Ryan Tax Alert - Manitoba Budget 2008

On April 9, 2008, Minister of Finance Greg Selinger presented the 2008 Manitoba Budget. “The Opportunity and Stability Budget” focuses primarily on investing in the health care system; protection of the water and environment; providing tax relief for families, graduating students and businesses; increasing funding to make communities safe; and a commitment to invest in the province’s infrastructure. This year’s budget claims to continue Manitoba’s tradition of providing long-term tax relief. However, only a few significant commodity tax changes were announced.

Retail Sales Tax

Exemption for Non-Returnable Shipping Supplies

The budget includes a proposal, that effective May 1, 2008, the tax exemption available to purchasers of non-returnable shipping supplies transferred to purchasers upon delivery of the goods, will be extended to include non-returnable shipping supplies used to stabilize goods during shipping. Currently, this exemption applies to non-returnable shipping supplies such as containers, pallets, wrapping material and other packaging materials (e.g., labels, price tags, shipping tags and name plates).

Exemption for Direct Agents

Effective May 1, 2008, the budget proposes that Retail Sales Tax will no longer apply to welding tips and nozzles or rolls used in the pulp and paper industry. In addition, services to direct agents that are consumed in the manufacturing process will be exempted. Direct agents are items that are used to the point of destruction during a manufacturing process. Currently, the exemption applies only to the direct agents themselves and includes dies, jigs, molds, patterns and similar items.

Exemption for Smoking Cessation Products

Manitoba currently has a Retail Sales Tax exemption for prescription smoking cessation products. Included in this budget is a proposal to broaden this exemption, effective May 1, 2008, to include non-prescription products.

Environmental Initiatives

Green Measures

This year’s budget includes a new “Emissions Tax on Coal”. Effective July 1, 2011, this new tax will apply to coal at a rate of $10 per tonne of carbon-dioxide-equivalent emissions. The province has a plan to raise this tax to a rate of $30 per tonne based on a schedule that will be released in a future budget.

The budget also includes an announcement that the province will contribute up to 25% of private sector capital costs of investments to convert from coal, and will work with coal users to find appropriate substitutes for this fuel.

Technical and Administrative Measures

Tobacco Tax Amendments

The budget proposes to amend The Tobacco Tax Act to require tobacco manufacturers to have a permit for all equipment used in Manitoba in the manufacture of tobacco products. In addition, amendments will be made to update the tobacco marking provisions.

Additional information on the Manitoba Budget may be found on the province’s web site at:
Budget 2008 | Manitoba Finance | Province of Manitoba.

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