Jeers, cheers after province buries ‘death taxes,’ Tories make good on promises to eliminate probate fees, reduce payroll tax burden; critics decry revenue loss By: Carol Sanders Posted: 7:00 PM CST Tuesday, Dec. 29, 2020

The province's elimination of "death taxes" this year is being both praised and panned by politicians and lawyers.

Read this article for free:

or

Already have an account? Log in here »

To continue reading, please subscribe:

*No charge for 4 weeks then billed as $19 every four weeks (new subscribers and qualified returning subscribers only). Cancel anytime.

Hey there, time traveller!
This article was published 28/12/2020 (1361 days ago), so information in it may no longer be current.

The province’s elimination of “death taxes” this year is being both praised and panned by politicians and lawyers.

On Nov. 6, the budget implementation bill that contained several changes to legislation — including the elimination of probate fees — was proclaimed by the legislature.

The revenue generated from law fees and probate charges was more than $9 million a year, according to information provided by the province.

“We are giving Manitobans a break by putting money back on the kitchen table for families, seniors and households.” – Finance Minister Scott Fielding

In the 2017-18 fiscal year, the so-called death taxes generated $9,221,000 in revenue; in 2018-19 it was $9,198,000 and, for 2019-20, they raised $10,518,000 in revenue.

“We’re keeping our promises to reduce the payroll tax and eliminate death taxes so Manitoban businesses and families can keep more of their hard-earned money,” Finance Minister Scott Fielding said in a press release when Bill 2, the Budget Implementation and Tax Statutes Amendment Act, was introduced in October.

The legislation allowed the government to implement the tax cuts announced in Budget 2020 “and bring relief to Manitoba households and businesses,” Fielding said in the release. It raised the thresholds of the Health and Post-Secondary Education Tax Levy, benefiting nearly 1,000 medium-size businesses and exempting 220 employers from the payroll tax.

“We are giving Manitobans a break by putting money back on the kitchen table for families, seniors and households,” said Fielding.

“Our government is committed to making life affordable for Manitobans through lower taxes and other cost-saving measures, which is even more important as we face the financial strain caused by COVID-19.”

The multitude of measures in the 167-page bill included: a 2.9 per cent Manitoba Hydro rate increase on Dec. 1 and taking away the right of children in care to sue the province for clawing back their federal children’s special allowance benefits. The Law Fees and Probate Charge Act eliminated probate fees on approximately 3,500 estates each year.

Probate fees were calculated at a rate of $70 for the first $10,000 of asset value listed in the probate inventory plus 0.7 per cent of the balance of that value. In other words, 0.7 per cent of the total assets held by the deceased and subject to probate fees at the date of death.

Critics questioned the province’s wisdom and timing in giving up a steady source of revenue during the COVID-19 economic and health crisis.

“In the middle of a pandemic, the Pallister government is giving a break to the wealthy few instead of investing in the things regular families really need.” – NDP finance critic Mark Wasyliw

“In the middle of a pandemic, the Pallister government is giving a break to the wealthy few instead of investing in the things regular families really need — stronger health care, smaller class sizes, small business supports and quality (personal protective equipment),” NDP finance critic Mark Wasyliw said.

“Instead of helping Manitobans make ends meet, this government is making life more expensive by raising Hydro bills and putting the interests of their friends and wealthy insiders ahead of regular families.”

One wills and estates lawyer, who asked not to be identified, said Manitoba is facing its deepest deficit to date and could use the revenue from probate fees.

“We are going through a very, very fiscally challenging time right now with a $2-billion deficit,” he said. “After Nov. 6, millionaires’ estates don’t pay any fees when they die. Their families will save hundreds of thousands as a result.

“This unasked for and unwarranted tax break is being provided to the wealthy during a period when every tax dollar should be spent on those struggling because of the pandemic.”

Another lawyer said killing probate fees is being welcomed by clients.

“The elimination of probate fees was a significant change in Manitoba, welcomed by all clients dealing with a deceased person’s estate,” said Charlotte McCurdy, a practising estates lawyer in Winnipeg.

“While probate fees in Manitoba were less than in some other Canadian jurisdictions, they still represented a significant fee that had to be paid on someone’s passing, which reduced the value of the estate available for beneficiaries.”

“After Nov. 6, millionaires’ estates don’t pay any fees when they die. Their families will save hundreds of thousands as a result.” – Wills and estates lawyer

“The beneficiaries of this policy are mostly well off, and predominantly aged 50 to 75,” said Josh Brandon, community animator with the Social Planning Council of Winnipeg. Brandon cited a 2016 CIBC report titled “The Looming Bequest Boom – What We Should Expect.”

It found that among those who have received an inheritance, people making over $100,000 per year had bequests three times larger than those making less than $100,000.

“Eliminating probate fees will do nothing to reduce poverty in Manitoba,” Brandon said.

carol.sanders@freepress.mb.ca