2008 Manitoba Budget Impact Paper

This paper was prepared by the Compensation Sector, Accounting, Banking and Compensation Branch, Public Works and Government Services Canada (PWGSC). It should be noted that this document is not all encompassing. Employees may find this document informative from a personal perspective.

The following items, which are relative to the compensation product, were introduced in the Manitoba budget speech that was presented by the Honourable Greg Selinger, Minister of Finance for the Government of Manitoba on April 9, 2008.

ITEMS AFFECTING PWGSC COMPENSATION SYSTEMS

Personal Income Tax Rate

Starting January 1, 2009, the lowest tax rate will be reduced from 10.9% to 10.8%; the middle tax bracket threshold will be increased from $30,544 to $31,000; and the top tax bracket threshold will be increased from $66,000 to $67,000.

Impact:PWGSC compensation systems will be programmed to reflect these changes effective January 2009.

Basic Personal Amount

The basic personal amount will be increased by $100 to $8,134 effective January 1, 2009.

Impact: PWGSC compensation systems will be programmed to reflect this change effective January 2009.

Spousal and Eligible Dependent Amount

The spousal amount will be increased by $100 to $8,134 effective January 1, 2009.

Impact: PWGSC compensation systems will be programmed to reflect these changes effective January 2009.

Eligible Dependent Amount

The eligible dependent amount will be increased by $100 to $8,134 effective January 1, 2009.

Impact: Information concerning this change will be communicated to employees paid through the Regional Pay System and the Royal Canadian Mounted Police Pay System. This information will be communicated in an Information Notice to Employees in December 2008, and posted on the Compensation Sector Web site. In order to take advantage of the increase, employees will be required to complete a new Manitoba TD1 form. As the PWGSC Annuitant System records each tax credit shown on the TD1MB form separately, this system will be programmed to automatically increase these tax credits effective January 1, 2009.

ITEMS OF INTEREST

Primary Caregiver Tax Credit

The budget introduced a new Primary Caregiver Tax Credit effective for the 2009 tax year. This credit will provide recognition and financial support to individuals who serve as volunteer primary caregivers for more than three continuous months. The credit will be worth up to $85 per month to a maximum of $1,020 per year.

Impact: This change will be incorporated into the 2009 income tax return.

OTHER

Manitoba's tax legislation and regulations will be amended to incorporate some of the measures announced in the February 26, 2008 Federal budget including the implementation of a new savings vehicle, a tax-free savings account (TFSA) effective for the 2009 taxation year and an increase in the maximum Northern Residents Deduction effective for the 2008 taxation year.

To review the 2008 Manitoba budget documents, please visit this site:

http://www.gov.mb.ca/finance/budget08/b_in_b/index.html