that tax reducation is a priority.
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Set a target of having Manitoba’s tax levels in the top three most competitive when compared with other provinces.
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Look at the provincial tax threshold levels on an annual basis to ensure they are competitive with other jurisdictions.
PROVINCIAL TAXES
Personal Income Tax
Index brackets to be consistent with other provinces – middle income
Income threshold should be increased to match Saskatchewan (65,000
In Manitoba – 100,000 in Saskatchewan)
Raise lowest personal income tax bracket to $35,000
Provincial Sales Tax
Apply the PST in the manner intended, which was to tax tangible
Personal property
Corporate Income Tax
Index tax thresholds to inflation on an annual basis
Implement a provincial tax rate of zero per cent for the first $200,000,
which would provide working capital for small businesses
Create a tax rate that is in the top three most competitive when
Compared with other provinces on a current basis (Manitoba is
Currently 7th)
Capital Tax
Eliminate this tax over a five-year time frame
Payroll Tax
Eliminate this tax over a five-year time frame
Consumption Taxes
Harmonize the PST and GST
Dedicate road-use fuel taxes in their entirety to highway and road
construction
Land Transfer Tax
Replace with a fee equal to the cost of the service
Property Taxes
Commit to the elimination of the education portion of both the
Residential and commercial property tax over five years
TAX INCENTIVES
The Chamber is concerned that incentives are only created when a poor
tax structure exists. The Chamber believes that with a strong economy,
fair labour laws and a competitive tax structure, there is no need for tax
incentives.
The task force does, however, make the following recommendations:
R & D tax credits – Make R & D tax credits refundable and lower the rate
in recognition of such change
Manufacturing credit – Replace the manufacturing tax credit with an
exemption from the PST on capital equipment
Dividend tax credit – Structure the dividend tax credit to ensure that
equivalent amounts of tax are ultimately collected on business income
whether earned directly by individuals or indirectly through
corporations
MUNICIPAL TAXES
The task force acknowledges the City of Winnipeg is challenged by
having no growth taxes that provide an increase in revenues. There
needs to be a shift in the way taxes are collected.
The City should look at other options to generate revenue: user fees and
a tax shift from other levels of government.
In terms of the taxes the City of Winnipeg collects, The Chamber makes
the following recommendations:
Property Taxes
Reduce property taxes for residential and commercial properties
Business Taxes
Implement a cap on revenues generated by the business tax
Institute a series of threshold exemptions bases on assessed rental
property values, increasing annually over seven years, leading to the
total elimination of the business tax
Entertainment Tax
Move towards the elimination of this tax, which is the only one of its
kind levied across Canada
Adopted by The Winnipeg Chamber of Commerce board of directors, June 2006