Province axes tax for small businesses
The provincial government announced Wednesday that Manitoba has become the first province to remove the provincial small business tax.
Businesses in Manitoba will save a total of more than $422 million annually when the tax measures are combined with tax cuts previously announced by the government, said provincial officials.
Finance Minister Rosann Wowchuk credited small businesses for their contributions to Manitoba.
"Small businesses invest in our economy, grow our communities, support our families and help keep Manitoba's unemployment rate one of the lowest in the country," said Wowchuk.
When the NDP took office in 1999, the small business tax was the second highest in Manitoba at eight per cent, said provincial officials. That number has dropped over the past decade, sitting more recently at one per cent before the phase-out was announced Wednesday.
The Canadian Federal of Independent Business voiced support for the elimination of the provincial small business tax Wednesday.
"This is a day to celebrate but it doesn't end here. I think the next thing for small businesses is really on the personal income tax side -- that's really an area where Manitoba is losing some competitiveness," said Janine Carmichael, Manitoba director for the Canadian Federation of Independent Business.
In Ontario, a Manitoban earning $40,000 approximately a year is paying double the income tax as neighbours in Ontario.
The province, however, said it does not have current plans to change that.
"When you try to compare one province to another you have to look at all the things in the province you have to look at cost of living," said Wowchuk.
The Canadian Taxpayers Association wonders where the government will try to recoup the $9.5 million shortfall it will face by axing the small business tax.
The government said it has not yet determined how it will make up for the shortfall.
Business owner Derrick Godfrey, who operates a cupcake shop in Osborne Village, said the elimination of the tax will mean about an extra $10,000 a year for his shop.
"Ten grand means it'll allow us to hire another part-time baker," said Godfrey.
It's likely most businesses will use the extra cash from the tax cut to purchase new equipment, hire more staff or off-set the increase in the minimum wage.
- with a report from CTV's Laura Lowe