Man. budget extends, expands farmers’ tax credits

Tax credits for investments in processing equipment and farm odour control are to be extended past their expiry dates in Manitoba’s latest provincial budget.

Tuesday’s budget, seen by several observers as a pre-election document ahead of the next provincial vote on Oct. 4, also sees a sales tax exemption expanded to include sales of heat-generating biomass, and a new tax credit to help defray the cost of kids’ 4-H fees.

In releasing the budget, Finance Minister Rosann Wowchuk, a former provincial ag minister, announced the province’s Odour Control Tax Credit will be held over to Dec. 31, 2014 from its previously scheduled end date of Dec. 31 this year.

Set up in 2004, the 10 per cent non-refundable corporate income tax credit goes to businesses that invest in capital property “for the purpose of preventing, eliminating or significantly reducing nuisance odours arising from the use or production of organic waste.”

The tax credit, which was expanded to farms and individual farmers in 2006, is good up to a maximum of the total of Manitoba income tax payable and the amount of property taxes paid on Manitoba farmland by the farmer, in the year in which eligible capital property was acquired.

The province said it expects the total impact of that extended credit to be about $100,000 in 2011-12.

Wowchuk’s budget also extends the province’s Manufacturing Investment Tax Credit past its Dec. 31, 2011 expiry to a new deadline of Dec. 31, 2014.

The tax credit, which will cost the province $8.4 million in 2011-12, gives companies a 10 per cent corporation income tax credit based on the capital cost of new and used manufacturing buildings, machinery and equipment acquired for use in manufacturing or processing in Manitoba.

The budget also offers a new break on provincial sales tax, expanding an exemption already available on straw pellets used for heating or cooking, to include biomass bought for the same purposes.

The expanded exemption, which kicks in May 1, is also expected to cost the province $100,000 in this fiscal year.

“Organized and supervised”

Wowchuk on Tuesday also announced a new Children’s Arts and Cultural Activity Tax Credit, a 10.8 per cent non-refundable income tax credit to recognize “organized and supervised arts and cultural activities taking place in Manitoba and outside a school’s regular program.”

The tax credit, costing the province $3.8 million in 2011-12, can be claimed on up to $500 of eligible costs, for up to $54 in income tax savings per child.

Apart from the costs of music, art or dance lessons, the tax credit can also be claimed on membership fees in children’s organizations. The budget specifically mentions 4-H along with Scouts, Guides and Cadets as examples.

A gradual increase in Manitoba’s farmland school tax rebate also continues in this year’s budget. The rebate, which offsets school taxes paid on farmland, increases in 2011 to 80 per cent, up from 75 in 2010. The rebate was introduced in 2004 at 33 per cent.

The boost in the school tax rebate was singled out for praise Tuesday by the Canadian Federation for Independent Business (CFIB) in its review of the budget.

“Given the uncertainties facing Manitoba farmers this spring, the increase… will provide some much-needed relief at the farm gate,” Marilyn Braun-Pollon, the CFIB’s vice-president for agribusiness, said in a separate release.

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