Business takeaways from 2021-22 budget
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Hey there, time traveller!
This article was published 07/04/2021 (786 days ago), so information in it may no longer be current.
It’s a provincial budget that comes in the wake of hundreds of struggling storefronts and companies across Manitoba.
So, how exactly is the government planning to help business owners amidst the massive economic stupor caused by COVID-19 pandemic?
Here’s a quick rundown of four business takeaways from the 2021-22 budget:
Cutting red tape, taxes
Manitobans will no longer have to pay the retail sales tax on personal services, as of December, which the province believes is a saving of nearly $8 million annually for customers, and trims red tape for business owners.
Those services include manicures, pedicures, tattoos and haircuts over $50 (visits to the barbershop under that price point were already exempt from retail sales tax).
“It’s been stated that I don’t like higher taxes, and I think that’s probably generally true,” Premier Brian Pallister told reporters at a Wednesday news conference, after the budget was tabled and presented to the legislative assembly.
“But what I don’t like is unfair taxes; I don’t like taxes that place an unnecessary burden on people for essential things.”
The new measure will be helpful for Sam Rivait and Cait Bousfield’s new barbershop, Good Fortune, on Osborne Street in Winnipeg.
“It’s been such a tough year for both us as business owners and those who are customers, as well,” said Bousfield. “A little bit of savings go a long way and, certainly this way, we’re easily helped with focusing ourselves to get on our feet as a barbershop rather than worrying about things like paperwork and whatnot with taxes.”
The province is also lowering payroll taxes for small businesses — which it says will help approximately 1,100 firms and exempt 240.
Additionally, the exemption threshold is being raised to $1.75 million of annual payroll (from $1.5 million). The threshold below which employers pay a reduced rate is being raised to $3.5 million (from $3 million).
The province says around $62 million towards COVID-19 recovery funding for businesses are underway for specific sectors, through the Manitoba Chambers of Commerce and Economic Development Winnipeg.
Asked for clarity, a provincial spokesperson said around $6.5 million out of that $62 million has already been used up. The remainder will go toward programs designed by stakeholders instead of the government handing emergency directly to businesses.
Finance Minister Scott Fielding said funds are primarily for pandemic recovery, job creation and workforce training.
“I think stakeholders like the chamber are great voices to know exactly what the business community wants,” said Jonathan Alward, Manitoba director for the Canadian Federation of Independent Business.
“For me, that’s why I think they’ll best be able to gather feedback, as they already have been, and be able to identify exactly the areas where the community needs help.”
Alward suggested some funding should go towards and extension of “successful” programs for small businesses, such as the Manitoba Bridge Grant or the Dine-in Relief Fund.
A provincial spokesperson said, while there are no specific new programs being announced, the budget has set aside amounts for possible future programs coming from within the $1.2 billion dedicated towards COVID-19 measures.
New economic development agency
The province announced the creation of a new, private-sector-led provincial economic development agency, based on recommendations of the premier’s economic opportunities advisory board.
Details about who will direct this agency and how it will function are not yet available.
“This agency will lead Manitoba’s activities to attract new private-sector investment, increase international trade, and act as a single window for businesses and investors pursuing major economic development projects across the province,” the finance minister told reporters.
Enhanced small-business venture credit
Manitoba is joining the ranks of provinces such as British Columbia to increase eligible investment under the Small Business Venture Capital Tax Credit.
An investor’s maximum eligible investment will now be increased to $500,000, and the maximum tax credit claimable annually against Manitoba income tax will be almost doubled to $120,000.
“This allows us to help Manitoba companies raise business growth equity,” said Fielding, adding this provides a non-refundable Manitoba tax credit of up to 45 per cent to individuals and corporations who acquire equity capital in eligible local enterprises.
The program targets Manitoba companies that want to raise equity from higher-net worth individuals, with a minimum investment of $10,000 per investor. Corporations must be pre-approved to issue shares.