MBiz

9 SUMMER 2023 A review of Manitoba's taxation framework was an initiative that the Manitoba Chambers of Commerce, and Manitoba's business community, had long been asking for — and one that has had the full support of the Cham- ber Network for years. It is precisely for this reason that the Manitoba Chambers of Commerce has had a long-standing policy asking the provincial government to undertake a review of both personal and corporate taxes, with a focus on tackling econom- ic competitiveness through taxation. When we look at the nationwide economic competition landscape, Manitoba has not kept pace with other provinces for close to 20 years. This is especially so when we consider the way in which we are taxed in Manitoba. Let's consider a young Manitoban who has recently graduated from a post-secondary institution with a degree, diploma or certificate fresh in hand. When considering their future, they will look at where they can get a job, where they can keep more of the money they earn, and where their qual- ity of life will be best. Manitoba youth are doing their research. When they do this research, they will learn that Manitoba has been at the bottom of the pack on the Basic Per- sonal Amount (the income we can earn before it is taxed). Perhaps even more problematic from a competitiveness perspective is that our tax brackets have long been out of sync with our provincial neighbours. Businesses make decisions in the same way that people do. Businesses are not restricted by borders, and they will go wherever they can be most suc- cessful. A friendlier tax framework is ab- solutely a part of their decision-making. As the demand for skilled workers grows, Manitoba must take a genera- tional look at how we can compete with other provinces. Alberta, Saskatch- ewan and Ontario have capitalized on areas where they can make the biggest impact on attracting workers, and it has left Manitoba playing catchup. This is why Budget 2023 was so important for Manitoba's economy. By taking bold swings, the provincial government confirmed a focus on tax competitiveness. The personal taxation measures an- nounced in this year's budget included an increase to the Provincial Basic Personal Amount, from $10,145 in 2022 to $15,000 in 2023, bringing us in line with the rest of the country. They also took bold swings on personal income taxes, announcing increases to both the lowest and high- est tax brackets beginning in 2024. The lowest tax bracket will now apply to the first $47,000 of income earned (up from $34,431 in 2022). The highest tax bracket will now apply only on income earned over $100,000 (up from $74,417 in 2022). Combined, these personal income tax measures will allow Manitobans to keep more of the money they earn. Most importantly, these measures will help to move the dial on improv- ing Manitoba's economic competitive position in the country. This is good for Manitobans and it's good for business. Budget 2023 also increased the pay- roll tax exemption threshold to $2.25 million, eliminating payroll taxes for 150 employers and hinting that elimi- nating the payroll tax might be next. Considered a disincentive to growth, reducing and eventually eliminating the payroll tax has consistently been a pri- ority for business in Manitoba and for the Manitoba Chambers of Commerce. In 2023, with a highly mobile work- force and labour shortages across the country, a competitive economic landscape is intrinsically linked to our ability to compete for talent. We need to keep moving the dial on these critically important issues and we have to continue taking away reasons for people to leave Manitoba. ■ This year, only 50% of business leaders in Manitoba believe that Manitoba's business climate is competitive with other provinces (down from 61 per cent in 2021).

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