Manitoba’s Budget 2021 includes new tax on streaming sites, cuts to property tax

WINNIPEG — Manitoba’s budget for 2021 highlights cuts to the Education Property Tax, a refund for teachers paying for supplies out of pocket, and new sales tax on streaming sites like Netflix and Spotify.

The province tabled its provincial 2021 budget on Wednesday at the Manitoba Legislature.

The province is expecting a deficit of $1.597 billion for 2021-22. While the deficit is down from the forecast for 2021, the province said it has been exacerbated by the COVID-19 pandemic.

The province said it plans to eliminate the deficit over eight years.

EDUCATION PROPERTY TAX CUT, ADDITION OF TEACHER EXPENSE REFUND

This year’s budget allocates $3 billion to education – the province said this is the highest education budget in Manitoba’s history.

The province promises about $248 million in Education Property Tax Rebates will be provided to about 658,000 properties in 2021.

Residential and farm properties will see a 25 per cent rebate of the school division special levy and the community revitalization levy payable in 2021, as well as another 25 per cent rebate in 2022.

Owners of other properties – including commercial, industrial, railway, institutional, pipelines and designated recreational properties – will get a 10 per cent rebate in 2021.

The province did not say how long it will take to totally cut the Education Property Tax.

The phasing out of the education property tax will see a decrease of $192 million in 2021/22.

To offset the education property tax reduction’s impact on school divisions, the province said it would be putting $1.6 billion over four years for education funding.

Along with this, the province is introducing a maximum of $150 school supply refund for childcare educators and K-12 teachers who purchased the supplies out of pocket.

The province said this new ‘Teaching Expense Tax Credit’ will allow these teachers and educators to claim a 15 per cent refund for up to $1,000 spent on school supplies not covered by the employer.

The province said $4 million will also be used for a virtual learning strategy and program for Manitoba students’ online remote learning, regardless of technology options.

Tuition fees are forecasted to be $18 million below the budget. The province said this is mainly because of a drop in international student enrollment due to COVID-19.

It said university tuition rate increases will be capped at 3.75 per cent and $250 per college program this academic year.

PST ON STREAMING, ONLINE SELLERS, ONLINE HOTEL BOOKINGS

While the province is moving forward with its promise to remove the sales tax (currently set at seven per cent in Manitoba) on personal services including hair services and salons, and tattoos – it is adding the tax to some other online services.

Among the tax changes coming to Manitobans in 2021 is the introduction of a provincial retail sales tax for streaming services, online marketplaces and online accommodation platforms as of Dec. 1, 2021.

The province said the retail sales tax will apply to audio and video streaming services including Netflix and Spotify. PST is currently collected on streaming services provided by CraveTV in Manitoba. The provincial budget said it expects to collect $14 million from this tax annually.

Online marketplaces – which include businesses that sell goods from third parties online – will also see the introduction of the PST, which is expected to bring in $10 million annually.

The province said some sellers, such as Amazon and Best Buy Canada, may already be collecting the sales tax on the sale of their own goods but are currently not required to collect sales tax on the sale of goods by third parties.

The province said this tax will not be included on second-hand sale sites such as Kijiji and Facebook Marketplace.

The province said the PST will also be introduced for online platforms used to book hotel and Airbnb stays in Manitoba. It is expected to bring in $2.5 million annually.

These sales tax additions come as the provincial 2021 budget reduces vehicle registration fees by another 10 per cent, in addition to a 10 per cent reduction made last year.

RENT FREEZE OVER TWO YEARS FOR PANDEMIC RECOVERY

As it announced early this week, the province said it would be putting $1.2 billion in COVID-19 costs and contingency funds.

READ MORE: Manitoba budgeting almost $1.2B for COVID-19 pandemic response

To help renters get through the pandemic, the province said it plans to freeze the annual rent control guidelines through 2022 and 2023.

The budget includes a further lowering of the payroll taxes for some small businesses. The Finance Minister said this is the second year Manitoba is doing this.

MANITOBA LOOKS TO PUT MONEY TO PRESERVE DOWNTOWN BAY BUILDING

The province’s 2021 budget includes the creation of a $25 million trust to redevelop the Downtown Winnipeg Hudson’s Bay building.

The iconic building was shuttered in November 2020.

The province said this trust will be used to help preserve some of the building’s historical elements and will be used pending development.

The province said it would like to see other levels of government to join in on the investment.

“We look forward to partnering with the Hudson’s Bay Company to support the preservation of the historical features of the Bay building in downtown Winnipeg,” a spokesperson for the province said in a statement to CTV News.

More details are expected to be released about this in the coming days.

MORE FROM THE 2021 BUDGET

Here are some of the other items included in Manitoba’s 2021 budget:

  • $2.9 million to address the backlog in the court system caused by COVID-19;
  • The creation of a new Manitoba Criminal Intelligence Centre;
  • The creation of a new program to cover glucose monitoring devices costs for eligible children and youth under the age of 25, and increasing the age limit the insulin pump program from 18 to 25;
  • $292 million for health-care facilities infrastructure which will allow the construction on the new St. Boniface Emergency Department to begin; and
  • $9.3 million to add 120 beds to personal care homes in Steinbach and Carman. 

You can read Manitoba’s full 2021 Budget here: 

This is a developing story. More to come.  

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