A new 7% retail sales tax on home, business and auto insurance is an unfair burden on Manitoba consumers, according to Insurance Bureau of Canada (IBC).
The tax, introduced in the Manitoba provincial budget Apr. 17, will be added to “embedded” premium taxes and fire tax of 4.25%, creating an effective tax rate of 11.5% on insurance premiums, IBC says. It estimates the additional tax will cost provincial residents an extra $48 million.
“IBC is very disappointed by this tax decision, which will make insurance — an essential product — less affordable for consumers like homeowners, tenants and business owners,” says Lindsay Olson, vice president for Manitoba, IBC.
The sales tax will come into effect July 1, 2012, but it will not apply to Manitoba Public Insurance’s Autopac policies.